A top executive in the now-defunct empire of disgraced Texas financier R. Allen Stanford was sentenced to three years in prison Thursday for her role in helping the once jet-setting businessman bilk investors out of more than $7 billion in one of the biggest Ponzi schemes in U.S. history.
Former Stanford chief investment officer Laura Pendergest-Holt's sentence was part of a plea agreement reached with federal prosecutors. She had pleaded guilty in June to one count of obstruction of a U.S. Securities and Exchange Commission proceeding in exchange for the sentence.
After U.S. District Judge David Hittner handed down the sentence he revoked Pendergest-Holt's bond, and she was taken into custody. She waved to her husband Jim Holt before she was put in handcuffs and taken from the courtroom by federal marshals.
A tearful Pendergest-Holt told Hittner prior to sentencing that she was sorry for putting her trust in Stanford and others in his financial empire, including the former chief financial officer, James M. Davis, who also has pleaded guilty and faces up to 30 years in prison.
"I'm sorry I was so trusting in people who didn't deserve my trust, and my trusting them caused harm in others. I apologize greatly," she said.
Prosecutors said Stanford, 62, used the money from investors who bought certificates of deposit from his bank on the Caribbean island nation of Antigua to fund a string of failed businesses, bribe regulators and pay for a lavish lifestyle that included yachts, a fleet of private jets and sponsorship of cricket tournaments. Authorities said Stanford and others in his companies lied to investors from more than 100 countries, telling them their funds were being safely invested in stocks, bonds and other securities.
Pendergest-Holt, 38, a native of Baldwyn, Miss., was the first person indicted in the case. Prosecutors said she and other executives conspired to hide the bank's true financial health and provide misleading testimony to the SEC in 2009 when it was investigating Stanford's bank.
One of her attorneys, Chris Flood, told Hittner that Pendergest-Holt was also a victim of Stanford's Ponzi scheme and lost her life savings. Flood had asked that she not be imprisoned for three years but be allowed to serve that time in home confinement, a halfway house or a combination of the two.
She "is an extremely upstanding citizen and not a danger to anyone," Flood said. "Don't punish her for the crimes of Allen Stanford or Jim Davis."
But prosecutor Jason Varnado told Hittner that from Pendergest-Holt's statement in court on Thursday and from letters her family and friends had submitted calling her a victim, the former Stanford executive wasn't taking full responsibility for what she had done. Varnado asked that she be sent to prison.
"She led (investors) to believe (their money) was invested in a particular manner ... Ms. Holt is not a victim. She is a federal felon," Varnado said.
As part of the plea deal, prosecutors will drop 20 other counts she faced, including conspiracy, wire and mail fraud.
Stanford, the one-time billionaire, was convicted in March on 13 of 14 fraud-related counts. In June, Hittner sentenced Stanford to 110 years in prison. He is serving his sentence in a prison in Central Florida.
Two other indicted ex-executives - Gilbert Lopez, the ex-chief accounting officer, and Mark Kuhrt, the ex-global controller - are set for trial later this month. A former Antiguan financial regulator was also indicted and awaits extradition to the U.S.