Prosecutors object to bond for Stanford

HOUSTON — Prosecutors asked a federal judge Friday to delay an order allowing Texas billionaire R. Allen Stanford to post bond that would free him until he is tried on charges he swindled investors out of $7 billion.

In a written motion, the prosecutors asked that Stanford not be released until U.S. District Judge David Hittner can review the decision to grant the accused financier a $500,000 bond. Hittner is presiding over Stanford’s case.

Stanford’s attorneys did not immediately respond to the motion.

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

Hittner was expected to decide Friday. The delay on Stacy’s order was set to expire Friday afternoon.

Prosecutor Paul Pelletier argued Stanford should be held without bond because he might have access to billions of dollars in unaccounted investor funds, including some in a secret Swiss bank account, faces a potential life sentence if convicted and has an international network of wealthy acquaintances who would help him.

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

Prosecutors asked they be given until Tuesday to file a more detailed motion objecting to bond. They also said they planned to ask Hittner to revoke the release order and detain Stanford.

Dick DeGuerin, Stanford’s attorney, said his client is not a flight risk and wants to fight the charges against him.

Stanford’s family and friends were 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 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 yesterday.

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

Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, three executives with the now defunct Houston-based Stanford Financial Group, 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.

The billionaire and the executives are accused of orchestrating a massive fraud by misusing most of the $7 billion they advised clients to invest in certificates of deposit from the Stanford International Bank in the Caribbean island of Antigua.

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.