* No sanctions imposed
* Hearing in criminal case set for Thursday (Recasts, adds background)
HOUSTON, Dec 16 (Reuters) - A federal judge found accused swindler Allen Stanford and his attorneys in contempt of a court order on Wednesday over their attempts to collect insurance policy proceeds to pay defense costs.
No sanctions were imposed, according to the judge’s order.
U.S. District Judge David Godbey in Dallas, who oversees the civil fraud case, granted the motion filed by insurer Lloyd’s of London [LOL.UL], which issued Stanford’s directors and officers policy.
The defendants and Lloyd’s are battling over the payment of defense fees in federal courts in both Dallas and Houston.
Kent Schaffer, Stanford’s lawyer, could not immediately be reached for comment.
In November, the insurer said it was denying payment of defense costs after Aug. 27, the day Stanford’s former chief financial officer, James Davis, pleaded guilty to fraud.
Lloyd‘s, which has so far advanced a total of $4.2 million in legal fees to Stanford defendants, declined to provide additional coverage because claims resulting from money laundering are excluded under the policy, according to court records.
U.S. District Judge David Hittner, who presides over the criminal case, is expected to take up the defense fee issue at a hearing on Thursday.
Stanford, 59, is accused of leading a Ponzi scheme centered on certificates of deposit issued by his Stanford International Bank Ltd, his offshore bank in Antigua.
The former billionaire has been in jail since his arrest on criminal charges in June. He has denied any wrongdoing.
The civil case is SEC v Stanford International Bank et al, U.S. District Court, Northern District of Texas, No. 3:09-cv-00298-N. The criminal case is USA v. Stanford et al, U.S. District Court, Southern District of Texas, No. 4:09-cr-00342.
Reporting by Anna Driver; Editing by Richard Chang