By NEMS Daily Journal
NEW ORLEANS – Jailed financier Allen Stanford and co-defendants, including Laura Pendergest-Holt of Baldwyn, won’t get payment for their criminal lawyers, yet.
Last week, the 5th U.S. Circuit Court of Appeals stayed a Houston, Texas, federal judge’s order that Lloyd’s of London insurers must pay the lawyers. The appellate court scheduled arguments for Feb. 25 in New Orleans on the legal questions that spurred Senior U.S. District Judge David Hittner last month to order payment within 10 days.
Stanford, founder and chairman of Stanford Financial Group, Holt and two other company executives and an Antiguan bank regulator face up to 21 charges of conspiracy, fraud and obstruction of justice. The now-defunct company paid insurance to cover legal defense for directors and officers.
Lloyd’s has refused to pay for criminal defense past August, when former Stanford CFO James M. Davis, also of Baldwyn, pleaded guilty. Lloyd’s insurers determined that the accused defendants participated in money laundering and thus it need not pay. But Davis did not plead guilty to money laundering, and no court has found that anyone involved in the case laundered money.
In a 42-page opinion, Hittner said that Lloyd’s position would contravene the purpose of the policies if it required the insured to prove their innocence before being entitled to funds for their defense.
But Lloyd’s lawyers say Stanford Financial agreed to terms of the insurance contract, including a broad definition for money laundering that is met by Davis’ guilty plea and by findings in civil investigations.
Stanford, Holt and the others pleaded not guilty and face a January 2011 trial in Houston.