UPDATE: Stanford attorneys appeal judge's no bond decision

HOUSTON — Texas financier R. Allen Stanford is not a flight risk and a federal judge’s decision to keep him jailed while awaiting trial on fraud charges should be reversed, his lawyers said in an appeal filed Monday.

Stanford’s attorneys on Monday asked the 5th U.S. Circuit Court of Appeals in New Orleans to overturn an order issued last month by U.S. District Judge David Hittner in Houston that revoked Stanford’s $500,000 bond. Stanford is being held at a privately run detention center north of the city.

Stanford and four executives of his now defunct Houston-based Stanford Financial Group are accused of orchestrating a massive pyramid scheme by advising clients to invest more than $7 billion in certificates of deposit from the Stanford International Bank in the Caribbean island of Antigua and then misusing the money, in part to pay for Stanford’s lavish lifestyle.

Hittner, in overturning a magistrate judge’s decision to allow Stanford to be free on bond, said the once highflying financier is a “serious flight risk.”

But the appeal, which reiterates many of the arguments made by his attorneys in previous court hearings related to his bond, says Hittner made his decision based on misleading and inaccurate statements from prosecutors. Prosecutors claim Stanford would flee because of his international ties, including holding dual U.S. and Antiguan citizenship, having an international network of wealthy acquaintances, and possibly having access to vast wealth hidden around the world.

“The inferences drawn by (Hittner) from other findings of fact are also clearly erroneous and simply do not support its ultimate conclusions that Stanford is a flight risk and that no conditions of bail would reasonably assure his presence at trial,” Dick DeGuerin, Stanford’s defense attorney wrote in the 46-page appeal.

DeGuerin said his client has deep and long-standing ties to the Houston community, including having a home in the Houston area since the mid-1980s, and doesn’t have access to an international network of friends or to secret money.

“He had no access to funds to flee,” DeGuerin wrote in the appeal.

Stanford was considered one of the richest men in the U.S. with an estimated net worth of more than $2 billion. But DeGuerin said his client is now penniless and the question of the missing funds is not relevant to whether he should be freed on bond because prosecutors have not proven Stanford has access to that money.

However, investigators say Stanford secretly diverted more than $1.6 billion in investor funds as personal loans to himself and they believe he could have access to vast wealth hidden around the world.

Stanford’s attorneys also filed a 10-page motion asking he be released while his appeal is considered by the 5th Circuit.

Justice Department spokesman Ian McCaleb declined to comment about Stanford’s appeal. Prosecutors will have a chance to respond with their own court filing later.

Stanford and executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt pleaded not guilty last month to various charges, including wire and mail fraud, in a 21-count indictment issued June 18. The three Stanford executives are free on bond.

James M. Davis, ex-chief financial officer for Stanford’s business empire, was charged with three counts in a criminal information also issued June 18. Davis, who’s been cooperating with prosecutors and is free on bond, is set to plead guilty to the charges as part of a deal with the Justice Department during a court hearing Aug. 6.

Also indicted is Leroy King, the former chief executive officer of Antigua’s Financial Services Regulatory Commission. King, accused of taking bribes from Stanford to overlook irregularities at his bank, is awaiting extradition to the United States.

The U.S. Securities and Exchange Commission filed a lawsuit in February accusing Stanford and his top executives of committing crimes similar to those in the indictment.

Juan A. Lozano/The Associated Press