Stanford and insurer at odds over legal fees
HOUSTON
At a hearing in federal court in a lawsuit related to the
payment of legal fees, attorneys for insurer Lloyd's of London told
U.S. District Judge Nancy Atlas the company refuses to pay for
Stanford's newest criminal defense team -- his fourth since being
indicted nearly a year ago on charges alleging he defrauded
investors out of some $7 billion.
Barry Chasnoff, an attorney for Lloyd's, said the insurer had
concerns that one of Stanford's new attorneys, who was approved
just last month, had already asked to be released because of
differences with Stanford and the other new attorney on the case.
Several of Stanford's previous attorneys have said they left the
case because the financier was difficult to work with. At Tuesday's
hearing, Stanford represented himself because his attorneys in the
lawsuit stopped working for him due to a "conflict of interest."
Stanford told Atlas he has been taken advantage of, has never
seen any of the bills submitted by his prior attorneys and doesn't
know what work many of them actually did.
"I think it's an obscene amount of money that's been spent on
what has been produced," Stanford said.
Atlas set a June 3 hearing to detail how the $6 million in legal
fees for civil and criminal cases have been spent.
"We are going to get to the bottom of why so much money is
being spent in Mr. Stanford's defense," Atlas said.
Stanford and three executives of his now defunct Houston-based
Stanford Financial Group face trial in January on charges including
money laundering, wire and mail fraud.
Their legal fees are being paid by an insurance policy from
Lloyd's. But the insurer says the policy doesn't pay on charges of
money laundering. An appeals court in March said a lower court must
determine if money laundering was committed in order for the policy
to be invalid.
The lawsuit over the payment of legal fees was filed by Stanford
and the executives against the insurer and is being handled by
Atlas, who is holding an evidence hearing on Aug. 24 in which the
insurer will have to prove Stanford and the executives committed
money laundering.
U.S. District Judge David Hittner in Houston is overseeing the
criminal case against Stanford.
During Tuesday's hearing, Stanford asked Atlas if he could help
him with his request to be freed on bond. Stanford has been held
without bond since his June indictment, deemed a serious flight
risk by Hittner. Stanford has a third request before Hittner asking
for bond. The two previous requests have been denied.
"I never had any intention of fleeing," Stanford said. "I can
win this case. I didn't run a Ponzi scheme."
Since being jailed, Stanford has had a series of health
problems. He said another inmate beat him and left him unable to
see out of his right eye.
Atlas said she would ask Hittner to reconsider his bond
decision.
Stanford and the three executives are accused of orchestrating a
colossal pyramid scheme by advising clients to invest more than $7
billion in certificates of deposit from the Stanford International
Bank in the Caribbean island of Antigua and then misusing the
money, in part to pay for Stanford's lavish lifestyle.
Stanford and the executives have pleaded not guilty.