Allen Stanford Mental Fitness Hearing Scheduled for Dec. 20

By Andrew Harris and Laurel Brubaker Calkins

Nov. 29 (Bloomberg) — R. Allen Stanford, the Texas financier accused of leading a $7 billion investment fraud, faces a Dec. 20 hearing to determine whether he is mentally fit to stand trial next year.

Stanford, 61, returned to Houston earlier this month after a nearly nine-month stay at a U.S. Bureau of Prisons hospital at Butner, North Carolina. He was treated there for a dependency on anti-anxiety drugs given to him in prison and evaluated for the after-effects of a head injury sustained in a jailhouse assault.

Houston U.S. District Judge David Hittner today scheduled the competency hearing to determine if Stanford can assist in his defense. In a separate order, the judge said Stanford’s criminal trial would start with jury selection on Jan. 23.

The former chairman and chief executive officer of Houston- based Stanford Group Co. is accused of misleading investors about the nature and oversight of certificates of deposit issued by his Antigua-based Stanford International Bank Ltd.

Stanford, who maintains his innocence, has been in custody since June 2009, when he was indicted by a federal grand jury in Houston. The court has twice postponed previously scheduled trial dates.

Aiding Defense

Ali Fazel, one of his defense attorneys, today declined to comment on the hearing and trial dates, citing an earlier order from Hittner barring attorneys from discussing the case publicly.

Justice Department spokeswoman Laura Sweeney didn’t immediately respond to a request for comment on the trial date. She has previously declined to comment because of the gag order.

If he’s found unable to help his attorneys prepare his defense, Stanford could return to Butner for further treatment, said Eric Sussman, a former federal prosecutor now in private practice in Chicago, in an interview earlier this month.

If Hittner finds Stanford can’t sufficiently recover his faculties, the judge would be required to decide whether the financier must be committed to a long-term care facility, said Sussman, now a partner in the Chicago office of New York-based Kaye Scholer LLP.

For Stanford to be permanently institutionalized, “he’d have to be deemed a danger to himself or others,” said Sussman, who isn’t involved in the case. “To the extent the judge finds he can’t be restored to competency, they may have to drop the charges,” he said.


Houston attorney Wendell Odom, who convinced a jury that Andrea Yates was insane when she drowned her children, said if the government’s doctors have found Stanford fit for trial, it will be difficult for the defense to prove otherwise. Stanford will have an even tougher time proving he’s so permanently incapacitated that he can never be tried, Odom said.

“Mental competency is an incredibly low standard, not the same as insanity,” said Odom, a former federal prosecutor. “It basically means you are cognizant of what’s going on and you can talk to your attorney.”

The case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston).


Stanford Still Not Competent for Ponzi Trial – Lawyer

Source: Scott Cohn (CNBC)

Despite nine months of court-ordered drug treatment, accused Ponzi schemer Allen Stanford is not yet competent to face charges he ran a $7 billion Ponzi scheme, his attorney told CNBC.

As a result, thousands of Stanford investors remain in limbo, nearly three years after the alleged scheme was exposed.

Stanford, who was released from a prison medical center earlier this month but remains in federal custody, was scheduled to be arraigned today on revised charges filed in May. But defense attorney Ali Fazel said in an e-mail that Stanford cannot be arraigned “until his competency status changes.”

As a result, today’s arraignment has been postponed.

In January, U.S. District Judge David Hittner ruled Stanford incompetent to stand trial after the 61-year-old financier became addicted to prescription drugs while in federal custody. Doctors testified that Stanford may also have suffered brain damage after being severely beaten by another inmate in 2009. Hittner ordered Stanford to undergo drug treatment at the Bureau of Prisons medical center in Butner, NC. With the treatment apparently completed earlier this month, Stanford was moved back to a federal detention in Houston. Because Hittner ruled he is a flight risk, Stanford is being held without bail pending his trial.

When that trial will take place remains uncertain. It is currently scheduled to begin January 20 according to a source close to the case, but questions about Stanford’s competency would appear to make that date increasingly unlikely.

Specifics of Stanford’s condition are difficult to come by in a case that is shrouded in an unusual amount of secrecy.

Earlier this month, a civil attorney for Stanford, Stephen Cochell, said in a court filing that his client “continues to suffer from short-term and long-term memory loss.” That filing — despite being in a different court and a separate case — drew an angry rebuke from Hittner, who barred Cochell from further contact with his client in the civil case until after the criminal case is complete.

Attorneys in the criminal case are barred from discussing Stanford’s condition under a broad gag order imposed by Hittner, who has also sealed much of the court docket since Stanford’s medical problems came to light.

As a result, more than 28,000 investors remain in the dark. A court-appointed receiver attempting to recover assets has said much of that effort depends on the outcome of Stanford’s criminal trial, since the vast majority of the funds are in foreign accounts that are inaccessible without a resolution in the case.

So far, investors have recovered just pennies on the dollar.

Westgate victims still waiting payment a year after Ponzi Schemer went to Prison

Some of you may find this interesting. Just to give you all an idea of how long we may have to wait for any pay-out – once payments have been agreed and once Janvey has got his act together. Read this article and you will see why I am pushing for Grant Thornton to get access to the funds in Canada, Switzerland and the UK. If GT handle this, we will have direct access to them and can push for a speedy pay-out. That aside, we have Richard and 6 other victims on the committee who will make sure that any payment is swift and fair. If the money falls into the hands of Janvey and the committee we will be waiting forever to see a penny of it.

Westgate victims still waiting payment a year
after Ponzi schemer went to prison

A year ago today, a federal judge sent James Nicholson away to prison for 40 years for running a $140 million Ponzi scheme. Attorneys and forensic accountants who helped recover investors’ money have been paid, but the investors who entrusted their money to the former Saddle River hedge fund manager have yet to get back a penny.

Why the holdup? The federal government refuses to say. “You can’t get an answer,” said Jon Prusmack, a Rockland County businessman who along with his wife lost $13.2 million in the fraud, the second-largest amount lost of Westgate’s nearly 400 investors. He’s among the investors who have been prodding government officials for answers. “We get a lot of
smokescreen,” he said. Nicholson’s victims continue to complain of vague, noncommittal answers from the U.S. Attorney’s Office in Manhattan, while estimated payment dates keep getting pushed back without explanation.
The U.S. Attorney’s Office had previously told The Record it is “committed” to ensuring victims to what they’re “entitled to” but did not say when the funds would be distributed. The clerk of court for the U.S. District Court, Southern District of New York, in Manhattan, which the U.S. Attorney’s Office said would distribute the funds, would not respond to multiple requests over the phone and in writing. The clerk, Ruby Krajick, didn’t respond to requests through a spokeswoman or a requested written inquiry. A call to U.S. District Judge Richard Sullivan, who sentenced Nicholson, went unreturned. Since July, six payments of Westgate investors’ money — totalling $19.6 million — have trickled into
Sullivan’s court, where Nicholson was prosecuted, pleaded guilty and was sentenced. That money could be earning interest in investors’ bank accounts, or paying for living expenses, retirement or college

In Prusmack’s case, the roughly $2 million he expects to get back from his Westgate losses could fund operations of two of his health and wellness, and sports and entertainment, businesses. “Rather than go borrow money, I’d rather use this,” he said. Prusmack isn’t facing the financial hardship experienced by other Westgate investors who have been struggling to make ends meet. “I just feel sorry for the other people,” he said.

Howard Hellman, a Rockland County businessman who invested in Westgate after meeting an employee of the fund at the Church of the Presentation in Upper Saddle River, would like the government to return
his money, too. “As one of the investors, it’s almost like a double whammy,” Hellman said. “I do understand there’s a process, but it’s frustrating that the process is taking as long as it’s taking.” Victims of other recent Ponzi schemes have also had lengthy waits to get back their money.

A bankruptcy trustee in Bernard Madoff’s case just sent out the first checks with investors’ recovered funds earlier this month. Madoff was sentenced to 150 years in prison in June 2009. Investors in Texas financier R. Allen Stanford’s alleged Ponzi scheme have yet to receive any
distributions of recovered funds, according to a trustee in that case. Stanford was indicted in June 2009
and his case continues.


Congressional Letter to SIPC Chairman Orlan Johnson

Below is a Congresional letter that has been sent to the SIPC Chairman Orlan Johnson.
I would advise ALL International victims to read this and take note that the letter speaks directly about “the victims in our States” and “the American people”, NO mention of International Victims!!

There is also a reference to Ralph Janvey as “an overzealous and careless court appointed receiver”.

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Stanford arraignment set for Nov 28th

Source: Tex Parte Blog
Judge David Hittner: Stephen Cochell, who represents R. Allen Stanford in civil suit, can’t have in-person access to his client until criminal case is completed.

Posted on November 18, 2011

Houston financier R. Allen Stanford is back in Texas and back at the Federal Detention Center in Houston, according to Federal Bureau of Prisons records. But proximity doesn’t do much good for Stephen Cochell, an attorney in Houston who represents Stanford in a civil suit, Securities and Exchange Commission v. Stanford International Bank Ltd, et al., which is pending in the U.S. District Court for the Northern District of Texas.

On Nov. 17, Senior U.S. District Judge David Hittner of the Southern District of Texas, who is presiding over Stanford’s criminal case, signed an order precluding Cochell from “in-person access” to Stanford at the FDC in Houston until Stanford’s criminal case is “completed.” Hittner wrote that it has come to his attention that Cochell issued a public statement concerning Stanford’s “current mental status” that could “directly impact the on-going criminal prosecution and impending jury trial” against Stanford in his court.

Hittner wrote that Cochell, in the statement, said Stanford “continues to suffer from short-term and long-term memory loss” and should remain at the federal medical facility in Butner, N.C., through the end of January 2012. Stanford recently returned to Houston after undergoing treatment in Butner for a dependency on prescription drugs. Cochell, of the Cochell Law Firm, declines comment. Stanford’s criminal-defense attorneys, Robert Scardino and Ali Fazel, partners in Scardino & Fazel in Houston, did not immediately return a telephone message left at their office.

Stanford’s criminal trial was set for January, but Hittner delayed it after finding Stanford was mentally incompetent to stand trial. On May 4, the government filed a superseding indictment against Stanford, and his arraignment is set for Nov. 28 before U.S. Magistrate Judge Mary Milloy of the Southern District of Texas.

Stanford pleaded not guilty to the charges in his original indictment of June 2009. He faces a total of 14 counts: one count of conspiracy to commit wire fraud and mail fraud; five counts of wire fraud; five counts of mail fraud; one count of conspiracy to obstruct an SEC investigation; one count of obstruction of an SEC investigation; and one count of conspiracy to commit money laundering.