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Appellate Practice

5th Circuit rejects convicted Ponzi schemer Allen Stanford's 299-page brief

The man convicted of running the second-largest Ponzi scheme in American history filed a 299-page pro se brief with the New Orleans-based 5th U.S. Circuit Court of Appeals, the Dallas Morning News and Vice collaboratively reported.

R. Allen Stanford, who is representing himself after firing his court-appointed attorney, had his lengthy appellate brief rejected when he filed it in September, the news report said, and had until Monday to refile at around half its length. PACER shows that Stanford had asked for permission to file a brief no longer than 60,000 words; the court granted permission, over prosecutors’ objections, to file a brief of no more than 30,000 words. The deadline to refile was Wednesday, but PACER shows Stanford won an extension to Oct. 22.

Stanford’s scheme took in as much as $5.5 billion and had more victims than any other American investment scheme in history, the news report said. So far, only $72 million has been repaid. Another $300 million is frozen in overseas accounts, pending appeal. The scheme was discovered in 2009, and Stanford was convicted in 2012 and sentenced to 110 years in prison.

In his rejected brief, Stanford made 15 arguments grouped into two categories. One set of arguments says the United States has no jurisdiction over the case because his bank was in Antigua and offered certificates of deposit, not “securities” as defined by U.S. law. Law professors told the publications that this argument may be rejected if the court believes Stanford’s company—based in Houston—had substantial enough U.S. ties.

The other set argues that Stanford was not competent to stand trial because he was badly beaten in prison while awaiting trial. Stanford received eight months of treatment after suffering injuries that included a concussion, broken bones and nerve damage in his face. A psychologist eventually said Stanford was malingering, and the trial commenced.

Stanford’s appeal said his injuries “profoundly affected [my] ability to communicate with [my] attorneys and prepare [my] defense.”

An attorney for Stanford during his trial said the beating could be his strongest grounds for a new trial.

“It’s really a shame that a trained and talented appellate attorney didn’t get their hands on the trial record,” said Ali Fazel of Houston’s Scardino & Fazel. “There were lots of issues preserved in the record that would give a trained appellate lawyer a lot of room to work.”