The pride of Baldwyn, Mississippi, was in handcuffs Friday, making a "perp walk" in a black pantsuit, accompanied by an FBI agent.
Laura Pendergest-Holt, a 35-year-old wonder woman who dispensed financial advice on Memphis radio stations and earned a million dollars last year, earned the dubious distinction of being the first person charged criminally in the ballooning investigation of Stanford Financial Group.
Friday night, the Securities Exchange Commission upgraded its assessment of Stanford to "a massive Ponzi scheme," invoking the P-Word well after numerous media outlets and fleeced investors had already done so.
Pendergest-Holt was arraigned in court in Houston Friday. But her home is in Baldwyn and her office was in the Crescent Center in East Memphis, where she witnessed the SEC's fateful raid on February 17th.
People from Baldwyn who knew her were, needless to say, surprised when I visited with them last week.
"She was one of the smartest women to come out of this town," said Tammy Bullock, general manager of the Baldwyn News. Pendergest-Holt was a 1991 graduate of Baldwyn High School and a 1995 graduate of Mississippi University for Women, winning several honors at both schools, according to Bullock. "She is very success oriented, and has a pleasing personality."
Baldwyn Mayor Danny Horton called Pendergest-Holt "a fine young lady from a fine family." Horton also knows her mentor, Stanford's chief financial officer James M. Davis.
"Our sons went to high school together," Horton said. "I had no idea. I read it in the paper and heard it on the news. Surprised is a good word. Jim Davis had a deep love and passion for small municipalities and realized that their heart is the downtown area."
Davis invested in several buildings and small businesses on Baldwyn's two-block Main Street, giving the otherwise forlorn downtown a touch of Oxfords trendy square. Davis' wife operates a store called Patina Decor. A man who answered the door Thursday said no one in the family would have any comment.
Everybody in town is kind of shocked," Horton said. "Any news travels fast but most people, like me, didn't know about it. They probably would know more about the Friday night high school football games than about the dealings of Stanford."
Perhaps, although managers of the Farmers and Merchants Bank and Regions Bank in Baldwyn declined to be interviewed about whether they suspected anything about Davis, Pendergest-Holt, or Stanford's certificates of deposit that paid twice as much interest as their own products.
The FBI and the SEC say Pendergest-Holt is a liar whose gall verges on the "incredible," according to documents made public Friday. She lied, they allege, as recently as last week when asked about Stanford's financial structure. She is charged with obstructing an investigation and is likely to be treated harshly as her case advances. Memphians may remember former state senator Roscoe Dixon, who lied to the FBI in a "last-chance" interview, went to trial, lied again on the witness stand, and got a conviction and a five-year sentence in the Tennessee Waltz investigation.
The small-town-makes-good (for a while, anyway) story has overtones of a novel by Theodore Dreiser or Sinclair Lewis. Pendergest-Holt was a protegee of Davis, who is 60 years old, married, and the father of four sons. They met at First Baptist Church in Baldwyn several years ago. Davis, raised in the community of Dry Creek, subsequently left First Baptist and helped start a new church in another nearby hamlet called Guntown. The administrator at LifeWay Community Church in Guntown confirmed that Davis was "one of the founders" but would not be interviewed. Davis' wife Laurie still attends First Baptist, according to pastor Stanley Huddleston.
"We have resigned ourselves at the church not to make quick judgments and to wait until all the facts come out," Huddleston said -- a day before the feds version of the facts became to come out in Houston.
Bullock said several young people from Baldwyn went to work for Stanford but none rose as high in management as Pendergest-Holt. The FBI and SEC allege that Pendergest-Holt was unprepared for the job of overseeing a complicated financial firm and that the company lacked professional oversight that would have exposed the fraud.
Baldwyn is the home of Hancock Fabrics, a publicly-traded company that was a Memphis investment favorite a decade or so ago. It is about 15 miles north of Tupelo, where Stanford had an office in the recently developed property that used to be the fairgrounds. A Tupelo businessman said Stanford gained entry into the financial business in Tupelo by buying out a company called Executive Financial Planning.
For Tupelo, Stanford's fall is the second shock in less than a year. Last year Toyota announced that it is indefinitely delaying construction of its new assembly plant northwest of town.