"I interpreted that to mean Mr. Stanford didn't have any money to cover this debt, nor did the companies have the money to pay it back, and the bank didn't have the money to pay it back," Henry Amadio, the accountant, told jurors today at Stanford's criminal fraud trial in federal court in Houston.

Stanford, 61, is accused of skimming more than $1 billion in investor funds from his Antigua-based Stanford International Bank Ltd. to fund a billionaire's lifestyle and private businesses ranging from Caribbean airlines to cricket tournaments. Stanford, who faces as long as 20 years in prison if convicted of the most serious charges, denies all wrongdoing.

Amadio, testifying for the government, told jurors he prepared monthly reports tracking the financier's personal loans from the Antiguan bank, which prosecutors claim was at the heart of an alleged $7 billion Ponzi scheme. The loans weren't disclosed to investors, he said.

Bank funds borrowed by Stanford flowed through several intermediary companies before they were used to cover operating losses and startup expenses at the financier's affiliated companies, Amadio testified. He said Stanford Financial Group Chief Financial Officer James Davis instructed him to record these loans as capital infusions into the companies rather than as loans from Allen Stanford.

‘No Other Option'

"There is not going to be repayment; there is no other option," Amadio said, reading to jurors from an e-mail he received from Davis in 2007. In the e-mail, Davis said the accounting treatment was directed by Stanford, the bank's sole shareholder.

Amadio said he worried that investors' savings were being secretly diverted to cover losses at Stanford's other companies.

"The combined profits of the bank were not enough" to provide Stanford sufficient legitimate profits to lend more than $2 billion to his other businesses, Amadio testified. "The only other conclusion was the money was coming from depositors' accounts."

Amadio told jurors he was ordered to strip all bank records, including his reports tracking Stanford's loans, from computers at Stanford's Houston headquarters and move them to a portable hard drive in 2006, after U.S. securities regulators began investigating the bank.

Regulatory Probe

He said he wasn't told at the time about the regulatory probe, only that the bank's records must be kept in Antigua. He said he carried the external hard drive containing the records around the Houston offices in his computer bag, leading co- workers to nickname the device "the football," after the portable controller containing nuclear launch codes that's carried at all times by aides to the U.S. president.

Amadio testified that he took the external hard drive home with him when a court-appointed receiver seized the offices on Feb. 17, 2009, and ordered employees to leave all computers in the building. After recovering family photos and personal files from the drive, he brought it back the next day and eventually gave it to federal agents, who were looking for "the football."

Amadio said that after intense questioning by federal agents that day in the Stanford offices, he became so nervous that he fainted for several minutes. He said he's still nervous as he's testifying under an agreement with the government, in which prosecutors can still criminally charge him if he doesn't testify truthfully or changes his story on the witness stand.

‘Charge You?'

"The government can still to this day charge you?" Assistant U.S. Attorney Gregg Costa asked. Amadio replied, "There is no promise; there is a risk."

Robert Scardino, one of Stanford's attorneys, asked the accountant if he'd committed any crimes while working for the financier.

"My intention was never to commit any crimes," Amadio said. "I'm not proud of myself for not making the right decision and leaving the company. I regret looking the other way."

Stanford Financial's global controller Mark Kuhrt, Amadio's former supervisor, was in court today during several hours of Amadio's testimony. Kuhrt was indicted with Stanford and is scheduled to be tried on charges related to his role in the alleged scheme after Stanford's trial concludes.

The criminal case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09-cv-298, U.S. District Court, Northern District of Texas (Dallas).