Stanford Isn't Competent to Stand Trial in Investment Fraud, Doctors Say
R. Allen Stanford, the financier accused of leading a $7 billion investment fraud scheme, is too addled to meaningfully assist in his defense or stand trial on Jan. 24, three psychiatrists testified.
Dr. Victor Scarano told U.S. District Judge David Hittner in Houston today that Stanford has a “major depressive disorder,” is hooked on an anti-anxiety drug and sustained a brain injury in a jailhouse beating.
“He is not able to work effectively, rationally, with his attorneys to develop a defense against the charges,” Scarano said. A doctor who examined Stanford for the U.S. told the court he thought the financier isn’t fit to be tried right now.
Stanford, 60, is accused of leading an investment fraud scheme centered on the sale of certificates of deposit by his Antigua-based Stanford International Bank Ltd. Indicted on 21 criminal counts in June 2009, he has denied the charges.
His defense team of Ali Fazel and Robert Scardino have asked to delay the trial for two years so they can review evidence and prepare. Appointed by Hittner in October, they’re Stanford’s fourth and fifth principal defense attorneys.
Prosecutors, in papers filed Jan. 3, said while they weren’t opposed to a postponement, a two-year delay is excessive. The U.S. also asked Hittner to resolve the competency issue before resetting the trial date.
Two Other Psychiatrists
Fazel today asked Scarano how he knows Stanford isn’t lying or faking his symptoms.
“If he fooled me, he fooled two other psychiatrists. This isn’t a case of malingering,” the doctor said. Scarano also said it’s difficult to separate the effects of the drugs, which include antidepressants, from those of the head injury.
Stanford must be weaned slowly from the medications, Scarano said.
“He needs to go to a medical hospital to start the withdrawal,” the physician said.
Assistant U.S. Attorney Gregg Costa challenged Scarano’s diagnoses, citing a lengthy argument Stanford made during a court hearing.
“This was off the top of his head,” the prosecutor said. “He did a better job of representing himself than some of his lawyers.”
Scarano replied that Stanford’s courtroom speech was evidence of mental upset.
“This is not a man sitting down with his attorneys, looking at millions of documents,” and devising a defense strategy, the doctor said. “This is a man getting up and complaining that nobody is treating him right.”
‘Gibberish’ E-mail
Costa showed an e-mail Stanford wrote from prison on Dec. 27 that the prosecutor said was “gibberish.” He asked Scarano if Stanford was “trying to game the system” by writing jumbled messages during the time the government was examining his mental state, while earlier e-mails were cogent and showed Stanford to be aware of current events.
Scarano said he doesn’t think Stanford is faking just to try to get out of jail for treatment in a hospital.
“He doesn’t like being here and going through this competency hearing,” Scarano said. “He wants to go to trial.”
Steven Rosenblatt, a psychiatrist who examined Stanford for the U.S., told the court the financier was prescribed a greater than necessary dose of the anti-anxiety drug Klonopin, made by a U.S. unit of Basel, Switzerland’s Roche Holding AG. That dosage, cut back about a month ago, remains higher than what the doctors said is recommended for long-term use.
‘Doing Better’
Stanford “seems to be quite on top of things, alert to what’s going on,” Rosenblatt said of the financier’s demeanor today in response to a question from Costa. “He does appear to be doing better today than he was then.”
Rosenblatt said Stanford needed from two weeks to a month in a hospital to begin detoxifying from the drug and another month or two of medically supervised rehabilitation in prison to complete his withdrawal.
David Axelrad, a neuro-psychiatrist who examined Stanford at his lawyers’ behest, testified that eliminating the drug problem won’t necessary cure all of Stanford’s maladies.
“Even after withdrawal from the medications, they could still find he has significant neurological deficits” from the brain injury, Axelrad said. “He’s not competent to stand trial at this time.”
Stanford’s assets were frozen by a February 2009 court order after he and his businesses were sued by the U.S. Securities and Exchange Commission.
Before Hittner appointed Fazel and Scardino, the financier fired Houston criminal defense lawyers Dick DeGuerin and Kent Schaffer following disagreements over payments and strategy.
Denied Insurance Proceeds
After briefly being represented by the Houston federal public defender’s office, he retained local attorney Robert S. Bennett, who was discharged from the case after a court stripped Stanford of access to insurance proceeds that he was relying on to fund his defense.
The criminal case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank Ltd., 09cv298, U.S. District Court, Northern District of Texas Dallas).
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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