Judge denies Stanford's plea for pretrial release

HOUSTON Wed Dec 23, 2009 7:07pm EST

Accused swindler Allen Stanford arrives at Federal Court in Houston in the rain December 17, 2009. REUTERS/Donna Carson

Accused swindler Allen Stanford arrives at Federal Court in Houston in the rain December 17, 2009.

Credit: Reuters/Donna Carson

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HOUSTON (Reuters) - A federal judge has denied alleged swindler Allen Stanford's latest bid to be released from prison pending his January 2011 trial.

Without comment, U.S. District Judge David Hittner on Wednesday issued an order denying the pleas from Stanford's lawyers and family that cited his physical and mental deterioration and inability to help prepare his defense.

Hittner's order said he had considered the request and supporting documentation filed this week, which included a spate of letters from family members and friends.

"He knows running would get him nowhere, it would only make things worse," Stanford's son Robert A. Stanford Jr. wrote in one of the letters. "I just want my dad to have a chance to prove himself, is that too much to ask for?"

Shortly after Stanford's June indictment, the judge ordered that he remain jailed pending trial because he was a flight risk.

A U.S. magistrate originally approved Stanford's release pending trial with strict bond conditions, but Hittner revoked that order, citing Stanford's dual U.S. and Antiguan citizenship and frequent world travels. Stanford's first legal team appealed to the U.S. 5th Circuit Court of Appeals, which in August upheld Hittner's ruling.

Stanford, 59, has been in custody since June 19, when he was indicted on 21 criminal charges related to an alleged $7 billion Ponzi scheme centered on fraudulent certificates of deposit issued by his offshore bank on the Caribbean island of Antigua.

The bank was the center of Stanford's global banking and securities business, which was shut down in February when the U.S. Securities and Exchange Commission filed civil allegations that he and others had committed fraud. The federal judge overseeing the SEC case froze Stanford's assets and appointed a receiver to sift through the shut businesses and recover investor money.

While incarcerated, first at a private federal facility and then a federal detention center in downtown Houston -- some of the time in solitary confinement -- Stanford has lost 40 pounds and undergone surgery twice, once for a heart problem and later after an attack by another inmate. He has also begun taking heart and depression medication.

Several family members in Stanford's hometown of Mexia, Texas, including his father, James Stanford, signed a letter expressing concern at those developments.

"We love Allen very much and are deeply concerned about his current mental and physical state due to the conditions he has endured, beginning with his life's work being taken from him in February of this year, and now his incarceration," they said,

A report from a psychiatrist who evaluated Stanford in October said if the situation persisted, "Mr. Stanford's spiraling downhill course will continue to the point where he will suffer further serious physical disorders and, more likely than not, a complete nervous breakdown."

In court filings this week, Stanford's current lawyers insisted he is not a flight risk, and presented voluminous letters to Hittner from family members and friends pleading for his release. Federal prosecutors have yet to file a response.

"This is absolutely the fight of his life; please allow him the opportunity to prepare. He simply cannot do it from prison," wrote Stanford's fiancee, Andrea Stoelker.

In a related filing this week, Stanford's current lawyers said his incarceration prevented anything more than cursory participation in preparing his defense for his January 2011 trial.

(Editing by Steve Orlofsky)

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