Stanford Gets Champagne Defense on Beer Budget as Public Pays

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R. Allen Stanford, the Texas financier accused of leading a $7 billion fraud, will be defended by some of Houston’s most talented lawyers at taxpayer expense.

U.S. District Judge David Hittner in Houston assigned Stanford’s case to the local Federal Public Defender on Sept. 15, after finding Stanford had no money for lawyers. Two days later, the judge approved the addition of private practitioner Kent Schaffer, whose clients have included a congressman, a rap entrepreneur, professional athletes and a Hollywood star.

“Stanford is the luckiest guy in the criminal justice system,” said Brian Wice, a Houston lawyer who has tried cases with Schaffer. “Getting Schaffer through the public defender’s office is a great stroke of luck. Stanford’s hit the Powerball.”

Stanford was ranked the 205th richest person in the U.S. last year by Forbes magazine, with an estimated net worth of $2.2 billion.

His assets were frozen by court order in February after the U.S. Securities and Exchange Commission sued him and two business associates. The SEC accused them of issuing $7 billion in certificates of deposit through Antigua-based Stanford International Bank Ltd. while misleading investors about the nature and oversight of the securities.

In June, federal prosecutors indicted Stanford and four others on similar claims. Stanford, who denies all wrongdoing, is in a Texas jail awaiting trial on 21 felony charges that could keep him in prison for life, if convicted.

DeGuerin, Luskin

High-profile attorneys already have come and gone from Stanford’s case. Houston criminal defense lawyer Dick DeGuerin split with the financier in July after failing to receive adequate assurance he would be paid for a defense he said could cost more than $20 million.

Attorney Robert Luskin, a partner in Washington’s Patton Boggs LLP, asked the court’s permission last month to serve as Stanford’s lawyer for the limited purpose of helping him gain access to defense funds. Hittner refused and assigned Stanford to the public defender’s office to keep the case moving toward trial.

With the government pay rate of $110 an hour reflecting a steep discount from Schaffer’s standard $600 hourly fee, his addition to the defense team gives the financier essentially a champagne defense on a beer budget.

‘Intellectually Stimulating’

Schaffer said he took the case because he thinks it will be “intellectually stimulating, maybe a once-in-a-lifetime opportunity,” even if it doesn’t earn him a dime. The maximum- allowable government billing rate barely covers his firm’s overhead costs, which Schaffer said comes to $104 an hour.

“I’m not complaining because I agreed to do it for that rate, and I’ll work my ass off for him,” Schaffer said in an interview at his art and antique-filled office in downtown Houston’s JPMorganChase Building, a 1929 art deco jewel box. “I make enough on my other cases. I live pretty well.”

“Kent Schaffer is as good a lawyer as money can buy, and if you can get him for free, you’re doing great,” said Houston criminal-defense attorney Wendell Odom, who helped win Andrea Yates’s acquittal when she was retried for the drowning deaths of her five children. “But he’ll need some luck to overcome the bad publicity.”

Schaffer will join forces with investigators and forensic accountants provided by the Houston Federal Public Defender’s office, led by Marjorie A. Meyers and her top deputy, Michael Sokolow.

‘Lazy, Sloppy Lawyers’

“These are not your stereotypical overworked, underpaid, lazy, sloppy lawyers,” Schaffer said of his co-counsels at the public defender’s office. “They get acquittals at a higher percentage rate than retained lawyers do.”

Meyers declined to comment, saying in an e-mailed message that she and her staff are busy bringing themselves up to speed on the facts of Stanford’s case.

Meyers, who graduated with honors from Yale University and has a University of Pennsylvania law degree, worked in private practice before she landed her current post in 2004.

Sokolow, who has four degrees and a Harvard research fellowship, was named the nation’s best federal public defender in 2005. He has argued one case before the U.S. Supreme Court.

“The public defender’s office can’t devote many lawyers to the case, but it can devote resources,” which Stanford’s defense will require in abundance, Schaffer said. The Justice Department has about 4 million Stanford-related documents in its computerized database, he said, and “somebody has to look at all of them.”

“They’re going to have their hands full,” said JoAnne Musick, a former prosecutor in Harris County, Texas.

‘Quite Voluminous’

“These are the types of cases that are quite voluminous,” encompassing thousands of documents requiring review, including records of banking, finance and stock transactions, Musick said. “That can really consume an attorney’s time.”

While she described Meyers’s lawyers as “some of the finest we have in town,” the paper evidence is “going to be pretty overwhelming for them, just in sheer volume.”

Musick, who is president of the 600-member Harris County Criminal Lawyers Association, spent five years in a Houston- based state prosecutor’s office before opting for private practice in 2003. Kent Schaffer, she said, was an occasional opponent, though never in a trial.

“He knew his facts very well and put a lot of work into the details of his investigations, which is why a lot of his cases didn’t go to trial,” she said.

‘More With Less’

Attorney Patrick McCann, a former head of the Harris County Criminal Lawyers Association, said Houston’s federal public defenders “can do more with less than anybody but the coast guard.”

Still, Meyers, Sokolow and their charges will likely encounter some difficulties, starting with their client, he said.

“Mr. Stanford is probably used to being treated as one of one and having a great deal of resources at his command,” McCann said. “He is now one of several thousand people that the defenders represent, many of whom are facing life in prison for a variety of crimes.”

Meyers and her staff have the ability to petition the court for additional funding to pay for extraordinary expenses including the likely need to retain a certified fraud examiner and a travel budget that will allow them to interview potential witnesses on Antigua and elsewhere, McCann said.

“If that is done, I see no reason that they can’t do a great job for him,” McCann said.

18 Months

Schaffer said he is already diving into Stanford’s defense following a 90-minute initial conference with the financier on Sept. 15 at a holding cell in the Houston federal courthouse. He said it will take months to get familiar with Stanford’s case and as long as 18 months to get ready for trial.

Schaffer, 55, initially majored in drama at the University of Texas at Austin, after studying dance during high school under Patsy Swayze, mother of actor Patrick Swayze who died on Sept. 14. Schaffer earned his law degree from the University of Houston before joining the Houston law firm run by Richard “Racehorse” Haynes.

“I love to set traps and see the drama that unfolds,” Schaffer said. “Maybe it’s my background in drama, but I love the plot twists and turns and the characters who aren’t who they appear to be.”

Leather Cowboy Boots

The attorney favors custom-made suits and his standard footwear is black leather cowboy boots with his initials on them. He has carried the same limited-edition Mont Blanc fountain pen for 14 years and never forgets his battered lucky briefcase on important days in court.

A signed photo from longtime client Farrah Fawcett, the actress who died in June, graces Schaffer’s office credenza alongside another photo signed by Rap-A-Lot Records founder James Prince. Schaffer represented both performers in contract talks and has defended each against Web sites and others who used their names and likenesses without permission.

There are also photos of two other Schaffer clients: former Houston Astros baseball player Ken Caminiti, who went to jail after violating his probation on cocaine-possession charges, and former Louisiana Governor Edwin Edwards, who is serving a racketeering sentence. Schaffer also helped defend billionaire Houston oilman Oscar S. Wyatt Jr., who pleaded guilty to bribery in 2007 and served less than a year in prison for violating the United Nation’s Iraqi oil-for-food sanctions.

Wyatt, Washington

“Oscar served less time in jail than Martha Stewart did,” Odom said. “Kent did a very, very good job for him, because the Bush administration was really mad at Oscar Wyatt.”

This year, Schaffer negotiated probation for former Houston Congressman Craig Washington who avoided a trial over charges he fired a gun at two unarmed teenagers in a car.

Schaffer is a past president of both the Harris County and Texas criminal lawyers associations and was named one of the top 100 lawyers in Texas by the American Trial Lawyers Association in 2007. He is a frequent lecturer on his specialty, cross- examining government informants.

“Watching Kent cross-examine an informer is like watching Michael Jordan go to the hoop,” said Wice. “No one does it better.”

Dan Cogdell, the Houston lawyer representing Laura Pendergest-Holt, Stanford’s chief investment officer and co- defendant, said opponents shouldn’t fear only Schaffer’s mental abilities.

“He’s mean, tricky, clever and relentless,” Cogdell said of Schaffer’s courtroom style. “He doesn’t fight fair.”

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., 09cv00298, U.S. District Court, Northern District of Texas (Dallas).

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