Financier in $7bn Ponzi case ‘faking amnesia’

A FORENSIC psychologist yesterday testified that jailed Texas financier R Allen Stanford is mentally stable and competent to be tried next month on charges he deceived investors out of $7 billion (€5.3bn) in a massive Ponzi scheme.

Stanford was declared incompetent in January due to an addiction to an anti-anxiety drug he developed while jailed in Houston. He has spent more than eight months being treated at a federal prison hospital.

Robert Cochrane, who helped treat Stanford at the hospital, said the financier was off the drug, could think clearly and could assist his solicitors in his defence.

Cochrane told US district judge David Hittner that while Stanford was being treated, the financier reported “feeling great, was very energetic... was laughing a lot. He said, ‘I’m thinking great. I’m sharp, clearheaded.’ He looked quite well.”

Stanford’s legal team contends the financier is still not competent to stand trial on January 23 because a brain injury he suffered in a September 2009 jail fight as well as the various medications he was given while jailed in Houston have made his condition worse.

Several medical experts who plan to testify for Stanford at the hearing say he suffers from conditions including post-traumatic stress disorder from his jail fight, a major depressive disorder and bipolar disorder.

Stanford is also claiming head injuries he suffered in the jail fight gave him retrograde amnesia, leaving him with complete memory loss of all events in his life prior to that assault, including details about his business operations.

Cochrane testified he disagreed with the conclusions by Stanford’s medical experts and told Hittner that neurological testing on the financier showed he was “malingering” or faking symptoms of his amnesia.

“According to our neurologist, there was no impairment in any of the memory centres in the brain,” said Cochrane.

Cochrane said Stanford does have other medical problems, including fatigue, insomnia and hepatitis B with cirrhosis of the liver, but that they do not prevent him from being tried.

But during his cross-examination of Cochrane, Stanford defence lawyer Robert Scardino tried to suggest the jail fight created injuries so traumatic they caused the financier’s “brain cells to slowly die” and those injuries combined with Stanford’s adverse reaction to the various medications have combined to keep him incompetent.

Scardino also suggested that neurological testing done to determine if Stanford was faking his amnesia could have been affected by Stanford’s depressed mood after the news of his liver disease, which the financier was told about a month before the testing was done.

Stanford and three former executives of his now-defunct Stanford Financial Group are accused of orc-hestrating a colossal pyramid scheme by advising clients from 113 countries to invest over $7bn in certificates of deposit at the Stanford International Bank on the Caribbean island of Antigua, promising huge returns.

Authorities say Stanford and the executives fabricated the bank’s records, bribed Antiguan regulators with investors’ money from a secret Swiss bank account and misused funds to pay for Stanford’s lavish lifestyle.

Stanford became a billionaire whose financial empire stretched across the US, the Caribbean and Latin America.

Stanford has been in jail since being indicted in June 2009 by a federal grand jury in Houston.

After a superseding indictment in May, Stanford is facing 14 counts, including wire and mail fraud. He originally faced 21 counts.