The former chief financial officer of Standford Financial Group, the firm that has been accused of perpetrating a US$7 billion fraud, has pled guilty to fraud and obstruction charges.

The U.S. Federal Bureau of Investigation reports that James Davis, 60, was charged with conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a U.S. Securities and Exchange Commission investigation back in June.

Lanny Breuer, assistant attorney general of the criminal division, and Tim Johnson, the U.S. Attorney for the Southern District of Texas, announced Thursday, that Davis, former CFO of Houston-based Stanford Financial Group, pleaded guilty to fraud and obstruction charges.

According to the plea documents, Davis admitted that he, and his co-conspirators, defrauded investors who purchased approximately US$7 billion in certificates of deposit administered by Stanford International Bank Ltd., an offshore bank located in Antigua, and that they misappropriated most of those assets, while misrepresenting the firm’s financial condition, its investment strategy and the extent of its regulatory oversight by Antiguan authorities. Also according to the plea documents, Davis also admitted that they made a number of misrepresentations to the SEC in order to impede its investigation.

None of the other accused in the case have been tried yet, and a trial date has not been set. They are presumed innocent.

Davis has also agreed to the entry of a preliminary order of forfeiture in the amount of US$1 billion.

IE