R. Allen Stanford’s former chief accounting officer, Gilbert Lopez, 70, and his former controller, Mark Kuhrt, 40, were sentenced to 20 years in prison for helping to conceal Stanford’s $7 billion Ponzi scheme.
U.S. District Judge David Hittner imposed the sentences today in Houston. The men were convicted in November of conspiring to hide the fraud.
The fraud was built on bogus certificates of deposit at Antigua-based Stanford International Bank Ltd., prosecutors said. Lopez and Kuhrt were the last two Stanford executives to be criminally tried for their roles in the scheme.
“Mr. Lopez’s 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-year term for the former accounting chief. “He knew the crucial thing -- massive misuse of victims’ money.”
The men were each found guilty of nine of 10 wire fraud counts and one count of conspiracy to commit wire fraud. They have been jailed in downtown Houston pending sentencing.
Neither man spoke at the hearing.
Lopez’s lawyer, Jack Zimmermann, asked for a sentence of three years in prison and two years’ home confinement, followed by three years’ supervised release. That would avoid a disparity between his client’s punishment and other defendants’, the attorney said.
The government’s recommendation of 25 years “overstates the gravity of conduct of Gil Lopez,” Zimmermann said. He said later that the verdict and sentence will be appealed.
Kuhrt’s defense lawyer Richard Kuniansky disputed prosecutors’ claim that Lopez and his client knew about the biggest piece of the fraud, 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 sentence of five years for Kuhrt. Other executives, he said, were “exponentially more involved” in the conspiracy than Kuhrt.
“Had he known what he knows now, he would’ve done a lot of things differently, and he’s lost a lot of sleep over it,” Kuniansky said.
Goldberg, the prosecutor, urged Hittner to reject what he called Lopez’s and Kuhrt’s “offensive claims that they were conned and just like the victims.”
“No corporate officer 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 orders,” he said.
In sentencing Lopez and Kuhrt, the judge said he deviated downward from the advisory federal guidelines sentence of, in effect, life behind bars to avoid unwarranted disparities with other executives and their “lesser culpability and gain from this fraud” compared with others’.
He calculated the sentences for both men after determining they lied during his trial testimony, as the government claimed, the judge said.
Besides the prison term, Lopez’s punishment includes a $25,000 fine.
The judge said he rejected a defense claim that Kuhrt “didn’t receive a dime other than his salary and bonuses” from the fraud.
Hittner added three years of supervised release to Kuhrt’s 20-year sentence. Waiving the fine, the judge said Kuhrt is indigent and he’ll appoint a public defender to handle his appeal.
Their lawyers asked that they be assigned to prisons near their homes in Houston.
Stanford, 62, was convicted in March of masterminding the fraud and stealing more than $2 billion of investor funds to finance a lavish lifestyle of private jets, yachts and waterfront mansions along with his money-losing side enterprises. He is serving a 110-year sentence in a Florida federal prison and has appealed his conviction and sentence.
Lawyers for Lopez and Kuhrt urged jurors to acquit the men, claiming they were duped by Stanford and his top deputy, finance chief James M. Davis, into creating the false financial statements investors relied on.
Davis, 64, cooperated with prosecutors and reached a plea deal in 2009 in which he said Stanford’s operation was a fraud from the start. Davis was sentenced last month to five years in prison based on his cooperation and ability to lead government agents to secret bank accounts and evidence used to convict Stanford.
Another senior Stanford executive, former Chief Investment Officer Laura Pendergest Holt, pleaded guilty in June to obstructing an investigation by the U.S. Securities and Exchange Commission. She was sentenced to three years in prison.
The case is U.S. v Lopez, 4:09-cr-0342, U.S. District Court, Southern District of Texas (Houston).
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