* Stanford says prison guards ruined his records
* Criminal trial next January
* Investor committee formed in civil case
By Anna Driver and Jonathan Stempel
HOUSTON/NEW YORK, Aug 11 Allen Stanford,
accused of masterminding a $7 billion Ponzi scheme, has lost a
bid to get out of jail to work on a separate trial seeking to
hold Lloyd's of London responsible for his defense costs.
Stanford, who has been locked up for 14 months awaiting his
criminal trial, sought to be freed into a U.S. marshal's
custody so he could be transported to his lawyer's office to
prepare for the Aug. 24 Lloyd's trial. [ID:nN15220064]
The disgraced Texas financier argued he needed to spend as
much as 12 hours a day, seven days a week working with his
He also sought to delay the Lloyd's trial to Oct. 25,
complaining that his jail guards ruined most of his case files
on Aug. 2. Stanford said they "maliciously dumped" his
carefully organized documents into big trash bags on his bunk.
But U.S. District Judge Nancy Atlas in Houston, who is
presiding over the insurance trial, rejected both requests.
She said the "unique circumstances" of the Lloyd's case
meant there should be no delay and that Stanford should direct
complaints about his detention to U.S. District Judge David
Hittner, who is handling his criminal case.
Stanford faces a 21-count indictment focused on what
prosecutors say is his Stanford Financial Group's fraudulent
sale of certificates of deposit issued by his Antigua bank,
Stanford International Bank. He also faces civil charges from
the U.S. Securities and Exchange Commission.
Lloyd's at first agreed to advance Stanford's criminal and
civil defense costs, but changed its mind, relying on a
money-laundering policy exclusion, court records show.
Stanford is also appealing his third bail denial to the
U.S. Fifth Circuit Court of Appeals, the same court that
rejected his two prior bail requests. He argues his jailing has
deprived him of his constitutional rights to due process and
effective assistance of counsel.
In a court filing on Wednesday, Stanford's lawyers renewed
their concern about the detention's effect on their 60-year-old
client's health and mental state, saying Stanford is taking
psychotropic drugs twice a day that "leave him in a less than
fully coherent state of mind."
The criminal trial is scheduled to begin on Jan. 24, 2011.
Separately, U.S. District Judge David Godbey in Dallas has
approved the appointment of a committee to represent Stanford
victims, a spokeswoman for the clients said.
The committee is made up of six former Stanford clients and
John Little, a court-appointed examiner for Stanford
International Bank. It will work with Ralph Janvey, the
court-appointed receiver for the bank, to recover assets for
"We look forward to working cooperatively with the
court-appointed receiver and examiner to identify and prosecute
potential legal claims against third parties who assisted with
Stanford's fraud," Peter Morgenstern, a lawyer for Stanford
clients, said in a statement.
The Lloyd's case is Pendergest-Holt et al v. Certain
Underwriters at Lloyd's of London et al, U.S. District Court,
Southern District of Texas, No. 09-03712. The criminal case is
U.S. v. Stanford in the same court, No. 09-cr-00342. The SEC
case is SEC vs Stanford International Bank Ltd et al, U.S.
District Court, Northern District of Texas, No. 09-298.
(Reporting by Anna Driver in Houston and Jonathan Stempel in
New York; editing by Martha Graybow editing by Andre Grenon)