Bloomberg News

Stanford Accountant Witness Says No Fraud in Annual Reports

February 24, 2012

Feb. 23 (Bloomberg) -- Morris Hollander, an accountant testifying at R. Allen Stanford’s trial, told a jury he saw no sign of fraud in annual reports issued by the financier’s Antigua bank.

“I see no evidence that indicates there was any fraudulent financial reporting contained in those reports,” Hollander said during his second day of testimony for the defense in the trial at the U.S. courthouse in Houston.

Hollander, a partner in the international accounting firm Marcum Group LLP, told the court while his testimony was based on those reports, he hasn’t seen underlying accountant work papers from which financial figures in those reports were derived.

Stanford, 61, is accused of leading a $7 billion investor fraud scheme centered on the sale of certificates of deposit from the Antigua-based Stanford International Bank Ltd. He faces mail fraud and wire fraud charges carrying maximum sentences of 20 years’ imprisonment if he is found guilty. He is also accused of obstructing a U.S. Securities and Exchange Commission probe.

The financier, who has been on trial since Jan. 23, is fighting a cold that has forced the early adjournment of the trial each of the past two days. Stanford has been in court for the entirety of today’s proceedings.

Challenged Testimony

Federal prosecutors, led by Andrew Warren, repeatedly challenged Marcum’s testimony today, prompting U.S. District Judge David Hittner to reiterate that Hollander’s recitation of figures from Stanford financial records are admissible only for the fact they were said and not for their objective truthfulness.

Still, based upon a consolidated statement of Stanford business holdings in December 2008, the financier held more than $9 billion in assets, Hollander testified.

Warren greeted Hollander on cross-examination late today with the question, “Hypothetically, if I tell you I have a trillion dollars in my pocket, how much money do I have in my pocket?”

The case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston).

--Editors: Mary Romano, Andrew Dunn

To contact the reporters on this story: Andrew Harris in Chicago at aharris16@bloomberg.net; Laurel Brubaker Calkins in Houston at laurel@calkins.us.com

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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