Action News 5 Special Report: Let Us Prey - WMC Action News 5 - Memphis, Tennessee

Action News 5 Special Report: Let Us Prey

MEMPHIS, TN (WMC-TV) - R. Allen Stanford, James Davis, and Laura Pendergest-Holt, the top brass at Stanford Financial, are mired in an alleged multi-billion dollar investment scheme.

But did the head of the company and his Memphis executives use the power of prayer to prey on investors?

The SEC claims Stanford Financial executives ran a Ponzi scheme to defraud investors, and the complaints also show a close tie between the Bible and business.

When Stanford clients were making outrageous returns on their investments, it was heavenly.

"Three years went by and I pulled out almost $40,000 in interest," investor David Ellis said.

Now, Ellis and other investors wonder if Stanford executives were hiding behind a higher power to build trust.

"About 20 percent of my net worth is gone," he said.

From their offices in Memphis to their bank in Antigua, former Stanford employees say they were encouraged to use prayer to put nervous investors at ease.
"It was integrity. It was responsibility," said a former Memphis broker, who asked to remain anonymous. "God was first, you know, that was really what they preached."

The anonymous broker said he was particularly suspect of the openly religious James Davis, the Stanford CFO who was based at the Memphis office.

"He just really went over the top with it," the broker said. "You know he's just ultra religious. Anytime someone is over the top with anything, that's gonna throw up a red flag."

Davis' religious reputation can be traced back to his hometown of Baldwyn, Mississippi. He started the Lifeway Community Church in Guntown, just outside Baldwyn. It's also where Davis started his association with Laura Pendergest-Holt, whom he met at church and later brought on as Stanford's Chief Investment Officer.

"I would say that he was a very religious person, believed in God, (and) believed in serving mankind and humanity," Baldwin Mayor Danny Horton said.

Horton said Davis began buying and restoring buildings in the Baldwyn business district in 2004. "He was not looking to gain from it, he was just looking to do something good for the community."

And at the city planning meetings Davis attended, Horton says, "It was not uncommon to get hugs as a greeting, and to begin a meeting with prayer and to end a meeting with prayer."

Davis continued the practice during meetings at Stanford Financial. Court records show it wasn't uncommon to interrupt heated conversations with prayer. And reports by Bloomberg and other news outlets recount a Stanford training video depicting images of the cross and testimonials encouraging brokers to pray with investors.
"Money is a reflection of who we are as people, and particularly if you've been given the trust of someone's life earning, that is almost a sacred obligation," said Dr. Scott Morris, a Memphis minister.

But not everyone believes the bond between Stanford clients and the company was a sacred one.

"There's a verse in the bible that says you can't worship two masters - either money or God," said the anonymous broker. "And those guys would talk about those things and say they're not, but their actions are just the opposite of it."

If that is the case, Morris says, "I can't think of a worse way to use prayer."

R. Allen Stanford denies the fraud allegations and says he has the assets to back up his businesses.
The headline of an article in the Houston Chronicle quotes Stanford saying, "As God as my witness, there is no Ponzi scheme."

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