Stanford Accountants, 20 Years in Prison

Gilbert Lopez, 70, former chief accounting officer of R. Allen Stanford, and Mark Kuhrt, 40, Lopez’ former controller were sentenced to 20 years in prison for helping to conceal Stanford’s $7 billion Ponzi scheme.

US District Judge David Hittner imposed the sentences last February 15 in Houston. The two men were convicted in November of conspiracy in hiding the fraud.

Prosecutors said that the fraud was built on counterfeit certificates of deposit at Antigua-based Stanford International Bank Ltd. The two were the last ones of the Stanford executives to be criminally tried for their roles in the scheme.

“Mr. Lopez’ lawyer said he was down the chain of command, but he was the number one accounting executive for a decade,” prosecutor Jeffrey Goldberg told the judge, asking for a 25-yr term for the former accounting chief. “He knew the crucial thinking – massive misuse of victim’s money.”

The men were found guilty of 9 of 10 wire fraud counts and 1 count of conspiracy to commit wire fraud. They have been jailed in downtown Houston while waiting for the sentence.

Neither of the two spoke during the hearing.

Jack Zimmermann, Lopez’ lawyer, asked for a 3-year sentence in prison and a 2-year home confinement, followed by 3 years supervised release. He said that this would avoid any differences between his client’s punishment and other defendants’.

Appeal Planned

The recommendation of 25 years by the government “overstates the gravity of conduct of Gil Lopez,” Zimmermann said. The verdict and sentence will be appealed, he said later on.

Richard Kuniansky, Kuhrt’s defense lawyer, contested prosecutors’ claim that Lopez and his client were knowledgeable about Stanford’s $2 billion in secret diversions from the bank.

“He had a belief that was a loan by Mr. Stanford that was going to be repaid,” the attorney said, asking for a 5-year sentence for Kuhrt. He also said that other executives were “exponentially more involved” in the conspiracy than Kuhrt.

“Had he known what he know now, he would’ve done a lot of things differently, and he’s lost a lost of sleep over it,” Kuniansky said.

The prosecutor, Goldberg, urged Hittner to reject what he called Lopez’ and Kurth’s “offensive claims that they were conned and just like the victims.”

No excuse

“No corporate office should be allowed to commit fraud with their boss and when they get caught be allowed to claim they are innocent because they were just following order,” he said.

The judge said he calculated the sentences for both men after finding out they lied during his trial testimony, as claimed by the government.

Aside from the prison term, Lopez’ punishment includes a $25,000 fine.

The judge said he rejected Kuhrt’s defense claim that he “didn’t receive a dime other than his salary and bonuses” from the fraud.

Three years of supervised release was added by Hittner to Kuhrt’s 20-year sentence. Waiving the fine, the judge said Kuhrt is indigent and he’ll appoint a public lawyer to handle his appeal.

It was also asked by their lawyers that they be assigned to prisons near their homes in Houston.

Stanford’s Crimes

Stanford, 62, was convicted in March of being the mastermind of the fraud and stealing more than $2 billion of investor funds. The money stolen was used to for his lavish lifestyle of yachts, private jets, and waterfront mansions along with his side enterprises nearing bankruptcy. He is appealing his conviction and sentence of a 110-year imprisonment in Florida, which he is serving now.

Lopez’ and Kuhrt’s lawyers convinced the jurors to acquit the men, claiming they were tricked by Stanford and his top deputy, finance chief James M. Davis, to create false financial documents that investors relied on.

In 2009, Davis, 64, cooperated with prosecutors and reached a plea deal in which he said Stanford’s operation was a fraud from the beginning. He was sentenced last month to five years I prison based on his cooperation and ability to spearhead the discovery of secret bank accounts and evidence used to convict Stanford. 

Former Chief Investment Officer, Laura Pendergest Holt, was also pleaded guilty in June and was sentenced to three years in prison due to obstructing an investigation by the U.S. Securities and Exchange Commission.

Posted by Diane Araga, on February 11, 2013 at 9:00 AM