Legal News

DeGuerin on Stanford: ?This is Not a Ponzi Scheme?

By Ashby Jones

If and when alleged fraudster R. Allen Stanford frees up some money for his legal defense, it looks like some of it will make its way into the pocket of Dick DeGuerin, a celebrated Houston criminal defense lawyer whose clients have included Branch Davidian leader David Koresh, former House Majority Leader Tom DeLay and, more recently, U.S. District Judge Samuel Kent.

According to recent news accounts, Stanford and DeGuerin have been in touch, and are looking for a way to partner up. "It's a matter of having been engaged and not retained," said DeGuerin to the Chron.

The SEC has charged Stanford with effectively running an $8 billion Ponzi scheme. Stanford has not been criminally charged.

DeGuerin, whose Web site claims that he handles all types of cases, “from the large and complex felonies to misdemeanors,” came out swinging at a recent interview with Business Week.

“This is not a Ponzi scheme,” DeGuerin told the magazine. “The SEC is using Stanford as a distraction from its failures in Madoff. This is not Madoff.” DeGuerin added: “There are hard assets for every dollar invested” with Stanford’s offshore bank in Antigua, says DeGuerin. “The losses in the Stanford case are right in line with the stock market.”

The SEC, in its civil complaint, alleged that Stanford took at least $1.6 billion in personal loans from his offshore bank and deceived investors about the assets the bank was investing in. The SEC alleges the high yields on the certificates of deposit sold by Stanford International Bank were deceptive and unsustainable.

“We’ll let the complaint speak for itself,” SEC spokesman John Nester told Business Week.

Thing is, whether DeGuerin is allowed to fully unleash his lawyerly powers depends in no small part on whether he can get a federal judge to unfreeze some of Stanford’s reported $2.2 billion in assets. Click here for an earlier Law Blog post on Stanford’s difficulty in hiring a lawyer.

The aggressive tack being taken by DeGuerin is not uncharacteristic. Houston attorney Philip Hilder, a former federal prosecutor and criminal defense lawyer, told Business Week: “Dick is very aggressive and thorough, and he will make the government work.”

Meanwhile, Stanford’s top deputy, Jim Davis, the company’s former chief financial officer, is now cooperating with authorities, according to his lawyer, David Finn. It could bode ill for Stanford himself.

DeGuerin, however, seemed unconcerned. Said DeGuerin to Business Week: “If he tells the truth, it doesn’t concern us.”

Full post as published by Law Blog - WSJ.com on March 27, 2009 (boomark / email).