October 14, 2010 – Just a few months before his criminal trial for fraud, disgraced financier Allen Stanford has suffered a serious blow as a judge rules he cannot use US$100 million of Lloyd’s of London directors and officers insurance coverage to pay lawyers to defend him.

US District Judge Nancy Atlas handed down her judgment yesterday, following a four-day trial in August, indicating that lawyers for the insurance company had proven that it was likely that Stanford had committed money laundering and therefore excluded him from coverage.

The ruling also affects former Stanford accounting executives Gilbert Lopez and Mark Kuhrt.
 
However, the judge made it clear that she was not making any pronouncements on Stanford’s guilt and her findings in this case “are neither final findings of fact nor conclusions of law” for use in the criminal case or the civil case built against Stanford and the other executives.
 
Stanford faces 21 counts of fraud when his trial begins on January 24, 2011. The charges stem from the alleged US$8 billion fraud conducted through the Stanford International Bank (SIB) in Antigua.

His attorney, Robert Bennett, told Bloomberg that Judge Atlas’ decision was “disappointing, but not unexpected”. He also told the publication that he would probably not appeal the ruling and would instead apply to be assigned Stanford’s court-appointed counsel.

If he is assigned the court-appointed lawyer, Bennett would be paid by the government at a rate of US$125 an hour, a far cry from the US$1,000 an hour which Lloyd’s said the attorney had been charging.