Allen Stanford Mental Fitness Hearing Scheduled for Dec. 20

By Andrew Harris and Laurel Brubaker Calkins

Nov. 29 (Bloomberg) -- R. Allen Stanford, the Texas financier accused of leading a $7 billion investment fraud, faces a Dec. 20 hearing to determine whether he is mentally fit to stand trial next year.

Stanford, 61, returned to Houston earlier this month after a nearly nine-month stay at a U.S. Bureau of Prisons hospital at Butner, North Carolina. He was treated there for a dependency on anti-anxiety drugs given to him in prison and evaluated for the after-effects of a head injury sustained in a jailhouse assault.

Houston U.S. District Judge David Hittner today scheduled the competency hearing to determine if Stanford can assist in his defense. In a separate order, the judge said Stanford’s criminal trial would start with jury selection on Jan. 23.

The former chairman and chief executive officer of Houston- based Stanford Group Co. is accused of misleading investors about the nature and oversight of certificates of deposit issued by his Antigua-based Stanford International Bank Ltd.

Stanford, who maintains his innocence, has been in custody since June 2009, when he was indicted by a federal grand jury in Houston. The court has twice postponed previously scheduled trial dates.

Aiding Defense

Ali Fazel, one of his defense attorneys, today declined to comment on the hearing and trial dates, citing an earlier order from Hittner barring attorneys from discussing the case publicly.

Justice Department spokeswoman Laura Sweeney didn’t immediately respond to a request for comment on the trial date. She has previously declined to comment because of the gag order.

If he’s found unable to help his attorneys prepare his defense, Stanford could return to Butner for further treatment, said Eric Sussman, a former federal prosecutor now in private practice in Chicago, in an interview earlier this month.

If Hittner finds Stanford can’t sufficiently recover his faculties, the judge would be required to decide whether the financier must be committed to a long-term care facility, said Sussman, now a partner in the Chicago office of New York-based Kaye Scholer LLP.

For Stanford to be permanently institutionalized, “he’d have to be deemed a danger to himself or others,” said Sussman, who isn’t involved in the case. “To the extent the judge finds he can’t be restored to competency, they may have to drop the charges,” he said.

Doctors

Houston attorney Wendell Odom, who convinced a jury that Andrea Yates was insane when she drowned her children, said if the government’s doctors have found Stanford fit for trial, it will be difficult for the defense to prove otherwise. Stanford will have an even tougher time proving he’s so permanently incapacitated that he can never be tried, Odom said.

“Mental competency is an incredibly low standard, not the same as insanity,” said Odom, a former federal prosecutor. “It basically means you are cognizant of what’s going on and you can talk to your attorney.”

The case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston).