Stanford Attorney Bennett Removed as Trial Lawyer

R. Allen Stanford’s attorney Robert S. Bennett was removed from his criminal-defense trial team by a federal judge after the indicted financier was declared unable to pay him or any private lawyer.

U.S. District Judge David Hittner in Houston, who will preside over Stanford’s criminal trial, today relieved Bennett of his trial duties.

“Mr. Stanford has filed an affidavit of indigency, so we now have to appoint counsel at government expense,” Hittner said.

He rejected three lawyers proffered by Stanford and appointed two who will be paid $125 an hour by taxpayers. Bennett charged Stanford as much as $1,000 an hour, according to court records. He withdrew a request today to act as court- appointed counsel at the public rate.

Stanford, 60, is accused of leading a $7 billion investment fraud scheme centered on the sale of certificates of deposit by his Antigua-based Stanford International Bank Ltd. He maintains he is innocent.

The principal of the Houston-based Stanford Financial Group Co. and related companies, the financier is also a defendant in a civil suit filed in February 2009 by the U.S. Securities and Exchange Commission.

Stanford’s assets were frozen by court order in that case, and on Oct. 13 he lost a bid to access more than $100 million in directors’ and officers’ insurance coverage procured by his businesses.

Photographer: F. Carter Smith/Bloomberg

Robert S. Bennett, former lead attorney representing financier R. Allen Stanford. Close

Robert S. Bennett, former lead attorney representing financier R. Allen Stanford.

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Photographer: F. Carter Smith/Bloomberg

Robert S. Bennett, former lead attorney representing financier R. Allen Stanford.

No Contact

Hittner told Bennett he must remain on the defense team to transfer trial materials. The lawyer and his staff are barred from having any further contact with Stanford.

The judge turned down Stanford’s request to appoint three lawyers including former federal prosecutor Christopher Bebel, who testified in the insurance coverage trial, and Michael Stanley, who represents some of the Stanford Group financial advisers in the SEC case.

“Indigent defendants do not have the right to select their own attorneys,” Hittner said. The judge didn’t postpone the financier’s trial scheduled for Jan. 24.

The new attorneys, Robert A. Scardino and Ali R. Fazel, told him they will be ready.

Three former colleagues accused of participating in the fraud scheme will be tried together after Stanford’s trial.

Stanford was in court today with the attorneys he had chosen. Bennett sat at a separate table while the lawyers Hittner appointed sat behind them in the gallery.

String of Lawyers

The financier in the last 18 months has had a succession of Houston criminal-defense attorneys who include Dick DeGuerin, Kent Schaffer, Bennett and, briefly, Michael Sokolow of the Federal Public Defender’s office.

Lloyd’s of London attorneys said in court filings that insurers paid more than $8.2 million to various Stanford lawyers before winning the right to stop paying them in the lawsuit decided earlier this month.

The criminal case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston). The civil case is U.S. Securities and Exchange Commission v. Stanford International Bank Ltd., 09-cv-298, U.S. District Court, Northern District of Texas (Dallas). The insurance case is Pendergest-Holt v. Certain Underwriters at Lloyd’s of London, 09-cv-3712, U.S. District Court, Southern District of Texas (Houston).

To contact the reporters on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com; Andrew M. Harris in Chicago at aharris16@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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