A judge has revoked bond for Texas financier R. Allen Stanford, who's charged with swindling investors out of $7 billion.
U.S. District Judge David Hittner on Tuesday approved a request by prosecutors to overturn a magistrate judge's decision to allow Stanford freed on $500,000 bond pending his trial.
It was not immediately known if Stanford's attorneys would appeal the decision.
Hittner's written decision came after a four-hour court hearing on Monday.
Prosecutors, who appealed last week's decision to grant Stanford a bond, told Hittner the financier is a serious flight risk because of his international ties — including holding dual U.S. and Antiguan citizenship, having an international network of wealthy acquaintances and possibly having access to vast wealth hidden around the world.
Prosecutor Gregg Costa argued these international ties differentiate him from other high-profile fraud defendants, including former Enron Corp. executives Jeffrey Skilling and Ken Lay, who were freed on bond before their trials.
But Dick DeGuerin, Stanford's attorney, says his client is penniless, has never tried to flee and wants to fight the charges against him.
If not for Hittner's decision, Stanford would have been released from custody on Friday, as court records show the $100,000 in cash needed for his bond had been paid.
"Allen Stanford has been spending the months since [the U.S. Securities and Exchange Commission] first accused him meeting with lawyers in Houston and Washington, D.C., preparing for the fight ahead of him," DeGuerin wrote in an e-mail to the Associated Press. "I'm confident that when the truth comes out a fair jury will find that Allen Stanford did not defraud anyone."
Stanford and three executives of Houston-based Stanford Financial Group are accused of orchestrating a fraud by misusing most of the $7 billion they advised clients to invest in certificates of deposit from the Stanford International Bank in Antigua.
U.S. Magistrate Judge Frances Stacy granted Stanford's bond on Thursday after a nearly day-long detention hearing, but she delayed enforcement of her order until prosecutors could appeal. Stacy also ordered GPS monitoring and home detention for Stanford.
Friday morning, prosecutors asked Hittner to block Stanford's release until the judge can review the bond decision.
Prosecutor Paul Pelletier argued that Stanford might have access to billions of dollars in unaccounted investor funds, including some in a secret Swiss bank account. Pelletier also said the financier faces a potential life sentence if convicted and has an international network of wealthy acquaintances who would help him. The prosecutor said Stanford failed to tell authorities about his Antiguan passport after his arrest.
"There is no condition or combination of conditions that would eliminate these risks and ensure his appearance for trial," the motion said.
The money for Stanford's bond came from his family and friends.
Golfer Vijay Singh offered to help pay the bond, but federal rules did not allow it because Singh, a citizen of Fiji, is not a U.S. citizen. Singh has an endorsement deal with Stanford Financial reportedly worth $8 million. Although no longer being paid, Singh has continued to wear the Stanford logo on his visor and shirt.
Stanford pleaded not guilty Thursday to charges filed last week in a 21-count indictment.
Stanford Financial Group executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, also entered not guilty pleas.
Jury selection in the trial of Stanford and the others was set for Aug. 25 but will likely be delayed.
Also indicted is Leroy King, the former chief executive officer of Antigua's Financial Services Regulatory Commission. King is free on bond after being arrested Thursday. His attorney said Friday he is under house arrest as the Caribbean island processes a request for his extradition to the United States.
King is accused of accepting more than $100,000 in bribes to turn a blind eye to irregularities.
Stanford and his co-defendants are charged with wire fraud, mail fraud, conspiracy to commit mail, wire and securities fraud and conspiracy to commit money laundering.
Stanford, Pendergest-Holt and King are also charged with conspiring to obstruct a Securities and Exchange Commission investigation and obstruction of an SEC investigation.
Investigators say even as Stanford claimed healthy returns for those investors, he was secretly diverting more than $1.6 billion in personal loans to himself.
The indictment also says Stanford and the other executives misrepresented the Antigua island bank's financial condition, its investment strategy and how it was regulated.
The SEC filed a lawsuit in February accusing Stanford and his top executives of committing crimes similar to those in the indictment.