Federal judge deems financier Stanford incompetent to stand trial

[JURIST] A federal judge on Wednesday declared Allen Stanford [BBC profile; JURIST news archive] incompetent to stand trial in connection with a $7 billion fraud scheme. Judge David Hittner of the US District Court for the Southern District of Texas [official website], who postponed the trial [JURIST report] earlier this month, ordered Stanford to enter detoxification for an addiction to anti-anxiety and anti-depression medications prescribed to him by prison physicians that has rendered him unable to meaningfully contribute to his defense. Hittner also denied a request [Houston Chronicle report] made by Stanford's attorneys to allow him to seek treatment at a private clinic, recommending instead that he be transferred to a federal Bureau of Prisons (BOP) [official website] medical facility. A new trial date has yet to be scheduled, though Hittner advised lawyers for both sides to prepare themselves to proceed.

Stanford is accused of defrauding investors [indictment, PDF; JURIST report] out of $7 billion. Last January, a federal judge ordered that $21.2 million in gold coins and bullion be returned [JURIST report] to more than 200 of Stanford's investors. Weeks earlier, the US Department of Justice [official website] began investigating [JURIST report] political donations and other connections between Stanford and US lawmakers. Stanford donated more than $2.3 million to lawmakers' campaigns and spent more than $5 million in lobbying efforts while allegedly carrying out the fraud. Stanford has denied the charges [JURIST report] against him and was originally set to be released on $500,000 bail until prosecutors successfully appealed the decision. Through three of his investment companies, Stanford allegedly violated the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 [texts]. He was originally charged [complaint, PDF; JURIST report] in February 2009 with running a fraudulent investment scheme by selling certificates of deposit on the promise of improbably high interest rates.

 

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.