Stanford's Fraud Trial Delayed While He Gets Treatment for Drug Addiction
Stanford Trial Delayed Indefinitely by U.S. Judge
F. Carter Smith/Bloomberg
Indicted financier R. Allen Stanford.
Indicted financier R. Allen Stanford. Photographer: F. Carter Smith/Bloomberg
Jan. 7 (Bloomberg) -- Texas financier R. Allen Stanford won’t go to trial on charges he led a $7 billion investment fraud until after he receives care for a prescription-drug addiction, a federal judge ruled. Bloomberg's Erik Schatzker reports in today's Movers & Shakers. (Source: Bloomberg)
Texas financier R. Allen Stanford won’t go to trial on charges he led a $7 billion investment fraud until after he receives care for a prescription-drug addiction, a federal judge ruled.
“Nothing can be done until the medical aspect is cleared up,” U.S. District Judge David Hittner in Houston told defense lawyers and federal prosecutors yesterday after an almost eight- hour hearing on Stanford’s mental competency.
Three psychiatrists, one working for the government and two working for the defense, testified that Stanford’s dependency on prescription anti-anxiety medication and the after-effects of a head injury he sustained in a jailhouse beating left him unfit for the trial scheduled to start Jan. 24.
Stanford, 60, is accused of leading a scheme centered on the sale of certificates of deposit by Antigua-based Stanford International Bank Ltd. Stanford, indicted on 21 criminal counts in June 2009, has denied wrongdoing.
While the doctors who testified agreed that Stanford needs hospitalization, lawyers disagree on where that treatment should be provided.
Defense lawyers told Hittner they want him placed in a private Houston-area facility where he would wear an electronic monitor around his ankle and be watched by guards paid for by his family.
Prosecutors said that treatment can be provided at a federal prison, preferably one in Houston.
Government Blamed
“It’s the government that caused this,” defense attorney Ali Fazel responded, noting Stanford’s head injury was sustained in prison, as was the overmedicating. “Why entrust them to now take care of him?”
Hittner set a Jan. 12 deadline for submission of each side’s detailed proposal. A new trial date won’t be set until Stanford is fit, the judge said.
Because of a court-imposed gag order, Stanford’s lawyers and prosecutors didn’t comment after the hearing.
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 said in a Jan. 3 court filing that a two-year delay was excessive.
Steven Rosenblatt, a psychiatrist who examined Stanford for the U.S., told the judge that the financier was prescribed a bigger than necessary dose of the anti-anxiety drug Klonopin, made by a U.S. unit of Basel, Switzerland’s Roche Holding AG. That dosage, temporarily reduced a month ago, is higher than what the doctors said is recommended for long-term use.
‘On Top of Things’
Stanford “seems to be quite on top of things, alert to what’s going on,” Rosenblatt said yesterday. “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.
Two defense witnesses, psychiatrists Victor Scarano and David Axelrad, told Hittner it is difficult to separate the effects of the drugs from the effects of the head injury.
“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.
The criminal case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank Ltd., 09-cv-00298, 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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