Bloomberg News

Allen Stanford Loses Bid to Delay His Fraud Trial in January

January 04, 2012

Dec. 29 (Bloomberg) -- R. Allen Stanford lost his bid for more time to prepare to face charges he led a $7 billion investment fraud scheme. Jury selection will begin in Houston federal court on Jan. 23.

“This case needs to be tried,” U.S. District Judge David Hittner said in an eight-page ruling yesterday. “This trial will decide not just whether Stanford is guilty of the criminal charges, but also whether hundreds of millions of dollars of investor funds currently frozen may be forfeited and returned to his alleged victims.”

Hittner ruled Dec. 22 that Stanford has sufficiently recovered from a head injury suffered in a jailhouse assault and an addiction to anxiety medications prescribed to him by prison doctors after the attack.

The judge delayed Stanford’s original trial date last January and ordered him into a prison rehabilitation program after finding Stanford’s medical conditions had made him incompetent to understand the proceedings or assist his defense team.     “Our ability to defend our client has been consistently limited by matters the court is well aware of,” Ali Fazel, Stanford’s lead lawyer, said in an e-mailed statement yesterday about the ruling. “We are now reviewing our options.”

Flight Risk

Stanford, 61, has been detained as a flight risk since his June 2009 indictment on charges he defrauded investors of more than $7 billion through allegedly bogus certificates of deposit at his Antiguan bank. The former financier has denied all wrongdoing.

Stanford’s attorneys had asked to delay the trial until late April to give them more time to review millions of pages of company documents with Stanford. They argued they’d had only a few days to review documents with Stanford while he was clear- headed. They said they needed to search beyond the limited set of papers the government has identified as critical to the case.

“The accused’s position is that this case is about the flow of money” through Antigua-based Stanford International Bank and more than 100 related Stanford companies scattered around the globe, Fazel said in a Dec. 27 court filing.

“Therefore, the defense in this case does not merely require knowledge of one company as the government contends, but rather, depends upon knowledge of the finances and operations” of all the companies, Fazel said in the filing.

Thousands of Investors

Prosecutors, who opposed a lengthy delay, said a four-to- six-week extension wasn’t unreasonable given the time Stanford’s lawyers had needed to devote to his recent competency hearing. They said further delay wasn’t fair to thousands of Stanford investors, whose recovery of funds from Stanford’s holdings is stalled until his criminal case is concluded.

Justice Department spokeswoman Laura Sweeney declined to comment on the ruling.

The government contends Stanford’s bank operated as a Ponzi scheme, in which early investors were paid above-market interest rates with funds taken from later investors.

Prosecutors claim Stanford siphoned off more than $1 billion to fund a lavish lifestyle of private jets, yachts, multiple mansions and a private Caribbean island.

The criminal case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09cv298, U.S. District Court, Northern District of Texas (Dallas).

--Editors: Mary Romano, Peter Blumberg

To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


Monsanto vs. GMO Haters
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus