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Stanford's Bail Revoked By Judge

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HOUSTON — A federal judge on Tuesday revoked the bond of Texas financier R. Allen Stanford, ordering he be kept in jail while he awaits trial on charges alleging he swindled investors out of $7 billion.

U.S. District Judge David Hittner issued an order overturning a magistrate judge's decision last week to allow Stanford to be free on $500,000 bond but be under GPS monitoring and home detention. Stanford has been in custody since being indicted and arrested June 18.

"The court determines that Stanford is a serious flight risk and there is no condition or combination of conditions of pretrial release that will reasonably assure his appearance as required for trial," Hittner wrote in his 13-page order.

Stanford's attorney, Dick DeGuerin, said he was disappointed with the decision and would appeal it to the 5th U.S. Circuit Court of Appeals in New Orleans.

A Justice Department spokesman did not immediately return a call seeking comment Tuesday.

In his order, Hittner said the arguments made by prosecutors during a four-hour hearing Monday weigh in favor of detention.

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.

Stanford and three executives of his now defunct Houston-based Stanford Financial Group are accused of orchestrating a massive Ponzi scheme by misusing most of the $7 billion they advised clients to invest in certificates of deposit from the Stanford International Bank in the Caribbean island of Antigua.

But DeGuerin said his client is penniless, has never tried to flee and wants to fight the charges against him. He denied prosecutors' claims Stanford has access to secret wealth stolen from investors and said his client ran a legitimate business.

DeGuerin also told Hittner his client, who hadn't resided in the U.S. in 15 years, now lives in Houston, has strong family ties here and on several occasions before his indictment tried to turn himself in to show he doesn't plan to be a fugitive.

"Stanford's family ties to Houston are tenuous at best and of recent vintage," Hittner wrote in his order.

Stanford was considered one of the richest men in America with an estimated net worth of more than $2 billion. But DeGuerin said his client's family and friends had to scramble to gather the $100,000 in cash needed for his bond.

Stanford and executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt pleaded not guilty last week to charges filed in a 21-count indictment.

Also indicted is Leroy King, the former chief executive officer of Antigua's Financial Services Regulatory Commission. King, accused of taking bribes from Stanford to overlook irregularities at his bank, is awaiting extradition to the United States.

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 investors, he was secretly diverting more than $1.6 billion in personal loans to himself which were used to pay for his lavish lifestyle, including six private jets, a helicopter and homes in Miami and St. Croix.

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.