Stanford CFO James Davis Takes The Stand
by: Andrew Schneider, February 3, 2012 5:02:00 am
Davis testified that when he first became CFO in 1991, he discovered Stanford’s banking operations contained only half as much in assets as they were reporting to investors in the bank’s certificates of deposit.
When he confronted his boss with his concerns, Davis said, Stanford replied that he planned to grow CD sales so quickly and in such large amounts that, when the money was invested, it would earn more than enough to pay back current CD holders with interest.
Davis said he raised his concerns with Stanford over and over for years. He demonstrated how, on one occasion, he walked into Stanford’s office, hands clasped together as if handcuffed and ankles pressed together as if manacled, to indicate what would happen to both of them if they were caught. Davis said Stanford simply laughed it off and told him, “I’ll just say you were back here, while I was out trying to grow my companies. I’ll blame it all on you.”
Davis resumes his testimony this morning.