Monday June 29, 08:12 PM

U.S. prosecutors to ask judge to keep Stanford in jail

By Anna Driver

HOUSTON (Reuters) - U.S. prosecutors who believe jailed Texas financier Allen Stanford is a serious flight risk will ask a federal judge on Monday to revoke the alleged swindler's $500,000 bail granted by a magistrate judge last week.

U.S. Magistrate Judge Frances Stacy said on Thursday that Stanford, who faces criminal charges for a $7 billion Ponzi scheme, may leave federal custody, provided he comes up with $100,000 for a cash bond, lives with his girlfriend in a Houston high-rise apartment and wears a tracking device.

But prosecutors, who believe the once high-flying sports patron will flee, appealed that order, asking U.S. District Judge David Hittner to review the matter.

On Friday, Hittner ordered that Stanford be held in custody at least until Monday's hearing at 10:30 a.m. CDT (1530 GMT), when the judge will consider whether to revoke the magistrate's release order.

Stanford was brought to Houston federal court for the third time early on Monday, dressed in his own clothes, but still shackled.

His lawyer, Dick DeGuerin, has argued that Stanford has demonstrated his willingness to answer the government's charges by offering to surrender three times. He also told the judge on Thursday that his client had been cut off from all financial resources by a court-ordered freeze of his assets.

At the hearing on Monday, Judge Hittner could rule that Judge Stacy's order should stand and Stanford may go free or he could stiffen the terms of Stanford's release.

Stanford, 59, pleaded not guilty to a 21-count indictment on Thursday. He has been locked up since June 18, when he surrendered to federal agents in Virginia.

The indictment lays out a scheme where Stanford and others falsified records and bribed regulators who had oversight of his offshore bank in Antigua, bilking the bank's certificate of deposit customers out of $7 billion.

Stanford also faces civil fraud charges filed by the U.S. Securities and Exchange Commission. The agency has also accused him of a "massive" Ponzi scheme where CD proceeds were used to pay earlier investors.

(Additional reporting by Steve Campbell in Houston)

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