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And founder R. Allen Stanford wants new lawyers – again – on his federal criminal charges that he masterminded a $7.2 billion Ponzi scheme.
In Northeast Mississppi, former Stanford and Stanford-related properties are on the auction block.
Stanford’s legal problems come on two fronts:
• A civil lawsuit by the U.S. Securities & Exchange Commission into the operations of Antigua-based Stanford International Bank Ltd. and Stanford’s other businesses.
Corporate and personal assets are frozen and under the jurisdiction of a Texas federal court-ordered receiver, Ralph Janvey, who has billed millions in fees to discover, inventory and start to sell these assets. Proceeds are aimed at returning as much money as possible to investors into Stanford International CDs that proved worthless when the financial empire collapsed in 2009.
Stanford Financial Group had offices in Tupelo, Jackson and Memphis, and numerous Northeast Mississippi residents are among the thousands who lost their life savings and retirements in the collapse.
Several area investors sued their former financial advisers, trying to recover their losses, but recently U.S. District Judge David Godbey said these investors cannot sue until Janvey’s work is done.
Janvey’s office continues to sell Stanford properties, with a Tupelo auction expected to be complete in about three months.
On the block are SFG’s building in Tupelo’s Fairpark District, the ForeFront Golf manufacturing and distribution in Baldwyn and seven downtown Baldwyn properties owned by former Stanford executive James M. Davis.
This week, Stanford’s wife, Susan, asked the Dallas federal court for a hearing on her right to proceeds from the sale of two of her husband’s yachts.
Regardless of the receiver’s opinions about who can sue, American Express Co. on Wednesday sued Stanford for a credit card debt of $115,712. The company will serve the legal papers at the federal detention center in Houston, Texas, where he’s been held for months.
• A criminal indictment of 21 counts that he and other executives, plus an Antiguan regulator, carried out a conspiracy to defraud CD investors.
Stanford is scheduled in a Houston court Tuesday to try to substitute attorneys.
One of his current lawyers, Kent Schaffer, told the Texas Lawyer Blog that he, co-counsel and Stanford disagree over pre-trial and trial strategy.
If District Judge David Hittner allows the change, it will be the third set of attorneys Stanford has had since he was indicted in June with Davis, then-Chief Financial Officer Laura Pendergest-Holt, both then of Baldwyn, and others.
Recently, a court ruling ordered their legal fees to be paid by a Lloyd’s of London insurance policy bought by the company before it collapsed.
Davis pleaded guilty in August and has been cooperating with prosecutors for his likely testimony in their criminal trial set for January 2011. The others pleaded not guilty.
Stanford is the only defendant in jail, because the court labeled him a considerable flight risk.
He has lost two appeals to the U.S. 5th Circuit Court of Appeals to be released on house-arrest.
Contact Patsy R. Brumfield at (662) 678-1596 or patsy.brumfield@djournal.com.
- FOR MORE – Read the Sunday Journal’s Business section for the story on the auction of Stanford Financial Group properties.