HOUSTON, Texas – International insurer Lloyd’s of London wants to turn off the money spout to defend jailed financier R. Allen Stanford and three of his former company executives.
Today, U.S. District Judge Nancy Atlas will begin a court hearing to try to resolve who will pay the legal bills, which hit more than $6 million just for Stanford.
Baldwyn native Laura Pendergest-Holt is one of his co-defendants. She was chief investment officer for The Stanford Financial Group, which had an office in Tupelo, before it went belly-up in 2009 under the weight of an investigation by the U.S. Securities and Exchange Commission.
Holt, Stanford and two others are accused of bilking investors out of $7.2 billion in a Ponzi scheme over certificate of deposit sales through his Stanford International Bank, headquartered in Antigua.
Thousands of investors lost their retirement funds and life savings when the company collapsed.
An insurance policy has thus far covered the co-defendants legal bills, and they have sued Lloyd’s to keep paying.
The hearing before Atlas also could provide a preview of the upcoming criminal trials in the case.
Lloyd’s says the policy doesn’t pay on charges of money laundering, one of the many counts Stanford, Holt, Gilbert Lopez and Mark Kuhrt face in the 21-count federal indictment.
The financier and his ex-employees say they are not guilty and that Lloyd’s should honor the policy, which will pay up to $100 million. So far, Stanford has hired and fired attorneys from at least 10 different law firms.
Expected to testify are former Stanford investors.
Stanford’s trial, being handled by another Houston federal judge, is set to begin Jan. 24. The others will be tried after that.
Lloyd’s attorneys called Holt the “face of Stanford’s criminal enterprise” who knew Stanford promised unrealistic returns on investments and said Lopez, the chief accounting officer, and Kuhrt, the global controller, helped create false annual reports for Stanford that helped “dupe regulators and keep the fraud going.”
NEMS Daily Journal