Stanford hospitalized as ex-finance chief pleads guilty

HOUSTON -- Texas financier R. Allen Stanford, jailed on charges of bilking investors out of $7 billion, was hospitalized Thursday with an irregular heartbeat and high pulse, just hours before his ex-finance chief became the first person to plead guilty in the case.

Stanford was set to appear in a Houston federal courtroom for a hearing on whether he can get a new attorney. His current lawyer, Dick DeGuerin, has asked for permission to quit the case because he doesn't have assurances he will be paid.

In the same courtroom, Stanford's former chief financial officer, James. M. Davis, pleaded guilty Thursday to three counts: conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a Securities and Exchange Commission investigation.

"I did wrong. I'm sorry. I apologize. I take responsibility for my actions," Davis, 60, said as he left the federal courthouse after his hearing.

Davis' attorney David Finn said his client has been cooperating with prosecutors for the last six months and the guilty plea is part of a deal with the Justice Department in exchange for a possible reduced sentence.

Davis faces up to 30 years in prison when he is sentenced. While a sentencing date of Nov. 20 was set, Finn said he believes that will be delayed.

As part of his plea agreement, Davis was also ordered to forfeit $1 billion in proceeds he made from his illegal actions.

Finn said authorities have seized all his client's assets and Davis is broke and doing manual labor on a family farm in Michigan, making $10 an hour. Davis is originally from Mississippi.

Stanford, Davis and other executives of the now defunct Houston-based Stanford Financial Group are accused of orchestrating a massive Ponzi scheme by advising clients to invest more than $7 billion in certificates of deposit from the Stanford International Bank in the Caribbean island of Antigua, creating false records to inflate the bank's assets and then misusing the money, in part to pay for Stanford's lavish lifestyle.