R. Allen Stanford, the Texas financier accused of running a $7 billion investor fraud, will be represented by the federal public defender's office in his criminal case because he has no money to hire an attorney.
Kent Schaffer, a private-practice lawyer in Houston who attended Tuesday's hearing at that city's federal courthouse, said afterward he will work with the public defender's office on Stanford's case.
Stanford, who denies all wrongdoing, was brought to court in shackles from jail, where he is being held until trial on charges he bilked investors in a "massive" Ponzi scheme involving certificates of deposit at Antigua-based Stanford International Bank. The head of the Stanford Financial Group was ranked the 205th-richest American in 2008 by Forbes magazine, which estimated his net worth at $2 billion.
Regulators and investors have fought attempts to unlock legal defense funds from Stanford's seized assets, which were frozen by court order on Feb. 17 when the U.S. Securities and Exchange Commission accused him of investor fraud. Stanford is also being denied access to his company's liability insurance policy, after the court-appointed receiver claimed those funds may be needed to defend Stanford's companies against lawsuits.
Stanford's previous attorney, Dick DeGuerin, has estimated it will cost more than $20 million and take a year to prepare for a trial that could last six months. Stanford faces spending the rest of his life in prison if convicted of the most serious of 21 felony counts against him.
Showing posts with label lawyer. dick deguerin. Show all posts
Showing posts with label lawyer. dick deguerin. Show all posts
Thursday, 17 September 2009
Saturday, 29 August 2009
Saturday, 22 August 2009
Lawyers' dispute turns physical
Jailed former billionaire R. Allen Stanford has had trouble paying, and thus keeping, his attorneys, and now it appears two of them got into a physical altercation last month.
A Houston Police Department report shows that on the evening of July 10 several officers responded to a call to the office of Dick DeGuerin, a criminal defense lawyer who has since asked to be released from representing Stanford.
DeGuerin said he called police because Houston attorney Michael Sydow punched him and was trespassing and refused to leave.
But Sydow, a civil lawyer who has attempted to serve in limited capacity in Stanford's criminal case, told police that DeGuerin pushed him into a chair and bumped him with his chest.
Houston Police spokesman John Cannon confirmed that the report includes a photo of DeGuerin's chest with a red mark where DeGuerin said Sydow punched him with his fist.
Neither lawyer pressed charges.
DeGuerin said the two argued over a written statement in which Stanford allowed DeGuerin to collect his fees from an insurance policy Stanford's company carried. Exactly how Stanford will pay whoever ends up representing him is unclear, because his assets were frozen when federal regulators filed a civil fraud complaint against him, his companies, and other company executives.
DeGuerin said Sydow called him a liar. He said he then ordered Sydow out of the office and grabbed the document, at which point Sydow punched him. DeGuerin, who had a knee replacement a month before the incident, said he neither pushed nor chest bumped Sydow. He said two other men from the office intervened and corralled Sydow into an outer office while DeGuerin called police.
Sydow, who said he is serving as local counsel in the criminal case, said Friday that they were discussing DeGuerin charging a $30 million flat fee to Stanford.
Sydow said he told DeGuerin he thought it unethical to change fees mid-representation, and that riled DeGuerin.
Sydow said he stood up and DeGuerin shoved him back into a chair, grabbed the document and then claimed Sydow assaulted DeGuerin. Sydow said he never punched DeGuerin.
DeGuerin said details of this altercation are among many papers he's supplied Senior U.S. Judge David Hittner in his effort to get off the case. He said the documents show that Stanford wishes to have other attorneys, including Sydow. DeGuerin said he can't work with Sydow.
Stanford faces 21 criminal charges in an alleged $7 billion scam focusing on CDs at his offshore bank.
On July 31, a news release announced Stanford's new criminal lawyer would be Robert Luskin of Washington, D.C.
Luskin said he would enter the case only if he could be assured he would be paid.
Hittner refused to release DeGuerin from the case until another lawyer entered unconditionally.
Hittner denied Sydow's request to enter the case just to receive notices regarding whether Luskin could be paid. Luskin and Sydow went to an appeals court to remove Judge Hittner from the case but were denied.
“It's an impossible situation,” DeGuerin said.
A Houston Police Department report shows that on the evening of July 10 several officers responded to a call to the office of Dick DeGuerin, a criminal defense lawyer who has since asked to be released from representing Stanford.
DeGuerin said he called police because Houston attorney Michael Sydow punched him and was trespassing and refused to leave.
But Sydow, a civil lawyer who has attempted to serve in limited capacity in Stanford's criminal case, told police that DeGuerin pushed him into a chair and bumped him with his chest.
Houston Police spokesman John Cannon confirmed that the report includes a photo of DeGuerin's chest with a red mark where DeGuerin said Sydow punched him with his fist.
Neither lawyer pressed charges.
DeGuerin said the two argued over a written statement in which Stanford allowed DeGuerin to collect his fees from an insurance policy Stanford's company carried. Exactly how Stanford will pay whoever ends up representing him is unclear, because his assets were frozen when federal regulators filed a civil fraud complaint against him, his companies, and other company executives.
DeGuerin said Sydow called him a liar. He said he then ordered Sydow out of the office and grabbed the document, at which point Sydow punched him. DeGuerin, who had a knee replacement a month before the incident, said he neither pushed nor chest bumped Sydow. He said two other men from the office intervened and corralled Sydow into an outer office while DeGuerin called police.
Sydow, who said he is serving as local counsel in the criminal case, said Friday that they were discussing DeGuerin charging a $30 million flat fee to Stanford.
Sydow said he told DeGuerin he thought it unethical to change fees mid-representation, and that riled DeGuerin.
Sydow said he stood up and DeGuerin shoved him back into a chair, grabbed the document and then claimed Sydow assaulted DeGuerin. Sydow said he never punched DeGuerin.
DeGuerin said details of this altercation are among many papers he's supplied Senior U.S. Judge David Hittner in his effort to get off the case. He said the documents show that Stanford wishes to have other attorneys, including Sydow. DeGuerin said he can't work with Sydow.
Stanford faces 21 criminal charges in an alleged $7 billion scam focusing on CDs at his offshore bank.
On July 31, a news release announced Stanford's new criminal lawyer would be Robert Luskin of Washington, D.C.
Luskin said he would enter the case only if he could be assured he would be paid.
Hittner refused to release DeGuerin from the case until another lawyer entered unconditionally.
Hittner denied Sydow's request to enter the case just to receive notices regarding whether Luskin could be paid. Luskin and Sydow went to an appeals court to remove Judge Hittner from the case but were denied.
“It's an impossible situation,” DeGuerin said.
Saturday, 15 August 2009
Lawyer wants 34% of money recovered in Stanford case
The attorney supposed to clean up what the government says was Texas businessman R. Allen Stanford's multibillion-dollar Ponzi scheme is managing to anger just about every party involved in the case.
The Securities and Exchange Commission and other stakeholders in the complicated and far-flung case say Dallas attorney Ralph Janvey, appointed by the court to track down billions of missing dollars, has instead become a rogue receiver who refuses to cooperate with the SEC.
"You know everyone in the courtroom is angry with you," said U.S. Judge David Godbey at a recent court hearing.
Stanford's attorneys say Janvey is "exceeding his authority." And John Little, the court-appointed examiner who represents the interests of jilted investors, said they feel Janvey's actions have been shocking and outrageous.
The latest flash point has been Janvey's demands for more than $27 million in fees for himself and the team of lawyers and consultants he hired to take over Stanford's business empire and track down the missing billions. The giant paycheck would come from the same pot of money he is amassing that is supposed to be divided among Stanford's allegedly defrauded investors.
The SEC has accused Stanford and some of his top company officials of running a $7 billion scheme by promising inflated returns to more than 20,000 investors on certificates of deposit at his bank in Antigua. Instead of investing the money, Stanford, who faces additional criminal charges in Houston, paid off old investors with deposits from new investors, according to the government.
Godbey has not ruled on Janvey's mid-May request for nearly $20 million, covering work through April 12. Nor has he ruled on Janvey's request last week for another $7.6 million to cover work for a seven-week period from mid-April to the end of May.
Janvey wants to pay himself and the more than 100 lawyers and consultants he has hired to work the case. But his requested share of the pie is 34% of the $81.1 million of cash on hand the receiver has under his control in a bank account, according to court records. While investors will be fortunate to get back just pennies on the dollar, the attorneys could walk away with millions.
Janvey is requesting nearly $800,000 in fees and expenses for his law firm. The bill also covers nearly $8.9 million in fees and expenses for the advisory firm FTI Consulting, and about $8.4 million for the law firm Baker Botts.
The SEC is fighting Janvey's bill, telling the judge it would be "inappropriate" to pay him the $1.1 million a week he asked for in a filing last week.
The agency complained that Janvey is employing too many high-priced lawyers, including nine partners at Baker Botts and six financial consultants from FTI Consulting who were charging at least $500 an hour. SEC lawyers also took issue with a bill from FTI charging $280 an hour for photocopying and creating shipping labels and binders.
Peter Henning, a professor at Wayne State University's law school and former SEC attorney, said Janvey is in a difficult spot because "these are not cheap cases."
"But there is a concern that it for firms becomes free billing," Henning said.
Securities experts say the relationship between receivers and the SEC is typically more cooperative than contentious. But the friction in this case led the agency, which recommended Janvey for appointment, to try to get a court order stripping him of some of his authority, a motion which was denied.
SEC lawyers acknowledged that they were unable to recall ever before trying to rein in a receiver.
"It is very unusual for there to be this level of conflict between the receiver and the SEC," said Kelly Crawford, a securities lawyer who four times has been a court-appointed receiver. "The SEC remains a watchdog for investors even after the receiver appointment, and if the SEC believes he is not acting in the best interests of investors by charging exorbitant fees ... they are going to step in."
SEC officials declined to publicly discuss their displeasure with Janvey. Rose Romero, the agency's regional director in Fort Worth, said only that the SEC's job is to "look out for the interests of the investors. As with all cases, we are aggressively carrying out this mission in the Stanford case."
For his part, Janvey replied in court papers that "skilled professional services are inherently costly." He said he and the firms he hired are working at a 20-percent discount.
At a recent court hearing, he said this was the first time in his career that he has been in a dispute with the SEC. He also pointed out that he does work for the SEC, but answers to the court.
Janvey's lawyer did not return a message left by the Associated Press. Through his PR firm, for which the receiver requested $165,000 in fees and expenses, Janvey pointed to court documents in which SEC attorney Kevin Edmundson discussed an inability to work out areas of disagreement, but added that "We still want the receiver. We still support the receiver."
One of the impasses is over whether Janvey is targeting innocent investors by going after their original investments in CDs at Stanford's bank in Antigua, as the SEC believes. Janvey has filed lawsuits for $925 million that he is trying to recover from 650 investors and former financial advisers — a move known as a "clawback." The SEC said many of those investors are innocent victims.
Janvey said he is trying to increase the pot of money and make everyone share equally in the losses.
But securities lawyers and the SEC say such a tactic victimizes investors a second time. Last month, Godbey ruled against Janvey, who has taken the issue of whether he can claw back principal to a federal appeals court. Experts in securities law said Janvey's strategy is unusual and unfair.
"To go after principal is just enlarging the number of victims unnecessarily and unwisely," Crawford said.
In addition to the civil case against Stanford in Dallas, he and four executives of his now defunct Stanford Financial Group are accused of orchestrating the massive Ponzi scheme in a criminal indictment in Houston. Investigators said Stanford secretly diverted more than $1.6 billion in investor funds as personal loans to himself.
Stanford and executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt pleaded not guilty to various criminal charges in Houston, including wire and mail fraud, in a 21-count indictment issued June 18. The three Stanford executives are free on bond while Stanford himself remains jailed in the Houston area.
James Davis, ex-chief financial officer for Stanford's business empire, has been cooperating with prosecutors and is free on bond.
The Securities and Exchange Commission and other stakeholders in the complicated and far-flung case say Dallas attorney Ralph Janvey, appointed by the court to track down billions of missing dollars, has instead become a rogue receiver who refuses to cooperate with the SEC.
"You know everyone in the courtroom is angry with you," said U.S. Judge David Godbey at a recent court hearing.
Stanford's attorneys say Janvey is "exceeding his authority." And John Little, the court-appointed examiner who represents the interests of jilted investors, said they feel Janvey's actions have been shocking and outrageous.
The latest flash point has been Janvey's demands for more than $27 million in fees for himself and the team of lawyers and consultants he hired to take over Stanford's business empire and track down the missing billions. The giant paycheck would come from the same pot of money he is amassing that is supposed to be divided among Stanford's allegedly defrauded investors.
The SEC has accused Stanford and some of his top company officials of running a $7 billion scheme by promising inflated returns to more than 20,000 investors on certificates of deposit at his bank in Antigua. Instead of investing the money, Stanford, who faces additional criminal charges in Houston, paid off old investors with deposits from new investors, according to the government.
Godbey has not ruled on Janvey's mid-May request for nearly $20 million, covering work through April 12. Nor has he ruled on Janvey's request last week for another $7.6 million to cover work for a seven-week period from mid-April to the end of May.
Janvey wants to pay himself and the more than 100 lawyers and consultants he has hired to work the case. But his requested share of the pie is 34% of the $81.1 million of cash on hand the receiver has under his control in a bank account, according to court records. While investors will be fortunate to get back just pennies on the dollar, the attorneys could walk away with millions.
Janvey is requesting nearly $800,000 in fees and expenses for his law firm. The bill also covers nearly $8.9 million in fees and expenses for the advisory firm FTI Consulting, and about $8.4 million for the law firm Baker Botts.
The SEC is fighting Janvey's bill, telling the judge it would be "inappropriate" to pay him the $1.1 million a week he asked for in a filing last week.
The agency complained that Janvey is employing too many high-priced lawyers, including nine partners at Baker Botts and six financial consultants from FTI Consulting who were charging at least $500 an hour. SEC lawyers also took issue with a bill from FTI charging $280 an hour for photocopying and creating shipping labels and binders.
Peter Henning, a professor at Wayne State University's law school and former SEC attorney, said Janvey is in a difficult spot because "these are not cheap cases."
"But there is a concern that it for firms becomes free billing," Henning said.
Securities experts say the relationship between receivers and the SEC is typically more cooperative than contentious. But the friction in this case led the agency, which recommended Janvey for appointment, to try to get a court order stripping him of some of his authority, a motion which was denied.
SEC lawyers acknowledged that they were unable to recall ever before trying to rein in a receiver.
"It is very unusual for there to be this level of conflict between the receiver and the SEC," said Kelly Crawford, a securities lawyer who four times has been a court-appointed receiver. "The SEC remains a watchdog for investors even after the receiver appointment, and if the SEC believes he is not acting in the best interests of investors by charging exorbitant fees ... they are going to step in."
SEC officials declined to publicly discuss their displeasure with Janvey. Rose Romero, the agency's regional director in Fort Worth, said only that the SEC's job is to "look out for the interests of the investors. As with all cases, we are aggressively carrying out this mission in the Stanford case."
For his part, Janvey replied in court papers that "skilled professional services are inherently costly." He said he and the firms he hired are working at a 20-percent discount.
At a recent court hearing, he said this was the first time in his career that he has been in a dispute with the SEC. He also pointed out that he does work for the SEC, but answers to the court.
Janvey's lawyer did not return a message left by the Associated Press. Through his PR firm, for which the receiver requested $165,000 in fees and expenses, Janvey pointed to court documents in which SEC attorney Kevin Edmundson discussed an inability to work out areas of disagreement, but added that "We still want the receiver. We still support the receiver."
One of the impasses is over whether Janvey is targeting innocent investors by going after their original investments in CDs at Stanford's bank in Antigua, as the SEC believes. Janvey has filed lawsuits for $925 million that he is trying to recover from 650 investors and former financial advisers — a move known as a "clawback." The SEC said many of those investors are innocent victims.
Janvey said he is trying to increase the pot of money and make everyone share equally in the losses.
But securities lawyers and the SEC say such a tactic victimizes investors a second time. Last month, Godbey ruled against Janvey, who has taken the issue of whether he can claw back principal to a federal appeals court. Experts in securities law said Janvey's strategy is unusual and unfair.
"To go after principal is just enlarging the number of victims unnecessarily and unwisely," Crawford said.
In addition to the civil case against Stanford in Dallas, he and four executives of his now defunct Stanford Financial Group are accused of orchestrating the massive Ponzi scheme in a criminal indictment in Houston. Investigators said Stanford secretly diverted more than $1.6 billion in investor funds as personal loans to himself.
Stanford and executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt pleaded not guilty to various criminal charges in Houston, including wire and mail fraud, in a 21-count indictment issued June 18. The three Stanford executives are free on bond while Stanford himself remains jailed in the Houston area.
James Davis, ex-chief financial officer for Stanford's business empire, has been cooperating with prosecutors and is free on bond.
Monday, 27 July 2009
Allen Stanford Gets A Look Into His Future
Sir Allen is having a little trouble acclimating to his surroundings. Stanford's attempts to reminisce about how much fun it was to be a billionaire have been interrupted recently by episodes of profuse sweating due to the Texas heat. The knight's lawyer, Dick DeGuerin, is outraged that a member of royalty is being treated to the indignity of residing in a cell with 8 to 10 peasants without air conditioning (in addition to other insufferable conditions) and is demanding a room upgrade for his client.
"For part of the time last week, they were in total darkness," DeGuerin wrote. "The cell has been without air conditioning for at least a week. There are no windows for light or ventilation and the conditions are intolerable."
It looks like the guy who said,"I'll die and go to hell if it's a Ponzi scheme" is getting a sneak preview of what's to come.
"For part of the time last week, they were in total darkness," DeGuerin wrote. "The cell has been without air conditioning for at least a week. There are no windows for light or ventilation and the conditions are intolerable."
It looks like the guy who said,"I'll die and go to hell if it's a Ponzi scheme" is getting a sneak preview of what's to come.