UPDATE: Sealed motion may mean loss of attorney for Stanford

It’s just an educated guess, but embattled/jailed financier R. Allen Stanford may be about to lose his legal counsel because he can’t pay.

Stanford is under federal indictment with several other executives of Stanford Financial Group in an alleged $7 billion Ponzi scheme.

Their assets and the company’s were frozen in February, when a Securities & Exchange Commission investigation accused them of a conspiracy to defraud investors. The company was put under the control of a receiver.

Thursday, in the U.S. District Court of Southern Texas, a sealed motion was filed with an attached exhibit of letters between Stanford’s attorney, Dick DeGuerin of Houston, and insurance companies they hoped would pay his defense.

March 26, Stanford conveyed a $5 million Lloyds of London policy to DeGeurin for his defense.

But in a letter dated June 25, the policy underwriters informed DeGuerin that the court-appointed receiver of Stanford’s frozen assets said the policies are “assets” and can’t be paid to DeGuerin unless the court rules they can do so.

• Read Saturday’s Daily Journal for updates.

Patsy R. Brumfield/Daily Journal