Judge issues gag order in fraud case of Texas financier Stanford and former executivesBy Juan A. Lozano, AP
Thursday, September 30, 2010
Judge issues gag order in Stanford fraud case
HOUSTON — Concerns over extensive media coverage prompted a federal judge on Thursday to issue a gag order in the case of jailed Texas financier R. Allen Stanford and three of his former company executives — all accused of bilking investors out of $7 billion in a Ponzi scheme.
U.S. District Judge David Hittner said he was forced to issue the gag order after he became concerned the jury pool in the upcoming trials might be tainted because of the local, national and international publicity the case has received and is expected to continue getting.
Stanford’s trial is set to begin Jan. 24. His three co-defendants — Laura Pendergest-Holt, Gilbert Lopez and Mark Kuhrt — will be tried after that.
“The Court also takes judicial notice that some of the trial participants have demonstrated a willingness to ‘try this case in the press,’” Hittner said in his court order. “Such heightened publicity surrounding these proceedings potentially poses a significant danger to providing a fair trial by impartial jurors.”
Hittner issued the order on his own, without prosecutors or defense attorneys in the case requesting it.
Stanford and the former executives 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, in a 21-count indictment issued in June 2009.
They have alluded that the real culprit was James Davis, Stanford’s former chief financial officer, who has pleaded guilty in the case and is cooperating with prosecutors.
Stanford has been jailed since his indictment while the three ex-executives are free on bond.
Stanford and the former executives are also fighting a Securities and Exchange Commission lawsuit filed in Dallas that makes similar allegations.
Stanford, Lopez and Kuhrt are awaiting a ruling by another Houston federal judge in a lawsuit they filed that is asking an insurance policy continue paying their legal bills in their criminal and civil cases. The insurer says the policy has been voided because all three violated its money-laundering clause.
Tags: Fraud And False Statements, Houston, National Courts, North America, Texas, United States