Published: Wednesday, 14 Oct 2009 | 6:24 PM ET

Text Size

Accused fraudster Allen Stanford, who has been in federal custody for nearly four months, is in deteriorating physical health according to his attorney, who says he will again try to get him freed on bail.

AP Allen Stanford prior to his imprisonment.

At the same time, attorneys for Stanford and his co-defendants are pushing to delay a trial until sometime in 2011, over the objections of prosecutors, who want to try the case next fall.

On Wednesday, U.S. District Judge David Hittner agreed to wait another 60 days to set a trial date, so defense attorneys can begin to review millions of pages of evidence compiled by the government.

Stanford and four co-defendants face multiple criminal charges in an alleged $7 billion Ponzi scheme involving certificates of deposit issued by Stanford's offshore bank in Antigua. Stanford is being held without bail after Hittner ruled he is a flight risk.

Stanford, making his first court appearance since a jailhouse fight last month that left him with a broken nose—Judge David Hittner at one point pausing the proceedings to ask if Stanford was OK.

Stanford appeared to be spitting blood into a tissue as the hearing progressed. His attorney says Stanford was still recovering from surgery on his eye socket following the September 24 fight that landed Stanford in a hospital for a night.

• Slideshow: A Rogues Gallery of Financial Crime

It was Stanford's second hospital stay since he was taken into custody June 18. In August, he suffered an irregular heartbeat on the eve of a scheduled court appearance. He was rushed to a local hospital and had surgery on a blocked artery in his leg.

The six-foot-four Stanford is noticeably thinner than he was before his arrest in June. His previously brown hair is now almost completely gray.

Stanford's new lead attorney, Kent Schaffer, said his client has been kept in solitary confinement since being moved to a federal lockup in downtown Houston earlier this month.

"He is being held in worse conditions now than he would be if he was convicted," Schaffer told CNBC. Stanford, who once claimed a net worth of $2.2 billion and was listed as Forbes' 205th richest American in 2008, is allowed no contact with outsiders other than his attorneys. He gets a daily exercise period on the roof of the high-rise detention facility, and is kept in shackles while in his cell.

"This is clearly harassment on the part of the government," Schaffer said.

Nonetheless, Stanford could remain behind bars for at least another year unless his attorneys can get him freed on bail, and Schaffer told CNBC he will attempt to revisit that issue soon.

Assistant United States Attorney Gregg Costa said the government had compiled some 4 million documents in the case, which has been slowed by questions about who would represent Stanford and how his attorneys would be paid.

Stanford's current attorney, Kent Schaffer, has been on the case only about a month, and argued he was at a disadvantage compared with prosecutors, who had been investigating Stanford for more than a year. Schaffer, who was initially appointed by the court to represent Stanford, will now be paid with proceeds of a Lloyd's of London insurance policy after the judge in the Securities and Exchange Commission suit against Stanford agreed last week not to block the payments.

Stanford is charged along with his former Chief Investment Officer Laura Pendergest-Holt, accounting executives Gilbert Lopez and Mark Kurht, and former Antiguan financial services regulator Leroy King. King, who allegedly accepted hundreds of thousands of dollars in bribes to cover up the fraud, is under house arrest in Antigua pending his extradition to the United States.

Print

Email

Text Size