UPDATE: Prosecutors agree to postpone Allen Stanford trial

HOUSTON, Texas – U.S. prosecutors agreed to postpone the scheduled Jan. 24 criminal trial of financier R. Allen Stanford, who is accused of leading a $7.2-billion investment fraud scheme, Bloomberg News reports.

Prosecutors said in papers filed with U.S. District Judge David Hittner in Houston late Monday that while they didn’t oppose a defense request to put off the trial, they disagreed on the duration of any delay.

“The requested continuance of two years is excessive,” Assistant U.S. Attorney Gregg Costa said in the filing. Stanford’s lawyers, who took over his defense in October, say they need time to prepare.

Stanford, 60, was indicted in 2009 for allegedly masterminding a securities fraud scheme centered on the sale of certificates of deposit by his Antigua-based Stanford International Bank Ltd. He has denied the charges.

Preparation of his defense has been hampered by changes of counsel. Stanford fired Houston attorneys Dick DeGuerin and Kent Schaffer over what both lawyers called personality and strategic conflicts. He lost the ability to pay lawyer Robert Bennett after a court said Lloyd’s of London underwriters didn’t have to honor a directors’-and-officers’ insurance policy.

Stanford is now represented by court-appointed defense lawyers, Ali Fazel and Robert Scardino. They have told the court that their client may be psychologically unfit to stand trial and have asked for a hearing to assess his competency.

Hittner is slated to hear arguments on the postponement Jan. 6. Scardino said in a telephone interview that the judge will consider the length of the delay and hear arguments on Stanford’s fitness for trial.

The defense attorney said a government psychiatrist has completed his evaluation of Stanford’s mental state and submitted those findings to the court under seal on Monday.

“We will find out the result of the government physician’s diagnoses and prognoses,” Scardino said. He declined to comment further, citing a court order against publicly discussing the case.

The court should delay its selection of a new trial date until the competency issue is resolved “so that the new date will be firm,” Costa said in his filing.