Allen Stanford Suicidal, Unfit for Trial: Doctor

R. Allen Stanford is suicidal and may never recover sufficiently from a jailhouse beating to stand trial next month on charges he ran a $7 billion Ponzi scheme, a doctor who examined him for the defense testified.

Defense lawyers and U.S. prosecutors argued for the second day in federal court in Houston over Stanford’s mental fitness. Stanford, 61, says he can’t remember family vacations, business dealings or romantic encounters with women because of the attack and because of anxiety drugs. The U.S. says he’s faking it.

Dr. Ralph Lilly, a neurologist, testified today that Stanford sustained “a major injury that required major surgery’’ in the 2009 inmate assault. Stanford is delusional and believes the government is out to destroy him, Lilly said. The doctor said he couldn’t predict when Stanford might be ready for trial.

“He’s at risk for suicide,” Lilly told U.S. District Judge David Hittner, citing an examination of Stanford this month. “His memory is like a crossword puzzle that’s fallen to the ground and doesn’t come together anymore.”

Lilly told the judge he didn’t know when or whether Stanford would be able to go on trial.

“I can’t say in the next month or ever,’’ he said.

Further Treatment

Photographer: F. Carter Smith/Bloomberg

Indicted financier R. Allen Stanford, accused of leading a $7 billion investment fraud scheme, arrives for a hearing at the Bob Casey Federal Courthouse in Houston on Jan. 6, 2011. Close

Indicted financier R. Allen Stanford, accused of leading a $7 billion investment fraud... Read More

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Photographer: F. Carter Smith/Bloomberg

Indicted financier R. Allen Stanford, accused of leading a $7 billion investment fraud scheme, arrives for a hearing at the Bob Casey Federal Courthouse in Houston on Jan. 6, 2011.

Depending on how Hittner rules, Stanford will undergo further treatment or face a trial Jan. 23 on charges of running a Ponzi scheme that cost investors more than $7 billion. If convicted, he could go to prison for the rest of his life.

Stanford has been imprisoned as a flight risk since his June 2009 indictment on charges of defrauding investors through a scheme built on allegedly bogus certificates of deposit at Antigua-based Stanford International Bank Ltd.

Stanford benefited from eight months of treatment in Butner, where he was successfully weaned from powerful anti- anxiety drugs prescribed after the assault, Lilly said. The lasting effects of the brain injury have left him depressed and occasionally hallucinatory, Lilly said.

“He’s delusional, paranoid and he feels the government has selected him to destroy him for whatever reason they may have,’’ Lilly testified. He said Stanford believes the U.S. wants to “make money off his businesses’’ and has tortured him.

Prison Psychologist

Robert E. Cochrane, a psychologist at the Federal Bureau of Prisons’ medical center in Butner, North Carolina, testified yesterday that Stanford failed every test designed to expose fakers. His claim of complete retrograde amnesia, loss of the memory of things that happened before the event that caused it, is “remarkable” because the condition is so rare, Cochrane said.

Lilly said today that Stanford is “absolutely’’ not faking his condition and isn’t even aware of the extent to which his mental faculties are impaired.

“His symptoms are characteristic of someone with a brain injury,’’ Lilly said. “His prognosis is limited.’’

The case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston).

To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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