A Dallas federal judge won’t release millions of dollars for R. Allen Stanford to pay his legal team unless Stanford can account for his assets and show that money he wants unfrozen isn’t tainted by the $7 billion fraud he is accused of running.
U.S. District Judge David Godbey, who presides over the Securities and Exchange Commission’s civil case against Stanford, said in an order this week he will “entertain” a modest request to pay lawyers and accountants to help “demonstrate the existence of personal assets unrelated to and untainted by the alleged fraud.”
More than two months ago, Stanford asked Godbey to order the court-appointed receiver in the case, Dallas lawyer Ralph Janvey, to place $10 million into an escrow account in the name of Houston criminal attorney Dick DeGuerin to cover attorney fees and legal costs. At the time, Stanford hadn’t been indicted on criminal charges. He was indicted June 18 on 21 counts, including conspiracy and fraud.
Janvey controls all of Stanford’s personal assets as well as U.S. assets related to his crumbled Stanford Financial Group empire.
Stanford also has sought to use proceeds from a company insurance policy to pay his legal team, to no avail.
“We have not received a penny yet,” DeGuerin said Thursday. He also pointed that out to senior U.S. District Judge David Hittner, who presides over the criminal cases in Houston, during a hearing earlier this week.
“I’ll remind the court that the lawyers haven’t been paid either,” DeGuerin said, after noting that the freeze left his client with “zero, zip, nothing.” Hittner said it was a serious concern that a defendant has no cash for a defense.
Janvey and his team of lawyers, accountants and others, also have yet to be paid. As receiver, he and his team would be paid out of funds recovered in the receivership estate. Janvey in May asked for $20 million for the first two months of work. Godbey has yet to rule.