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Alleged swindler Allen Stanford will spend more than a year in custody after a U.S. judge Thursday set his criminal trial for January 2011.
“This criminal case is going to get under way and it is going to go on schedule,” U.S. District Judge David Hittner said at a court hearing.
The date was a compromise between Stanford’s attorneys, who said they wanted the trial to start in summer 2011 because they needed more time to prepare, and U.S. prosecutors, who pushed for a September 2010 date.
Stanford, 59, has been in custody since June 19 when the government charged him with 21 criminal charges related to a $7 billion Ponzi scheme centered on fraudulent certificates of deposit (CDs) issued by his offshore bank in Antigua.
The fallen Texas financier could face life in prison if convicted on all counts. In June, Stanford pleaded not guilty to the charges.
Stanford, wearing a green jump suit, looked haggard and thin when he appeared at the court. His face was scruffy with an unshaven beard. He is being held in a federal facility in downtown Houston and is not allowed visits from his family, said Kent Schaffer, his criminal defense attorney, after the hearing.
Bernard Madoff, now serving a 150-year prison sentence after pleading guilty to a $65 billion fraud, awaited trial under house arrest in a penthouse on Manhattan’s East Side.
But U.S. prosecutors convinced Hittner that Stanford was a flight risk because of his dual U.S./Antiguan citizenship and his global network of wealthy connections.
At the hearing that lasted four hours, lawyers for Stanford and the other defendants — former Stanford executives Laura Holt, Gilbert Lopez and Mark Kuhrt — in the criminal case sparred with attorneys for Lloyd’s of London over the payment of defense fees under a directors and officers policy.
In November, Lloyd’s said it was denying payment of defense costs after Aug. 27, the day Stanford’s former chief financial officer, James Davis, pleaded guilty to fraud.
Lloyd’s, which has so far advanced a total of $4.2 million in legal fees to Stanford defendants, declined to provide additional coverage because claims resulting from money laundering are excluded under the policy.
In response, Stanford and the other defendants sued Lloyd’s and have asked Hittner to compel the insurer to pay defense costs. Stanford attorney Kent Schaffer said the group’s entire criminal defense is expected to cost $20 million to $30 million .
Hittner is expected to rule on the matter in the coming weeks, but his decision will likely be appealed.
Stanford, who was estimated to be worth $2.2 billion by Forbes magazine in 2008, has had his assets frozen since February when the U.S. Securities and Exchange Commission filed civil fraud charges against him.
(Reporting by Anna Driver and Kristen Hays; Editing by Richard Chang, Phil Berlowitz)