R. Allen Stanford, right rear, exits the Bob Casey Federal Courthouse in Houston, Texas, U.S., on Tuesday, Dec. 20, 2011. Mr. Stanford's CIO Laura Pendergest-Holt is expected to receive a three-year sentence for her role in the Ponzi scheme.Craig Hartley/Bloomberg
Laura Pendergest-Holt, a former executive in convicted swindler Allen Stanford's investment firm, has agreed to plead guilty and will receive a three-year prison sentence for her role in a $7-billion fraud, a source familiar with the case said on Tuesday.
Earlier this month, Mr. Stanford was sentenced to 110 years in prison for running a Ponzi scheme in which he stole money from investors around the world that helped to finance an extravagant lifestyle.
Ms. Pendergest-Holt, who was the firm's chief investment officer, will plead guilty to a single obstruction of justice charge on Thursday in federal court in Houston, said the source, who asked not to be identified due to a gag order that covers the case.
A spokeswoman for the U.S. Department of Justice declined to comment. Ms. Pendergest-Holt's lawyer, Dan Cogdell, was not immediately available for a comment.
Ms. Pendergest-Holt was indicted in May 2009 on obstruction of justice and conspiracy charges, alleging she gave false testimony about the nature of the firm's investments to the U.S. Securities & Exchange Commission, which was investigating the fraud.
Ms. Pendergest-Holt had a love affair with the government's main witness and Mr. Stanford's top aide, former chief financial officer James Davis. The pair met in a bible study class in Mississippi that was led by Mr. Davis and his wife.
Mr. Davis later hired Ms. Pendergest-Holt, and admitted in court that he had an affair with Ms. Pendergest-Holt that lasted two years.
In testimony in Mr. Stanford's six-week criminal trial, Mr. Davis said Mr. Stanford approved of the extramarital relationship because it would keep Ms. Pendergest-Holt "loyal."
Ms. Pendergest-Holt as well as former Stanford accounting executives Mark Kuhrt and Gil Lopez are due to go on trial in September.
Mr. Davis pleaded guilty to charges of fraud conspiracy and obstruction in 2009. He faces a maximum penalty of 30 years.
Mr. Kuhrt and Mr. Lopez have pleaded not guilty.