updated 6/29/2009 8:03:22 PM ET 2009-06-30T00:03:22

Texas financier R. Allen Stanford will spend at least one more night in jail after a federal judge said he won’t decide until Tuesday whether to free the once highflying businessman on bond while he awaits trial on charges he swindled investors out of $7 billion.

U.S. District Judge David Hittner heard about four hours of arguments Monday in which prosecutors asked him to revoke an order issued last week granting Stanford a $500,000 bond.

They argued his international ties make him a serious flight risk and that no bond amount, not even $10 million, would guarantee he would show up for his first day of trial.

Prosecutor Gregg Costa said unlike defendants in other high-profile fraud cases who were released on bond — including former Enron Corp. executives Jeffrey Skilling and Ken Lay — Stanford holds dual U.S. and Antiguan citizenship, has his primary home outside the United States, and might have access to vast wealth hidden around the world.

Costa also said Stanford has an international network of wealthy acquaintances who would help him, has extensive international travel experience and failed to tell authorities he had two Antiguan passports.

The prosecutor told Hittner he predicted Stanford would attend initial court hearings in his case but would start to worry once he’d see the mounting evidence against him.

“When that happens he’s going to see the writing on the wall and that writing is he has everything to lose and nothing to gain by staying around for trial,” Costa said.

Stanford and three executives of his now defunct Houston-based Stanford Financial Group were accused in a June 18 indictment of misusing most of the $7 billion that they advised clients to invest in certificates of deposit from the Stanford International Bank in the Caribbean island of Antigua.

Dick DeGuerin, Stanford’s attorney, said his client is broke because all his assets have been seized and has a very strong incentive to stay.

“When we win this case, and we will win this case, Mr. Stanford will be restored of much of what he has been stripped of,” DeGuerin said. “That is a tremendous financial incentive to stay.”

DeGuerin denied prosecutors’ claims Stanford has access to secret wealth stolen from investors and rejected comparisons of his client to Wall Street swindler Bernard Madoff, sentenced in New York to 150 years in prison Monday for running a massive pyramid scheme.

DeGuerin also told Hittner his client now lives in Houston, has strong family ties here and on several occasions tried to turn himself in to authorities.

“This is not a ploy. We wanted to show the court a track record of Mr. Stanford wanting to fight these accusations,” DeGuerin said.

Afterward, DeGuerin said he thought Monday’s hearing went well and believed Hittner will issue a fair ruling. Prosecutors declined to comment.

Stanford wore a navy suit during Monday’s hearing and at one point gave a thumbs up to family members in the courtroom. During a detention hearing last week, Stanford wore an orange prison jumpsuit.

Stanford was considered one of the richest men in America with an estimated net worth of more than $2 billion. But DeGuerin said his client’s net worth is now zero and that it wasn’t easy for his family and friends to put together the $100,000 in cash needed for his bond.

Last week, Stanford and executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt pleaded not guilty to charges filed in a 21-count indictment.

Also indicted is Leroy King, the former chief executive officer of Antigua’s Financial Services Regulatory Commission. King, accused of taking bribes from Stanford to overlook irregularities at his bank, is awaiting extradition to the United States.

Stanford and his co-defendants are charged with wire fraud, mail fraud, conspiracy to commit mail, wire and securities fraud and conspiracy to commit money laundering.

Stanford, Pendergest-Holt and King are also charged with conspiring to obstruct a Securities and Exchange Commission investigation and obstruction of an SEC investigation.

Investigators say even as Stanford claimed healthy returns for investors, he was secretly diverting more than $1.6 billion in personal loans to himself which were used to pay for his lavish lifestyle, including six private jets, a helicopter, homes in Miami and St. Croix and his $100,000 a month American Express bill, Costa said.

The indictment also says Stanford and the other executives misrepresented the Antigua island bank’s financial condition, its investment strategy and how it was regulated.

The SEC filed a lawsuit in February accusing Stanford and his top executives of committing crimes similar to those in the indictment.

The Associated Press and Reuter contributed to this report.


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