R. Allen Stanford’s legal team changed again today. At a hearing this afternoon in Houston, U.S. District Judge David Hittner of the Southern District of Texas removed the federal public defender’s office from Stanford’s legal team and changed the designation of appointed counsel Kent A. Schaffer to retained counsel. In September, after determining that Stanford, chairman of Stanford Financial Group, had no ready access to money to pay for lawyers, Hittner appointed the federal public defender’s office and Schaffer to defend Stanford against criminal charges related to an alleged conspiracy to defraud investors.
But a ruling on Oct. 9 by a federal judge in Dallas paves the way for Stanford and other defendants in United States of America v. Robert Allen Stanford to receive some insurance funds to pay for their legal defense. U.S. District Judge David Godbey of the Northern District of Texas ruled that he will not bar Lloyd’s of London from disbursing proceeds from three policies to fund directors’ and officers’ defense costs under terms of the policies. “The Court does not, however, hold that any defendant is entitled to have its defense costs paid by D&O proceeds.
Lloyd’s reminds the Court that Lloyd’s may ultimately deny coverage for even the individual directors’ and officers claims as barred by various policy exclusions,” wrote Godbey, who is presiding in U.S. Securities and Exchange Commission v. Stanford International Bank Ltd., et al. When granting Schaffer’s request to become retained counsel for Stanford, Hittner reminded Schaffer that his appearance is “unconditional” and does not depend on the availability of insurance funds. While Stanford may have Schaffer, of Bires & Schaffer, as a retained lawyer for his criminal defense, he doesn’t know when his case will go to trial. Federal prosecutors asked Hittner to set a date for the trial, but the judge said he will do that at the next status hearing in December.
Schaffer and lawyers representing other defendants in the case told Hittner it’s too early to know when they can be ready for trial. Stanford, who is in federal custody pending trial and wore a green jumpsuit for the hearing, appeared to become ill at the counsel table during the hearing, but he assured Schaffer that he was well enough to stay in the courtroom. Stanford, three other SFG executives, and a former bank regulator in Antigua were indicted in June on fraud and obstruction charges in connection with an alleged conspiracy to defraud investors who bought about $7 billion in certificates of deposit sold through the Stanford International Bank Ltd. All pleaded not guilty to the charges in June, except for Leroy King, the Antiguan bank regulator who is currently under house arrest in Antigua and has not made a court appearance in Texas.