Court under pressure to solve Stanford legal fees

Laura Pendergest-Holt of Baldwyn and another Stanford Financial Group defendant Monday demanded that a federal court either find a way to pay their mounting legal fees or freeze criminal cases against them.
Their former boss, Allen Stanford, continues to ask the court to free up defense funds, and his attorney, Dick DeGuerin of Houston, has threatened to quit over the issue. A status conference is set to discuss the matter Thursday.
Since Aug. 11, U.S. District Judge David Hittner in Houston, Texas, has presided over eight “sealed events,” posted on the court’s electronic document system, possibly dealing with issues related to the non-payment.
It may come down to pitting Hittner’s Southern District against the Dallas-based Northern District, where a court-appointed receiver has frozen all assets of Stanford companies and SFG co-defendants.
Stanford, Holt and three others were indicted in June, accused in an $8 billion Ponzi scheme to bilk thousands of investors who bought certificates of deposit from Stanford International Bank Ltd. All pleaded not guilty.
James M. Davis of Baldwyn, SFG’s former chief operating officer, was accused separately and is expected to plead guilty Thursday in Houston.
Monday, Holt and co-defendant Gilbert Lopez asked Hittner to order Lloyd’s of London to use a Stanford insurance policy designed to pay executives’ legal fees.
Or, if Hittner doesn’t believe he has jurisdiction, they asked him to hold up on their criminal cases until the pay issue is resolved with Lloyd’s.
“Counsel cannot prepare for this trial … without compensation,” Lopez’s court motion states. Holt’s says much the same.
Holt, Lopez and Stanford insist they are without personal funds to pay for their defense. Holt and Stanford even relied upon their legal counsel to post their bail, although Stanford’s was revoked when he was declared a flight risk.
While the receiver initially claimed the insurance policy was a frozen asset, Holt’s motion notes he has suggested the Dallas court could “allocate” the policy proceeds among the claimants, including the receiver.

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Patsy R. Brumfied/NEMS Daily Journal

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