Legal quandary for Texas cricket mogul Stanford


June 18, 2010 Updated Aug 21, 2009 at 8:13 PM EDT

Texas financier and cricket mogul Allen Stanford is so broke he is struggling to find a lawyer while he sees his Caribbean islands, mansions and a fleet of jets sold off to pay victims of an alleged seven-billion-dollar Ponzi scheme.

Stanford, who is being held without bail in a prison north of Houston has already lost one defense attorney for not paying his bills and is having trouble finding another who will defend him without guaranteed compensation.

Meawnhile, the court-appointed receiver in the civil case filed in Dallas has seized everything and is selling off the entire lot to compensate jilted investors -- charging Stanford's estate more than 27 million dollars so far for the privilege.

US District Judge David Hittner, who is presiding over the criminal case filed in Houston by the Justice Department, refused earlier this month to allow Dick DeGuerin to withdraw as Stanford's counsel until another attorney could be found willing to work without guarantee of pay.

Powerhouse Washington law firm Patton Boggs LLP was denied its motion to take up the case on an interim basis to argue for the release of frozen assets including the proceeds of a corporate insurance policy meant to cover Stanford's legal expenses.

According to court documents, the former chairman of the eponymous Stanford Financial Group who was knighted by the Commonwealth of Antigua and Barbuda, has complained of crowded conditions in jail and insufficient air-conditioning in the heat of a Texas summer.

"We are Mr. Stanford's counsel of choice," said Robert Luskin, a partner at Patton Boggs who last made headlines when he defended former presidential aide Karl Rove for his role in revealing the identity of CIA covert operative, Valerie Plame.

"But we are not prepared to provide representation unless there are sufficient resources available for compensation."

The issue of Stanford's legal representation will most likely be resolved by US Judge David Godbey, who is overseeing the civil action against Stanford.

He has received numerous complaints -- not only from Stanford representatives -- that the court-appointed receiver in the case, Ralph Janvey, has overstepped his authority in going after assets, not to mention the millions in fees he is charging.

According to court documents, the Securities and Exchange Commission (SEC), which regulates the US financial markets, has argued that the receiver's actions are "supported by neither logic nor the law."

"It's rare for the SEC to be so publicly in conflict with a receiver," said James Sallah, a former attorney for the government agency and now a partner with the firm of Sallah & Cox.

Sallah in particular challenged the receiver's claim that proceeds from Stanford's legal defense insurance policy are "receivership assets."

The receiver, Janvey, did not respond to a request for comment.

Luskin said the case hinges on Judge Godbey's decision on Stanford's insurance policy. "He's the one who can cut this Gordian knot."

Stanford, who sports the clipped mustache and Savile Row style of English aristocracy, has insisted he is innocent of the charges and determined to stand and fight.

He faces up to 375 years in jail if convicted on 21 charges of multi-billion-dollar fraud, money-laundering and obstruction.

Stanford, 59, had become a larger-than-life figure in Antigua, where his company was the largest employer.

He was once listed by Forbes as the 405th richest person in the world.

He came to cricket prominence when he announced he was putting 28 million dollars into funding a Caribbean-wide Twenty20 tournament in 2005.

Stanford then went on to unveil in 2008 a 20-million-dollar winner-takes-all Twenty20 match between his Caribbean Superstars and England, which shocked and appalled many in the traditional cricket establishment.

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