R. Allen Stanford will face a federal jury alone on charges he swindled investors of more than $7 billion, and his alleged co-conspirators can be tried later, a judge ruled.
The Texas financier is in jail in Houston awaiting trial on 21 criminal charges he defrauded more than 20,000 investors through allegedly bogus certificates of deposit at Antigua-based Stanford International Bank Ltd.
U.S. District Judge David Hittner in Houston ruled yesterday that Stanford’s trial will go forward in January as previously set. In a three-paragraph order, Hittner granted a request by three former Stanford executives also charged in the scheme that they be tried separately from their former boss.
Laura Pendergest-Holt, the former chief investment officer of the Houston-based Stanford Financial Group of companies, “very much wanted to be tried on her own conduct,” her attorney, Dan Cogdell, said in a phone interview.
Pendergest-Holt made the request after Stanford repeatedly changed defense attorneys and engaged in conduct Cogdell described in a June 9 filing as “egregious and circus-like.” Stanford’s former accounting chief Gil Lopez and global controller Mark Kuhrt joined Pendergest-Holt’s request for a separate trial. In yesterday’s order, Hittner said the three colleagues will be tried together sometime after Stanford’s trial concludes.
‘Innocent as Charged’
“This decision by the court was expected, and we will welcome an opportunity to show that R. Allen Stanford is innocent as charged,” his lawyer, Robert Bennett of Houston, said in an e-mailed statement.
Bennett also said he was continuing to press for his client’s release from pretrial detention so that he can more readily assist in the preparation of his defense. Harvard University law professor Alan Dershowitz is aiding in the bid for release, which has been opposed by the U.S.
“This severance helps Laura in every way possible,” Cogdell said. With Stanford being tried first, the other defendants will have “free discovery, the opportunity to evaluate government witnesses and to be able to impeach them if their story changes. It’s a critical advantage,” he said.
Justice Department spokesman Alisa Finelli declined to comment on the judge’s ruling.
Parallel Fraud Claims
Stanford, his former colleagues and several Stanford companies face parallel civil fraud claims by the U.S. Securities and Exchange Commission. The regulators alleged in a February 2009 complaint that the Stanford executives misled investors about the safety and oversight of their investments, in a scheme that paid early investors with funds taken from later investors.
The criminal case against Stanford and the other defendants is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas).