Feds must have info before Stanford testifies

By Patsy R. Brumfield/NEMS Daily Journal

HOUSTON, Texas – If Allen Stanford testifies at his global fraud trial, his attorneys must give prosecutors 48 hours lead time with documents he’ll talk about.
Friday, U.S. District Judge David Hittner made his ruling about appropriate notice, if the former financier takes the stand.
However, Hittner told the jury they should not hold it against Stanford if he doesn’t testify.
Week five ended early, about mid-afternoon, because of a juror’s schedule conflict.
The government accuses Stanford of masterminding a $7.2 billion Ponzi scheme on investors of certificates of deposit bought through his Stanford International Bank Ltd in Antigua.
Stanford, 61, who’s had a cold this past week, maintains he is not to blame for the collapse of his global financial services company.
His attorneys seek to blame former Chief Financial Officer James M. Davis for alleged secret fund maneuvers and the court-appointed receiver, who in 2009 froze company assets.
Davis, who once lived in Northeast Mississippi, testified for the government and said Stanford knew or endorsed every financial transaction through the companies.
SIBL came under the scrutiny of the U.S. Securities and Exchange Commission, which took its allegations to a Dallas, Texas, federal court.
Stanford’s defense insists a planned company consolidation was under way and could have succeeded if the receiver hadn’t acted so quickly.
Earlier in the day, courtroom arguments broke out, The Houston Chronicle reported, and the defense called for a mistrial when prosecutor Andrew Warren asked auditor Morris Hollander if he knew Stanford’s Antiguan auditor’s computer hard drives were erased shortly before government investigators moved in on the Stanford empire.
Outside the jury’s presence, defense attorney Ali Fazel told Hittner the issue makes the jury think something criminal was going on.
The judge denied the mistrial motion but told the jury to disregard the question.
Hollander, who began testimony Wednesday, repeated that under international accounting standards, SIBL did not have to report its $2 billion in loans to Stanford.
Prosecutor Warren, though, asked him in his expert opinion, wasn’t that something bank investors needed to know?
Hollander also admitted he couldn’t say if the bank’s financial report numbers were correct and that the IRS considered bank loans as Stanford loans.
The trial could wrap up next week, courtroom observers speculate.
patsy.brumfield@journalinc.com