Miami's ex-DEA chief could escape charge in Allen Stanford case

In a blow to prosecutors, a federal judge Monday called for the dismissal of an obstruction charge against Miami's former DEA chief in the Allen Stanford bank fraud case.

Two months after one of Miami's most celebrated drug cops was charged in the Allen Stanford financial scandal, a federal magistrate is recommending that one of the key charges be thrown out.
Judge Robin Rosenbaum said prosecutors failed to prove Tom Raffanello -- head of security for Stanford's worldwide enterprise -- interfered with a federal investigation by ordering the destruction of reams of company documents.
The former Drug Enforcement Administration chief, who left the agency to join Stanford's security force in 2004, was charged with ordering the shredding of records just days after federal agents shut down Stanford's empire in a massive fraud case in February.
Though prosecutors said Raffanello defied a court order by destroying the documents, Rosenbaum said the government failed to show he impeded the U.S. Securities and Exchange Commission's probe.
The magistrate fell short of rejecting the entire case, however, saying prosecutors were able to show the former drug cop destroyed records in the course of a federal investigation. Her recommendation will be taken up by presiding Judge William Zloch later this month.
The charges over the destruction of the records -- including sensitive background checks on employees and investors -- are just part of the government's case against Stanford, who prosecutors say orchestrated a $7 billion Ponzi scheme.
Raffanello's attorney, Richard Sharpstein, said he was pleased with Rosenbaum's recommendation.
``We hope Judge Zloch not only agrees with Judge Rosenbaum, but throws out the entire case,'' he said.
Lead prosecutor Paul Pelletier could not be reached on Monday. However, prosecutors have argued in prior hearings that Raffanello and co-defendant Bruce Perraud were aware of a judge's order to preserve all company documents when they called a shredding truck to the company's Fort Lauderdale security bunker on February 25.
Federal agents have been scrambling to trace billions of dollars that flowed through Stanford's Antiguan bank over the past decade.
Ruling mostly on technical grounds, Rosenbaum said the order to preserve the records was for the court-appointed receiver and not the SEC. ``[The indictment] does not assert that defendants knew that when they allegedly obstructed the receiver's investigation, they were also interfering with the SEC's proceeding,'' Rosenbaum wrote.
She also threw out a portion of a conspiracy count relating to the obstruction charge. A trial on the remaining counts is tentatively set for January.

Appellate court: Stanford criminal case stays put

An appellate court today refused to move R. Allen Stanford's criminal case to a new federal judge as the fallen billionaire requested.

A three-member panel of the 5th U.S. Circuit Court of Appeals denied the request in a one-sentence order.

Houston civil attorney Michael Sydow and Washington criminal defense lawyer Robert Luskin had asked that Senior U.S. District Judge David Hittner be removed from the case and it be moved to U.S. District Judge Vanessa Gilmore, who drew the first case against one of Stanford's codefendants. Stanford and others are accused of bilking investors in a $7 billion fraud.

“We're disappointed in the result but hopeful that Mr. Stanford will ultimately be permitted to be represented by counsel of his choice,” Luskin said Tuesday.

Luskin and Sydow argued Hittner exhibited “unexplained hostility” in refusing Sydow's request to make an appearance and in ordering that Sydow have no further involvement in the criminal case.

Sydow asked the court to consider him Stanford's lawyer for the limited purpose of receiving notices on a motion filed by Luskin's firm, Patton Boggs, which wants assurance it will be paid before it agrees to represent Stanford.

Houston criminal defense lawyer Dick DeGuerin has asked to be released from the case but Hittner has required DeGuerin stay on until another lawyer enters unconditionally on Stanford's behalf.

Today's appellate ruling came just hours after prosecutors Gregg Costa and Paul Pelletier asked the court to deny Stanford's request to move the case. They said the request for appellate intervention was premature and that allowing attorneys into the case conditionally would cause delay.

The prosecutors said Hittner did not display bias against Sydow and that the matter of fees could be resolved in other courts.

Stanford has not been able to pay his lawyers because his personal assets were frozen along with his company's assets in a civil suit filed in Dallas by the Securities and Exchange Commission. Attorneys for several Stanford-related entities and individuals are attempting to be paid through unfrozen assets or an insurance policy.