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 Alleged fraudster R. Allen Stanford may have finally found an attorney to represent him -- that is if he can find the funds to pay well known Houston lawyer Dick DeGuerin. DeGuerin has represented a number of big-name clients, including former Republican House Majority Leader Tom DeLay and Branch Davidian cult leader David Koresh. DeGuerin didn't waste anytime on the job. He started work by blasting the Securities and Exchange Commission as he prepares to defend his latest high-profile client. "This is not a Ponzi scheme," DeGuerin said of Stanford, who is accused of orchestrating an $8 billion investment fraud along with his chief financial officer, James M. Davis, and chief investment officer, Laura Pendergest-Holt. In an interview with BusinessWeek's Matthew Goldstein, DeGuerin accused the SEC of "using Stanford as a distraction from its failures in [Bernie] Madoff." He also said Stanford did not perpetrate a Ponzi scheme and there "are hard assets for every dollar invested" with Stanford's offshore bank in Antigua. "The losses in the Stanford case are right in line with the stock market." Meanwhile DeGuerin compared the SEC to "a bunch of Storm Troopers" who raided Stanford's offices last month, causing investors to panic. 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. Meanwhile, Stanford co-defendant Davis, who initially invoked his Fifth Amendment right against self-incrimination, met Thursday with investigators in the case. Afterward, his lawyer depicted him as a "whistle blower," according to Bloomberg. "Jim is fully and actively cooperating, and trying to get investors who lost their money some help," said attorney David Finn. "He's absolutely devastated, because he knows a lot of good people got hurt." Stanford and Davis haven't yet been criminally charged, but co-defendant Pendergest-Holt was arrested Feb. 26 on charges of obstructing the probe. She is now free on bail. DeGuerin will no doubt try to get a federal judge to unfreeze some of Stanford's reported $2.2 billion in assets, so he can pay for his legal defense. Legal experts say courts will sometimes unfreeze assets, especially in a criminal case, to give a defendant a chance to defend himself adequately. But in the case of another alleged fraudster, Arthur Nadel, U.S. District Judge Richard Lazzara recently denied the motion for payment of attorneys fees filed by his lawyers. If the firm does not continue to represent Nadel, he can ask for a court appointed attorney. Both
Nadel and convicted Ponzi scheme mastermind Madoff are currently in
the same maximum security prison at the Metropolitan Correctional
Center in New York. - Donna Block
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