Laura Pendergest-Holt
Encyclopedia
Laura Pendergest-Holt is an alleged Ponzi scheme artist financier
and former Chief Investment Officer of Stanford Financial Group
, who was charged with a civil charge of fraud on February 17, 2009. On May 12, 2009, Pendergest-Holt was indicted by a federal grand jury on two counts of a criminal complaint of obstructing a fraud investigation
and conspiracy to obstruct justice
.
In early 2009, Stanford Financial became the subject of several fraud
investigations, and on February 17, 2009, Pendergest-Holt was charged by the U.S. Securities and Exchange Commission with fraud and multiple violations of U.S. securities laws for alleged "massive ongoing fraud" involving $8 billion in certificates of deposits. The FBI raided three of Stanford's offices in Houston, Memphis
, and Tupelo, Mississippi
. On February 27, 2009, the SEC amended its complaint to describe the alleged fraud as a "massive Ponzi scheme
".
The Securities Exchange Commission's (SEC) charged Pendergest-Holt, Allen Stanford
, and James M. Davis
of fraud in connection with Stanford Financial Group's US$8 billion certificate of deposit
(CD) investment scheme that offered "improbable and unsubstantiated high interest rates". This led the Federal government to freeze the assets of Allen Stanford, Stanford International Bank
, Stanford Group Co., and Stanford Capital Management. In addition, Stanford International Bank placed a 60-day moratorium on early redemptions of its CDs.
On February 18 and 19, 2009, Ecuador
and Peru
suspended the operations of local Stanford units, and, in Venezuela
and Panama
, the governments seized local units of Stanford Bank. Mexico
's financial regulator announced on February 19 that it was investigating the local affiliate of Stanford bank for possible violation of banking laws.
On February 27, 2009, Pendergest-Holt was arrested by Federal agents in connection with the alleged fraud. On that day the SEC said that Stanford and his accomplices operated a "massive Ponzi scheme", misappropriated billions of investors' money and falsified the Stanford International Bank's records to hide their fraud. "Stanford International Bank's financial statements, including its investment income, are fictional," the SEC said.
The complaint alleges that she failed to tell investigators during testimony that she was a member of the Stanford International Bank's investment committee or the extent of her knowledge of the bank's Tier III Portfolio. The complaint also says during an interview on February 17 with the SEC in Memphis, Tennessee
, Pendergest-Holt "continued to obstruct the SEC's investigation by saying she had no knowledge of the Tier III Portfolio."
Michael Zarich, Stanford's senior investment officer, has told authorities he did not know where ninety percent of Stanford’s portfolio was invested. Zarich has said he was trained by Pendergest-Holt to deflect questions about the investment strategy while pitching to wealthy clients in Antigua, where the bank was chartered. When he tried to learn how the money was invested, Zarich has said Pendergest-Holt and Davis turned him away. Zarich also has said Pendergest-Holt armed him with answers for potential investors worried about the size of Stanford’s tiny, Antigua-based auditor.
federal grand jury on two counts of obstructing a fraud investigation
and conspiracy to obstruct justice
. She is free on a $300,000 bond.
Pendergest-Holt, Federal Bureau of Prisons
(BOP)#43550-279, was released from BOP custody on February 27, 2009.
, a suburb of Tupelo, Mississippi
with her husband, Jim Holt. She attended Baldwyn High School in Baldwyn, Mississippi University for Women
(majoring in mathematics), and University of Mississippi
(master's degree of science). She first met James Davis at the First Baptist Church in Baldwyn. A columnist from Memphis, Tennessee
, described Pendergest-Holt as similar to a character from a work of Theodore Dreiser
.
The employees of Stanford Financial were a very tight-knit group that were bound together by family ties, leading to allegations of nepotism
. Pendergest-Holt has a sister married to Ken Weeden, Stanford Financial Group’s former managing director for investments and research. Pendergest-Holt’s cousin Heather Sheppard was an “equity specialist” at the company and was also James Davis’s secretary.]
Financier
Financier is a term for a person who handles typically large sums of money, usually involving money lending, financing projects, large-scale investing, or large-scale money management. The term is French, and derives from finance or payment...
and former Chief Investment Officer of Stanford Financial Group
Stanford Financial Group
The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States authorities in early 2009....
, who was charged with a civil charge of fraud on February 17, 2009. On May 12, 2009, Pendergest-Holt was indicted by a federal grand jury on two counts of a criminal complaint of obstructing a fraud investigation
Obstruction of justice
The crime of obstruction of justice, in United States jurisdictions, refers to the crime of interfering with the work of police, investigators, regulatory agencies, prosecutors, or other officials...
and conspiracy to obstruct justice
Conspiracy (crime)
In the criminal law, a conspiracy is an agreement between two or more persons to break the law at some time in the future, and, in some cases, with at least one overt act in furtherance of that agreement...
.
In early 2009, Stanford Financial became the subject of several fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
investigations, and on February 17, 2009, Pendergest-Holt was charged by the U.S. Securities and Exchange Commission with fraud and multiple violations of U.S. securities laws for alleged "massive ongoing fraud" involving $8 billion in certificates of deposits. The FBI raided three of Stanford's offices in Houston, Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
, and Tupelo, Mississippi
Tupelo, Mississippi
Tupelo is the largest city in and the county seat of Lee County, Mississippi, United States. It is the seventh largest city in the state of Mississippi, smaller than Meridian, and larger than Greenville. As of the 2000 United States Census, the city's population was 34,211...
. On February 27, 2009, the SEC amended its complaint to describe the alleged fraud as a "massive Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
".
Regulatory investigation
During the week of February 13, 2009, Stanford issued a letter to clients saying: "Regulatory officers have visited our offices and have stated that these are routine examinations". On February 17, 2009, U.S. Federal agents entered the company's Houston and Memphis offices. Law enforcement officials placed signs on the office doors stating that the company was temporarily closed: "The company is still in operation but under the management of a receiver".The Securities Exchange Commission's (SEC) charged Pendergest-Holt, Allen Stanford
Allen Stanford
Robert Allen Stanford is a former prominent financier and sponsor of professional sports who is in prison awaiting trial on charges his investment company was a massive Ponzi scheme and fraud. Stanford was the chairman of the now defunct Stanford Financial Group of Companies. A fifth-generation...
, and James M. Davis
James M. Davis
James M. Davis is the former chief financial officer of Stanford Financial Group. On 27 August 2009 he pled guilty to charges of fraud and obstruction of Justice in relation to a $7 billion investment fraud Ponzi scheme allegedly run by the company....
of fraud in connection with Stanford Financial Group's US$8 billion certificate of deposit
Certificate of deposit
A certificate of Deposit is a time deposit, a financial product commonly offered to consumers in the United States by banks, thrift institutions, and credit unions....
(CD) investment scheme that offered "improbable and unsubstantiated high interest rates". This led the Federal government to freeze the assets of Allen Stanford, Stanford International Bank
Stanford International Bank
Stanford International Bank was a bank based in the Caribbean, which operated from 1986 to 2009. It was an affiliate of the Stanford Financial Group.- Operations :...
, Stanford Group Co., and Stanford Capital Management. In addition, Stanford International Bank placed a 60-day moratorium on early redemptions of its CDs.
On February 18 and 19, 2009, Ecuador
Ecuador
Ecuador , officially the Republic of Ecuador is a representative democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. It is one of only two countries in South America, along with Chile, that do not have a border...
and Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
suspended the operations of local Stanford units, and, in Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
and Panama
Panama
Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...
, the governments seized local units of Stanford Bank. Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
's financial regulator announced on February 19 that it was investigating the local affiliate of Stanford bank for possible violation of banking laws.
On February 27, 2009, Pendergest-Holt was arrested by Federal agents in connection with the alleged fraud. On that day the SEC said that Stanford and his accomplices operated a "massive Ponzi scheme", misappropriated billions of investors' money and falsified the Stanford International Bank's records to hide their fraud. "Stanford International Bank's financial statements, including its investment income, are fictional," the SEC said.
Indictment on civil securities fraud complaint
The FBI alleges that Pendergest-Holt met with several Stanford corporate officers in Miami in February 2009 to prepare for her testimony with the SEC. The FBI alleges that at the meeting she discussed the Stanford International Bank's Tier III Portfolio and a $1.6 billion loan to a shareholder (Allen Stanford) from the Tier III Portfolio. The portfolio represented about 81 percent of the bank's portfolio. The FBI complaint alleges that when Pendergest-Holt met with SEC investigators she made:-
- "several misrepresentations under oath. Pendergest-Holt also allegedly misrepresented her own preparatory work for the testimony, saying she had met with no one other than the attorney as she worked to ready herself for the session with the SEC."
The complaint alleges that she failed to tell investigators during testimony that she was a member of the Stanford International Bank's investment committee or the extent of her knowledge of the bank's Tier III Portfolio. The complaint also says during an interview on February 17 with the SEC in Memphis, Tennessee
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
, Pendergest-Holt "continued to obstruct the SEC's investigation by saying she had no knowledge of the Tier III Portfolio."
Michael Zarich, Stanford's senior investment officer, has told authorities he did not know where ninety percent of Stanford’s portfolio was invested. Zarich has said he was trained by Pendergest-Holt to deflect questions about the investment strategy while pitching to wealthy clients in Antigua, where the bank was chartered. When he tried to learn how the money was invested, Zarich has said Pendergest-Holt and Davis turned him away. Zarich also has said Pendergest-Holt armed him with answers for potential investors worried about the size of Stanford’s tiny, Antigua-based auditor.
Indictment on criminal obstruction of justice complaint
On May 12, 2009, Pendergest-Holt was indicted by a HoustonHouston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
federal grand jury on two counts of obstructing a fraud investigation
Obstruction of justice
The crime of obstruction of justice, in United States jurisdictions, refers to the crime of interfering with the work of police, investigators, regulatory agencies, prosecutors, or other officials...
and conspiracy to obstruct justice
Conspiracy (crime)
In the criminal law, a conspiracy is an agreement between two or more persons to break the law at some time in the future, and, in some cases, with at least one overt act in furtherance of that agreement...
. She is free on a $300,000 bond.
Pendergest-Holt, Federal Bureau of Prisons
Federal Bureau of Prisons
The Federal Bureau of Prisons is a federal law enforcement agency subdivision of the United States Department of Justice and is responsible for the administration of the federal prison system. The system also handles prisoners who committed acts considered felonies under the District of Columbia's...
(BOP)#43550-279, was released from BOP custody on February 27, 2009.
Private life
Pendergest-Holt lives in Baldwyn, MississippiBaldwyn, Mississippi
Baldwyn is a city in Lee and Prentiss Counties, Mississippi, United States. Baldwyn is located on Highway 370, due north of Tupelo, Mississippi. It was incorporated by Act of the Legislature in Tishomingo and Itawamba Counties on April 1, 1861...
, a suburb of Tupelo, Mississippi
Tupelo, Mississippi
Tupelo is the largest city in and the county seat of Lee County, Mississippi, United States. It is the seventh largest city in the state of Mississippi, smaller than Meridian, and larger than Greenville. As of the 2000 United States Census, the city's population was 34,211...
with her husband, Jim Holt. She attended Baldwyn High School in Baldwyn, Mississippi University for Women
Mississippi University for Women
Mississippi University for Women, also known as MUW or simply the "W" is a four-year coeducational public university located in Columbus, Mississippi. It was formerly known as Industrial Institute and College and later Mississippi State College for Women...
(majoring in mathematics), and University of Mississippi
University of Mississippi
The University of Mississippi, also known as Ole Miss, is a public, coeducational research university located in Oxford, Mississippi. Founded in 1844, the school is composed of the main campus in Oxford, four branch campuses located in Booneville, Grenada, Tupelo, and Southaven as well as the...
(master's degree of science). She first met James Davis at the First Baptist Church in Baldwyn. A columnist from Memphis, Tennessee
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
, described Pendergest-Holt as similar to a character from a work of Theodore Dreiser
Theodore Dreiser
Theodore Herman Albert Dreiser was an American novelist and journalist of the naturalist school. His novels often featured main characters who succeeded at their objectives despite a lack of a firm moral code, and literary situations that more closely resemble studies of nature than tales of...
.
The employees of Stanford Financial were a very tight-knit group that were bound together by family ties, leading to allegations of nepotism
Nepotism
Nepotism is favoritism granted to relatives regardless of merit. The word nepotism is from the Latin word nepos, nepotis , from which modern Romanian nepot and Italian nipote, "nephew" or "grandchild" are also descended....
. Pendergest-Holt has a sister married to Ken Weeden, Stanford Financial Group’s former managing director for investments and research. Pendergest-Holt’s cousin Heather Sheppard was an “equity specialist” at the company and was also James Davis’s secretary.]