Legal circus making Texas financier Stanford’s $7 billion fraud case greatest show in court

Stanford lawyer not focused on case’s legal circus

HOUSTON — It might not be the Greatest Show on Earth but the legal circus in the $7 billion fraud case against jailed Texas financier R. Allen Stanford is possibly making it the greatest show in court.

So far, the criminal and civil cases against Stanford have included claims of bloated legal fees by a small army of lawyers and law clerks; a judge admonishing attorneys like an elementary-school teacher to stop calling each other names; allegations of insurance fraud and conflicts of interest.

Stanford has argued with judges, been labeled as difficult and been accused of wasting millions of dollars by hiring and firing attorneys from at least 10 different law firms.

The antagonism among attorneys in a lawsuit filed by Stanford and his three co-defendants to ensure an insurance policy pays for their legal fees is palpable. Barry Chasnoff, an attorney for insurer Lloyd’s of London, said Stanford’s attorney, Bob Bennett, was being abusive by calling him “stingy,” ”greedy” and “immoral” in e-mails. Bennett said he was flooding Chasnoff with e-mails because Lloyd’s has to pre-approve “every little thing we do.”

“I just think name calling is juvenile and unnecessary. I will just stay out of the squabbles,” U.S. District Judge Nancy Atlas, who presiding over the lawsuit, told the attorneys.

Despite all of these legal fireworks, the main attraction — Stanford’s criminal trial — is still nearly seven months away.

Bennett insists this is all in the past. He’s focused on his client’s case and not what’s been written about it.

“The important thing is we are moving past that,” Bennett, a former federal prosecutor, told The Associated Press. “We are looking forward to the date when we can put all this evidence in front of a jury.”

Stanford and former company executives Laura Pendergest-Holt, Gilbert Lopez and Mark Kuhrt are accused of orchestrating a colossal pyramid scheme by advising clients from 113 countries to invest more than $7 billion in certificates of deposit at the Stanford International Bank on the Caribbean island of Antigua, promising huge returns. Stanford’s businesses were headquartered in Houston.

Authorities say Stanford and the executives fabricated the bank’s records, bribed Antiguan regulators with investors’ money from a secret Swiss bank account and misused funds to pay for Stanford’s lavish lifestyle.

Stanford and the executives have pleaded not guilty to various charges, including money laundering, wire and mail fraud. Stanford is also fighting a Securities and Exchange Commission lawsuit filed in Dallas that makes similar allegations.

Since his arrest last year, Stanford has run through a plethora of high-profile attorneys, including Dick DeGuerin and Kent Schaffer of Houston.

Some left the case because there was no guarantee they would get paid. Authorities have seized all assets belonging to Stanford, once considered one of the wealthiest Americans with an estimated net worth of more than $2 billion.

Other attorneys have left because they said Stanford was too difficult a client. Schaffer, who left the case in March, expressed displeasure at having to attend a recent legal proceeding, saying, “I shouldn’t even be involved in this. I want to go home.” Another of Stanford’s attorneys, Michael Essmyer, asked to withdraw from the case, citing “irreconcilable differences” between him and Bennett.

Bennett brushed aside criticism directed at his client and himself. He defended the more than $6 million Stanford has spent so far on legal fees, saying some of the previous attorneys didn’t understand the complexity of the cases or they were just wasteful.

“Issue No. 1 is getting Mr. Stanford out of jail and No. 2 is showing the legitimacy of his business and how he spent 30 years of his life building up a very fine company and everything else is not important to me,” Bennett said, sitting in a cowhide chair in his downtown Houston office.

Bennett argues Stanford’s restrictive conditions at the Federal Detention Center in Houston prevent him from adequately preparing for trial.

In court, Stanford has complained about a lack of Internet access, how he’s “maxed out” on storage space for legal documents in his cell, that his working tools are a “Bic pen and a legal pad” and that he’s allowed to meet with his attorneys in only one room.

“Two guards watch me like I’m some murderer,” Stanford said. “I’m at the limit of my physical and mental capacity to work in that environment.”

Stanford also complains that a prison fight last year has left him blind in one eye, he’s had surgery to repair a non-life-threatening aneurysm in his leg, takes seven medications, including antidepressants, and claims to have memory gaps.

Officials with the Federal Bureau of Prisons, which runs the detention center, have said they’ve been extremely accommodating to Stanford, letting his legal team bring in extra equipment to prepare for trial.

In May, Bennett, with the help of famed Harvard law professor and celebrity defense lawyer Alan Dershowitz, again asked U.S. District Judge David Hittner for bond.

Hittner has yet to rule on the request but has denied two previous requests to reconsider his bond decision and has argued in court with Stanford over his revolving door of attorneys.

Stanford has also at times exasperated Atlas, the judge in the legal fees lawsuit, who has told the financier to curtail his habit of making speeches in court.

Hittner recently granted a request by the financier’s three co-defendants that they be tried separately from their ex-boss. They claimed the “egregious and circus-like conduct” by Stanford and Bennett could prevent them from getting a fair trial.

Legal experts say judges prefer to have defendants tried together. Even efforts by former Enron executives Ken Lay and Jeffrey Skilling to be tried separately were denied.

Stanford’s trial will begin Jan. 24 and the others will be tried after that.