Feds: Stanford Ran Massive Ponzi Scheme

Chief investment officer freed on 300K bond after night in jail
By Rob Quinn,  Newser Staff
Posted Feb 28, 2009 6:22 AM CST
Feds: Stanford Ran Massive Ponzi Scheme
Chief investment officer of troubled Stanford Financial Group Laura Pendergest-Holt, right, and her attorney Dan Cogdell leave the federal courthouse Friday, Feb. 27, 2009 in Houston.    (AP Photo/Pat Sullivan)

Federal officials have labeled shamed financier R. Allen Stanford’s operation a Ponzi scheme for the first time, the Houston Chronicle reports. The accusation—meaning the company used cash from new investors to pay older ones—came in an amended civil fraud complaint from the SEC yesterday alleging Stanford and a fellow exec misappropriated huge sums and engineered a bogus $1.6 billion loan to the firm.

Stanford Financial's chief investment officer, Laura Pendergest-Holt, the only person charged with a criminal offense so far in the federal probe, was freed on $300,000 bond yesterday after spending the night in jail. The judge ordered Pendergest-Holt to get a job outside the financial industry—even if it's "wrapping hamburgers." Her lawyer slammed authorities for charging his client but not her billionaire boss. (More Laura Pendergest-Holt stories.)

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