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What you don’t know about R. Allen Stanford you can find in this week’s story about the country-fried Madoff in the paper version of Unfair Park. But far less is known about his second-in-command, James Davis. Maybe it’s time to get to it: Only days ago, Stanford told ABC News that he expects to be indicted by a federal grand jury within the next two weeks. This announcement comes after Davis, Stanford’s old college roommate at Baylor and his chief financial officer, spent the last few weeks cooperating with the federal investigation.
“He accepts responsibility for his actions,” says Davis’s attorney David Finn, a Dallas-based criminal attorney and former judge. “There’s cooperation and then there’s super cooperation…Jim understands that there is no bad time to tell the truth.”
Due in part to that cooperation, says Finn, the SEC recently uncovered
around $110 million in assets — cash and/or hedge fund holdings — in
London. On March 30, the SEC obtained an order from the High Court of
Justice, Queen’s Bench Division in London to freeze all accounts
related to Stanford held at Credit Suisse and HSBC.
So why is Davis cooperating? For one thing, it would appear he’s on the hook for a lot less than his boss. While Davis made less than $10 million over 10 years, according to Finn, Stanford is allegedly worth $2.2 billion. And the SEC in its civil complaint accused Stanford of skimming at least $1.6 billion in personal loans from his Antigua bank as of January.
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“Don’t get me wrong, they’re both large sums,” Finn tells Unfair Park. “But when you compare one to the other, they’re in different hemispheres.”
What exactly Davis is telling the feds remains confidential. “I think that when this case goes to trial there will be full accounting for the actions and missteps attributable to Mr. Davis, but I can’t go into detail now,” Finn says. “There’s a basic rule in fraud cases: Follow the money. I think that when the investigators and the prosecutors follow the money, it will lead them directly to Sir Allen.”
Davis was born in El Paso in 1948, and after he graduated from Baylor
in 1975, he and Stanford went their separate ways, reuniting years later at the
wedding of a mutual friend. Davis jumped on board with Stanford
initially making about $50,000 a year, Finn says.
