Judge delays release of billionaire Stanford

HOUSTON [READ IT: Prosecutors' request for stay of bond]
[READ IT: United States vs. Robert Allen Stanford, Laura Pendergest-Holt, Gilberto Lopez, Mark Kuhrt and Leroy King]
[READ IT: United States vs. Bruce Perraud]
[READ IT United States vs. James M. Davis]
[READ IT: Statement from Dick DeGuerin, Stanford's attorney]

U.S. District Judge David Hittner granted a prosecution request to delay a magistrate's order granting Stanford, once considered one of the richest men in America, a $500,000 bond.

Hittner, who is presiding over Stanford's case, ordered a hearing for Monday to hear arguments on whether Stanford's bond should be revoked.

A Justice Department spokesman declined to comment on Hittner's decision. Dick DeGuerin, Stanford's attorney, did not immediately return an e-mail seeking comment.

The Stanford and three executives of Houston-based Stanford Financial Group are accused of orchestrating a fraud by misusing most of the $7 billion they advised clients to invest in certificates of deposit from the Stanford International Bank in Antigua.

Prosecutors argue that Stanford, who holds Antiguan citizenship and may have access to vast wealth, is a flight risk. But DeGuerin said his client wants to stay and fight the charges.

U.S. Magistrate Judge Frances Stacy granted Stanford's bond on Thursday after a nearly daylong detention hearing, but she delayed enforcement of her order until prosecutors could appeal. Stacy also ordered GPS monitoring and home detention for Stanford.

Friday morning, prosecutors asked Hittner to block Stanford's release until the judge can review the bond decision.

Prosecutor Paul Pelletier argued that Stanford might have access to billions of dollars in unaccounted investor funds, including some in a secret Swiss bank account. Pelletier also said the financier faces a potential life sentence if convicted and has an international network of wealthy acquaintances who would help him. The prosecutor said Stanford failed to tell authorities about his Antiguan passport after his arrest.

"There is no condition or combination of conditions that would eliminate these risks and ensure his appearance for trial," the motion said.

In his response, DeGuerin argued Stacy conducted a thorough detention hearing and made a proper ruling.

"The government overexaggerates any risk of flight," DeGuerin wrote in his motion.

Stanford's family and friends have been working to gather the money for his bond. DeGuerin said his client is broke as authorities have seized all his assets, including his underwear and socks.

Golfer Vijay Singh offered to help pay the bond, but federal rules did not allow it because Singh, a citizen of Fiji, is not a U.S. citizen. Singh has an endorsement deal with Stanford Financial reportedly worth $8 million. Although no longer being paid, Singh has continued to wear the Stanford logo on his visor and shirt.

Stanford, who is being held in the Montgomery County Jail in nearby Conroe, was brought back to the federal courthouse in Houston on Friday to await a decision on his bond. He wore a gray business suit with his leg irons and handcuffs instead of the orange prison jumpsuit he wore Thursday.

Stanford pleaded not guilty Thursday to charges filed last week in a 21-count indictment.

Stanford Financial Group executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, also entered not guilty pleas.

Jury selection in the trial of Stanford and the others was set for Aug. 25 but will likely be delayed.

Also indicted is Leroy King, the former chief executive officer of Antigua's Financial Services Regulatory Commission. King is free on bond after being arrested Thursday. His attorney said Friday he is under house arrest as the Caribbean island processes a request for his extradition to the United States.

King is accused of accepting more than $100,000 in bribes to turn a blind eye to irregularities.

Stanford and his co-defendants are charged with wire fraud, mail fraud, conspiracy to commit mail, wire and securities fraud and conspiracy to commit money laundering.

Stanford, Pendergest-Holt and King are also charged with conspiring to obstruct a Securities and Exchange Commission investigation and obstruction of an SEC investigation.

Investigators say even as Stanford claimed healthy returns for those investors, he was secretly diverting more than $1.6 billion in personal loans to himself.

The indictment also says Stanford and the other executives misrepresented the Antigua island bank's financial condition, its investment strategy and how it was regulated.

The SEC filed a lawsuit in February accusing Stanford and his top executives of committing crimes similar to those in the indictment.

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