Judge Wants to Know 'Who's on First' on Allen Stanford's Legal Team

After hearing Houston businessman R. Allen Stanford complain that he's having trouble preparing for his upcoming criminal trial and civil suits because he is in prison, the federal judge overseeing Stanford's insurance coverage suit promised to talk to U.S. District Judge David Hittner, who is handling Stanford's criminal case and has refused to allow Stanford out of prison on the ground he is a flight risk.

"I will urge Judge Hittner to reconsider," U.S. District Judge Nancy Atlas told Stanford during a nearly three-hour hearing Tuesday morning. "The only way I can see a release ... is there would be a very, very, very tight or close house confinement," she told Stanford, who represents himself pro se in Laura Pendergest-Holt, et al. v. Certain Underwriters at Lloyd's of London, et al.

Atlas will decide if the insurance companies holding the directors' and officers' policies for Stanford Financial Group and related companies can refuse to pay legal fees on the ground Stanford and other SFG executives engaged in money-laundering activities under terms of the policies.

Both Atlas and Hittner sit in the Southern District of Texas.

Atlas told Stanford she is concerned to hear from him that he has never met some of the lawyers who have been paid by the insurance companies for working on his legal teams and that he doesn't know what they have done for him. Stanford told Atlas he has never seen an invoice from any of the attorneys who have sought payment from the insurance companies for doing work for him in his criminal case before Hittner or in a civil case before U.S. District Judge David Godbey of the Northern District of Texas, Securities & Exchange Commission v. Stanford International Bank Ltd., et al.

Stanford did note that lawyers from Brewer Law Group of Washington, D.C., who represent him in the SEC suit, and his new criminal defense attorney, Robert S. Bennett of Houston, have actively worked on his legal matters.

Atlas set a hearing for next month, to be attended by all the lawyers who claim to currently represent Stanford, to determine "who's on first" in representing Stanford.

"We are going to get to the bottom of why so much is being spent on Mr. Stanford's defense," Atlas said, after hearing that the insurance companies have spent about $6 million on legal bills for Stanford so far.

Barry Chasnoff, a partner in Akin Gump Strauss Hauer & Feld in San Antonio who represents insurers Lloyd's of London and Arch Specialty Insurance Co., said he'd like to hear from any lawyers who were paid who "Stanford says shouldn't have been."

Atlas says she's not casting aspersions on any of the lawyers, but just wants to "figure out who's in, who's out" and determine why the "burn rate" of insurance money is so high.

Stanford is pro se in the coverage suit because his former attorneys from Austin's Visser Shidlofsky withdrew from the case with Atlas' permission, although they continue to represent three other former SFG executives in the coverage suit.

At Tuesday's hearing, Bennett sat next to Stanford, who was shackled and wore green prison garb; Bennett told Atlas he is Stanford's criminal defense lawyer and does not represent Stanford in the insurance coverage suit.

Stanford, former chairman of SFG, has pleaded not guilty to fraud and conspiracy charges related to an alleged conspiracy to defraud investors who bought about $7 billion in certificates of deposit sold through Stanford International Bank Ltd., as have the other defendants.

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