HOUSTON/NEW YORK, (Reuters) – Allen Stanford, accused of masterminding a $7 billion Ponzi scheme, has lost a bid to get out of jail to work on a separate trial seeking to hold Lloyd’s of London responsible for his defence costs.
Stanford, who has been locked up for 14 months awaiting his criminal trial, sought to be freed into a U.S. marshal’s custody so he could be transported to his lawyer’s office to prepare for the Aug. 24 Lloyd’s trial.
The disgraced Texas financier argued he needed to spend as much as 12 hours a day, seven days a week working with his lawyer.
He also sought to delay the Lloyd’s trial to Oct. 25, complaining that his jail guards ruined most of his case files on Aug. 2. Stanford said they “maliciously dumped” his carefully organized documents into big trash bags on his bunk. But U.S. District Judge Nancy Atlas in Hous-ton, who is presiding over the insurance trial, rejected both requests.
She said the “unique circumstances” of the Lloyd’s case meant there should be no delay and that Stanford should direct complaints about his detention to U.S. District Judge David Hittner, who is handling his criminal case.
Stanford faces a 21-count indictment focused on what prosecutors say is his Stanford Financial Group’s fraudulent sale of certificates of deposit issued by his Antigua bank, Stanford International Bank. He also faces civil charges from the U.S. Securities and Exchange Commission.
Lloyd’s at first agreed to advance Stanford’s criminal and civil defence costs, but changed its mind, relying on a money-laundering policy exclusion, court records show.
Stanford is also appealing his third bail denial to the U.S. Fifth Circuit Court of Appeals, the same court that rejected his two prior bail requests. He argues his jailing has deprived him of his constitutional rights to due process and effective assistance of counsel.
In a court filing yesterday, Stanford’s lawyers renewed their concern about the detention’s effect on their 60-year-old client’s health and mental state, saying Stanford is taking psychotropic drugs twice a day that “leave him in a less than fully coherent state of mind.”
The criminal trial is scheduled to begin on Jan. 24, 2011.
Separately, U.S. District Judge David Godbey in Dallas has approved the appointment of a committee to represent Stanford victims, a spokeswoman for the clients said.
