The trial was originally due to start Jan. 24, but Stanford's lawyers argued their client could not adequately prepare because he suffers from depression and is addicted to a powerful anti-anxiety drug that has left him mentally foggy.
"The motion for a continuance is granted," U.S. District Judge David Hittner said, adding that no trial date could be set until all of Stanford's medical issues are cleared.
Earlier in the hearing, three psychiatrists, one of whom who was hired by U.S. prosecutors, testified that Stanford was not capable of helping with his defense.
"In my opinion ... he's unable to work effectively with his attorney to develop a defense against the charges," Victor Scarano, a psychiatrist testifying for the defense, told a hearing before U.S. District Judge David Hittner.
Stanford has pleaded not guilty to a 21-count indictment charging him with leading a $7 billion Ponzi scheme run out of Stanford International Bank Ltd on the island of Antigua.
In previous court documents, Stanford's attorneys have argued that he was not mentally fit for trial because of the medications he has been prescribed since being put in prison in June 2009.
The Texas financier is on a very high dosage of clonazepam, an anti-anxiety drug brand-named Klonopin. He also takes mirtazapine, an anti-depressant brand-named Remeron. Stanford suffered brain trauma after a jailhouse fight in September 2009, Scarano told Judge Hittner.
Stanford, 60, should be released so he can safely go through detox at a private facility and then assist in his defense, psychiatrists Ali Fazel and Robert Scardino said at the hearing.
He will need to slowly be weaned from the clonazepam under medical supervision and then undergo a battery of tests to determine the extent of his head injury from the 2009 fight where multiple bones in his face were broken, the psychiatrists said.
A doctor hired by government prosecutors agreed with Scarano's assessment that Stanford was not able to help with his defense. Steven Rosenblatt, also a psychiatrist, said Stanford suffered delirium resulting from clonazepam.
"I would question the reasonableness of that dose in this case," Rosenblatt told the hearing, adding that getting Stanford off the medication "should help a lot."
Prosecutors sought to use Stanford's prison emails and telephone calls to portray him as having a good grasp on issues surrounding the case and current events. They even suggested he may be faking his condition in a bid to get out of jail.
Stanford's attorney's are seeking a two-year delay of the trial. Prosecutors argued a shorter delay was more reasonable.
Stanford, who attended the hearing dressed in a green prison jumpsuit spoke only to confirm that he has agreed with his attorney's request for a two-year delay of the trial.