Jailed Texas financier R. Allen Stanford wanted former White House political adviser Karl Rove’s attorney to represent him against charges he bilked investors out of $7 billion.
But instead he’s getting a public defender.
During a brief court hearing Tuesday, U.S. District Judge David Hittner appointed the federal public defender office in Houston to represent Stanford after his previous attorney, Dick DeGuerin, indicated he no longer wanted to be on the case.
DeGuerin told Hittner he still wanted to withdraw, in part because he has no assurances he’ll be paid. But Washington-based attorney Robert Luskin, who Stanford wants to hire, also wants these same assurances.
Hittner asked Stanford if he had any funds to hire an attorney.
Stanford, who sat in the jury box, unshaven and wearing an orange prison jumpsuit, at first replied yes, saying there are funds from an insurance policy that would pay for his legal fees.
But a court-appointed receiver in a civil lawsuit against Stanford filed in Dallas by the Securities and Exchange Commission has seized all of his assets, including proceeds from the insurance policy. DeGuerin says Stanford, who was considered one of the richest men in the U.S. with an estimated net worth of more than $2 billion, is now penniless.
“Do you have sufficient funds to retain an attorney to represent you?” Hittner asked Stanford.
“I don’t know the answer to that your honor,” Stanford replied.
Hittner then made the attorney change.
“The case has to get ready for trial. This is the business before the court,” Hittner said. “The man needs an attorney.”
Stanford and other executives of the now defunct Houston-based Stanford Financial Group are accused of orchestrating a massive Ponzi scheme by advising clients to invest more than $7 billion in certificates of deposit from the Stanford International Bank in the Caribbean island of Antigua.
Investors were promised their investments were safe and were scrutinized by Antigua’s bank regulator and an independent auditor.
But authorities say Stanford and the indicted executives fabricated the bank’s balance sheets, bribed Antiguan regulators and misused investors’ money to pay for his lavish lifestyle.
Marjorie Meyers, head of the public defender office, said another lawyer in her office, Michael Sokolow, would be the lead attorney in the case. Sokolow met with Stanford after the hearing.
Meyers said Patton Boggs, Luskin’s law firm, still wants to represent Stanford.
Samuel Rosenthal, an attorney with Patton Boggs, was at the hearing but wasn’t asked by Hittner to take part.
Afterward, Rosenthal would only say his firm still has a motion pending before Hittner.
In the motion filed last month, Rosenthal and Luskin say their firm would be willing to represent Stanford as long as Hittner issues an order allowing it to be paid for its work and that any funds used to pay for legal fees will not be frozen.
After the hearing, DeGuerin wished Stanford luck.
“He’s got a long, hard road in front of him,” he told reporters. “I wish him the best.”
DeGuerin said money wasn’t the only reason he wanted out of the case. He said his good relationship with Stanford was ruined by “intolerable interference” from some individuals, but he would not say who these people were.
Tuesday’s hearing had been set for last month, but was postponed after Stanford was hospitalized with an irregular heartbeat and high pulse.
Medical tests detected a non-life-threatening aneurysm in his leg. The 59-year-old financier is being held at a private jail in Conroe, just north of Houston, that houses federal detainees.
DeGuerin said Stanford has received medical treatment but that he needs more care and that his health is “not good.”
Stanford, along with three former company executives, have pleaded not guilty to various charges, including wire and mail fraud, in a 21-count indictment issued June 18. Stanford has been jailed without bond since then, considered a flight risk by Hittner.
Another former executive, James M. Davis, has pleaded guilty in the case and is cooperating with prosecutors.