- The Washington Times - Thursday, March 12, 2009

DALLAS (AP) — Texas billionaire R. Allen Stanford’s chief investment officer is trying to back out of an order that placed her assets under the control of a court-appointed receiver, saying that receiver’s lawyers seized her family’s car, rifled through her underwear drawer and diverted her mail.

Calling it a “stunning act of bad faith,” Laura Pendergest-Holt’s lawyer said attorneys for the receiver rummaged through her personal belongings and even mocked her husband at their Mississippi home earlier this month, just hours after she cooperated with the government by agreeing to an injunction.

The Securities and Exchange Commission has accused Stanford and his top officers of running a “massive Ponzi scheme.” Pendergest-Holt faces a criminal charge of obstructing justice for allegedly lying about her knowledge of the firm’s activities.

Dallas attorney Jeffrey M. Tillotson has asked a federal district court in Dallas to hear an emergency motion Thursday requesting the end of receivership control over Pendergest-Holt’s assets, the return of property improperly seized and protection from future intrusions by the receiver, the Securities and Exchange Commission and the Department of Justice.

Tillotson said the receiver’s powers are too broad and violate her constitutional rights now that she is facing a criminal charge in the case. Pendergest-Holt agreed to the injunction placing her assets under the receiver’s control without knowing the government was going to file criminal charges against her.



“In effect, the Receiver’s lawyers, in the context of the civil case, have conducted a free-wheeling warrantless search of Ms. Pendergest-Holt’s home and have taken Ms. Pendergest-Holt’s personal property without due process of law,” Tillotson wrote in an emergency motion filed Tuesday. “Because the Receiver’s lawyers are duty-bound to cooperate with the SEC, DOJ and FBI under the Receivership Order, the Government will no doubt be the primary beneficiary of the Receiver’s unlawful search and seizure of Defendant’s property.”

In the motion, Pendergest-Holt alleges that the receiver’s lawyers, accompanied by a U.S. marshal, “raided” her Mississippi home on March 2. They eventually carried off “four boxes of documents containing the Holt family’s mail, tax documents and other personal papers unrelated to the civil action filed by the SEC.”

“The lawyers took what they pleased … and were so delighted in doing so that, at one point, they gleefully indicated to Mr. Holt that he was not going to be living in the house much longer,” Pendergest-Holt alleges in the motion. “Finally, as the ultimate insult, the Receiver’s lawyers seized one of the family’s cars.”

Charles Gale, one of the attorneys who Tillotson said went to his client’s home, declined to comment. The other attorney, Richard Phillips, did not immediately respond to a message left by The Associated Press.

The SEC on Feb. 17 brought civil charges against Stanford and his top officers, saying they were involved in an $8 billion fraud in which investors were lied to about the investments sold by the bank as certificates of deposit and promised unrealistically high rates of return.

Stanford has not been charged with a crime. His attorney has said his client denies the allegations made by the SEC. According to court documents Wednesday, Stanford and one of his top officials, James M. Davis, have asserted their Fifth Amendment right against self-incrimination in the federal government’s fraud case against them and Stanford’s companies.

Stanford accounts were frozen under a restraining order and Stanford’s companies have been in receivership since the SEC filed its civil complaint. The receiver is Texas attorney Ralph Janvey, and in recent weeks he has been releasing brokerage accounts unrelated to either the certificates of deposits or accounts invested directly with Antigua-based Stanford International Bank.

The freeze affected thousands of accounts not tied directly to the alleged fraud and left account holders unable to access money to pay their bills. Janvey has indicated that he will ask the court Thursday to release more brokerage accounts unrelated to the alleged fraud.

Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide