Experts: Stanford’s trial not won with one witness

HOUSTON—With testimony about bribes, blood oaths, faked profits and secret Swiss bank accounts, the ongoing fraud trial of jailed and former jet setting Texas tycoon R Allen Stanford has had its share of drama. And many of the details about the alleged fraud that prosecutors say bilked investors out of more than US$7 billion in one of the largest Ponzi schemes in US history were provided by Stanford’s former top money man and the prosecution’s star witness, James M Davis, over more than four days of testimony.

But Stanford’s attorneys did their best to tear down Davis and portray him to jurors as a liar, adulterer, tax cheat and the true mastermind of the scheme who has pleaded guilty to three fraud and conspiracy charges as part of a plea deal with prosecutors and will say anything to avoid a lengthy prison term. While legal experts say Davis’ credibility will be important with jurors during their deliberations, a fraud case as complex as this one isn’t won or lost with one witness and Stanford’s fate remains unclear.

For the last three weeks, federal prosecutors have methodically presented evidence, including testimony from Davis and other ex-workers of Stanford’s companies as well as emails, financial statements and other documents, in support of their claims the flamboyant businessman orchestrated a 20-year scheme that took billions from investors through the sale of certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua. Davis, the former chief financial officer of Stanford’s companies, portrayed his ex-boss as the leader of the fraud who burned through billions of CD deposits to pay for failing businesses and fund his lavish lifestyle, including a fleet of private jets and yachts.

Stanford is on trial for 14 counts, including mail and wire fraud, and could be sentenced to more than 20 years in prison if convicted. Stanford was once considered one of the US’s wealthiest people, with an estimated net worth of more than US$2 billion. He’s been jailed without bond since being indicted in 2009. Prosecutors could wrap up their case by early next week. Defence attorneys have tried to show the financier was a savvy businessman whose financial empire, headquartered in Houston, was legitimate. They said he was trying to reorganize his businesses to pay back investors when authorities seized his companies. Stanford’s lawyers accused Davis of leading the fraud and stealing millions of depositors' funds. They also questioned his character by highlighting extra marital affairs he’s had and income taxes he’s failed to pay.

Anthony Sabino said the defense strategy with Davis is “classic, right out of the playbook.” Testimony from a witness like Davis will be viewed “with a healthy degree of skepticism” by the jury, Mintz said. Sabino said it’s hard to know what weight the jury will give Davis’ testimony. Hilder said it appears prosecutors have done a good job of keeping their theory simple and not overwhelming jurors with documents and records. Defence attorneys will have to continue doing the opposite because “the more complicated (the trial) is, the easier it is to argue reasonable doubt,” he said.

Once the defence begins its case, the question will be whether Stanford will testify, as his attorneys promised during their opening statements. Sabino and Mintz don’t think that’s a good idea. “More often than not, a defendant hurts rather than helps their own case,” Mintz said.

AP