Top Stanford Financial Executive Arrested for Obstructing Federal Investigation

The chief investment officer of Stanford Financial Group, the firm accused of carrying out an $8 billion scheme to defraud thousands of investors, has been arrested on charges she was blocking the government’s investigation into the allegations.

Laura Pendegest-Holt was taken into custody on February 26, 2009 by federal authorities in Houston, Texas, where Stanford Financial is headquartered. She was taken to a federal detention center and set to appear in court for arraignment.

Officers from the Department of Justice and the FBI are assisting the Securities and Exchange Commission in some aspects of the investigation, including the arrest of Pendegest-Holt, officials said.

Pendegest-Holt was a top financial officer serving under Allen Stanford, chief officer of the financial group, who was charged this month by the SEC on charges he sold fraudulent certificates of deposit to investors. Stanford remains out of custody pending the federal investigation into his financial empire.

Obstruction of Investigation Alleged

Pendegest-Holt is accused of obstructing the SEC investigation into the fraud allegations by giving false or incomplete answers during questioning. She failed to reveal how much she knew about investments in Stanford International Bank and repeatedly lied to investigators about the bank’s Tier III portfolio, which held about 81 percent of the bank’s holdings, authorities said.

The investment officer also did not reveal that she was a member of the bank’s investment committee, according to the SEC.

Former Executive Says He Was in the Dark

A former Stanford senior investment officer has told authorities that he did not know where 90 percent of Stanford Financial Group’s portfolio was invested. Michael Zarich said Pendergest-Holt trained him for the job and taught him to deflect investor questions about the group’s financial holdings.

Stanford Financial catered to wealthy investors in Antigua, the Caribbean, and Latin America. Stanford International Bank was based in Antigua, where Stanford lived and earned respect and admiration as a major financial player in the small Caribbean nation.

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