HOUSTON (AP) -- The star prosecution witness at the fraud trial of Texas financier R. Allen Stanford expressed remorse Tuesday before being sentenced to five years in prison for helping to bilk investors out of more than $7 billion in one of the biggest Ponzi schemes in U.S. history.
James M. Davis had faced up to 30 years in prison after pleading guilty in 2009 to three fraud and conspiracy charges. At Stanford's trial last year, Davis testified that as chief financial officer of Stanford's companies he helped the financier to fake his bank's profits and fabricate documents to hide the fraud.
In a brief statement, Davis said he will feel remorse and regret for the rest of his life.
"I am ashamed and I'm embarrassed," Davis, 64, said at the sentencing hearing in Houston federal court. "I've perverted what was right and I hurt thousands of investors. I betrayed their trust and also associates and neighbors and friends and my family."
Many of the dramatic details at Stanford's trial — including testimony about bribes and blood oaths — came from Davis, who portrayed his ex-boss as the leader of the fraud who burned through billions of CD deposits. Stanford, a one-time billionaire, was convicted in March on 13 fraud-related counts and sentenced to 110 years in prison.
Prosecutor Jason Varnado had asked for Davis to get a 10-year prison term. He told U.S. District Court Judge David Hittner that while Davis' cooperation in the case was outstanding, he only came to authorities after Stanford's business empire was shut down and he had no other options. Davis' sentence should reflect the severity of his crimes, Varnado said.
"Mr. Davis for 20 years lied and deceived thousands of investors, employees and the public, and helped Allen Stanford commit one of the largest frauds in American history," he said.
Defense attorney, David Finn, said Davis' cooperation contributed greatly to the government's efforts to locate and secure funds for investors.
"I'm not here to tell your honor my client was a saint," Finn said. "He was remorseful, contrite and tried to make amends for the injuries he's inflicted."
Prosecutors say Stanford persuaded investors to buy certificates of deposit from his bank in Antigua, then used that money to bankroll a string of failed businesses and his lavish lifestyle, including a fleet of private jets and yachts.
Stanford's defense attorneys accused Davis of being behind the fraud and tried to discredit him by calling him a liar and tax cheat and telling jurors of his extra marital affairs.
On Tuesday, Hittner ordered Davis to report to federal prison within 60 days, allowing him time to meet with investors who have filed lawsuits against banks, law firms and others accused in the fraud.
Angela Shaw, a Dallas-area woman, founded the Stanford Victims Coalition after three generations of her family lost $4.5 million in the fraud.
Shaw said that Davis' sentence was "a little light" but she was grateful that Davis was willing to provide more details about how the fraud worked to help her group with their lawsuits.
"Hopefully his cooperation will lead to substantial recovery," Shaw said.
A receiver appointed by a federal judge in Dallas to oversee the recovery of funds from Stanford's business empire earlier this month announced a plan to make an initial distribution of $55 million to investors who lost money in the scheme. Shaw's group has been critical of the proposed distribution, saying it represents a recovery of one cent on the dollar for investors and that a majority of money recovered has been spent on expenses. The plan has yet to be approved.
Another top executive in Stanford's now-defunct empire — former chief investment officer Laura Pendergest-Holt — was sentenced to three years in prison in September after pleading guilty to one count of obstruction of a U.S. Securities and Exchange Commission proceeding.
Gilbert Lopez, the ex-chief accounting officer, and Mark Kuhrt, the ex-global controller, were convicted in November of conspiracy to commit wire fraud and nine counts of wire fraud. They are set to be sentenced Feb. 14.
A former Antiguan financial regulator was also indicted and awaits extradition to the U.S.
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