Allen Stanford pleads not guilty in fraud case

HOUSTON, (Reuters) – Texas financier Allen Stanford  will spend another night in a Texas jail after he pleaded not  guilty yesterday to 21 criminal charges that he ran a $7  billion Ponzi scheme.

Texas billionaire Allen Stanford arrives at the Federal courthouse in Houston, in the custody of US marshalls, June 25, 2009.
Texas billionaire Allen Stanford arrives at the Federal courthouse in Houston, in the custody of US marshalls, June 25, 2009.

U.S. Magistrate Judge Frances Stacy set Stanford’s bond at  $500,000 with a $100,000 cash deposit. But Judge Stacy stayed  her order until 4:30 p.m. CDT today (2130 GMT) after the  U.S. Justice Department said it plans to appeal, arguing that  Stanford was likely to flee the country rather than face life  in prison if convicted of the charges.

The once high-flying billionaire and sports promoter has  been in federal custody since June 18, when he surrendered to  the FBI in Virginia after a Houston grand jury indicted him on  21 counts of conspiracy, fraud and obstruction of justice.

“Not guilty, Your Honor,” said Stanford, 59, wearing an  orange jump-suit and with his hands manacled in front of him.

Stanford is the second high-profile fraud case to shake  public confidence in Wall Street and the U.S. financial  regulatory system, after veteran financier Bernard Madoff  pleaded guilty to a massive Ponzi scheme that could have cost  investors as much as $65 billion.

Stanford, who once owned a fleet of 6 private aircraft, a  luxury yacht and houses and castles stretching from Houston to  the Caribbean, has spent a week in detention centers in  Virginia and recently in the Montgomery County Jail in Conroe,  about an hour’s drive north of Houston.

“The big fight is still ahead and I’m confident the world  will see Stanford didn’t defraud anybody,” Stanford’s criminal  attorney, Dick DeGuerin, told reporters outside the  courthouse.

Stanford is taking the anti-anxiety drug Ativan after  initially turning to alcohol to deal with the stress of the  case, DeGuerin said in a filing.

Professional golfer Vijay Singh had offered to cosign  Stanford’s bail bond but the court rejected the offer because  Singh is not a U.S. citizen, DeGuerin said.

Fijian Singh had an endorsement deal with Stanford and  sported a shirt and hat emblazoned with Stanford Financial  Group’s eagle insignia when he was competing in last week’s  U.S. Open at Bethpage Black in New York.

Dozens of Stanford’s family sat in the packed courtroom,  including James Stanford, his father, and Andrea Stoelker, his  girlfriend. “Hi Daddy,” his daughter said as Stanford entered  the court room after a lunch recess. Stanford winked at her.

According to the U.S. Securities and Exchange Commission,  Stanford, with the help of executives at his firm and a top  Antigua and Barbuda financial regulator, ran a “massive Ponzi  scheme” for over a decade that centered on certificates of  deposit in his bank in Antigua.

Stanford says he is innocent of the charges and that his  multinational business was legitimate until the SEC  “disemboweled” it by filing civil charges, which led to the  confiscation of all his assets by a court-appointed receiver.

U.S. District Judge David Hittner will decide today  whether the court should keep Stanford in custody, after  Justice Department attorneys argued that Stanford was a  “serious flight risk.”