December 21, 2011 / 9:33 PM / in 6 years

Stanford's memory impaired, witnesses say

HOUSTON (Reuters) - Allen Stanford is suffering from brain injury and memory loss, witnesses said on Wednesday at a hearing on whether the accused swindler can stand trial.

Stanford is accused of using a $7 billion Ponzi scheme to defraud people who invested with him. His lawyers argue he is not competent to go to trial as scheduled on January 23 because a jailhouse fight has left him with severe memory loss.

“His symptoms and syndrome are characteristic of an individual who has sustained a traumatic brain injury,” defense witness Ralph Lilly testified.

Lilly, a specialist in behavioral neurology, said Stanford’s memory loss could be improved with medication, but is likely permanent.

Stanford, 61, sat quietly at the defense table during Wednesday’s proceedings. Judge David Hittner allowed his handcuffs to be removed so Stanford could take notes to communicate with his lawyers.

The court also heard testimony from Victor Scarano, a forensic psychologist who said Stanford was suffering from post-traumatic stress disorder stemming from the jailhouse beating.

“Mr. Stanford is not competent to stand trial today,” Scarano said.

Much of the testimony centered on medical standards and definitions of post-traumatic stress disorder, memory loss and depression.

In cross examination, a government lawyer said Lilly’s conclusions were inconsistent with widely used medical literature.

Stanford once owned luxury homes in the Caribbean, Houston and Miami. He was arrested in June 2009 and has been indicted on charges of fraud, conspiracy and money laundering stemming from the alleged Ponzi scheme. A Ponzi scheme is a fraud in which existing investors are paid with the deposits of newer ones.

Stanford has pleaded not guilty.

On Tuesday, the first day of the hearing, prison psychologist Robert Cochrane, testifying for the government, said Stanford was competent to stand trial.

Cochrane said it would be “incredibly rare” for a person to suffer memory loss that would prevent him from recalling key events from his life before the 2009 fight.

The case is U.S. v. Stanford, U.S. District Court, Southern District of Texas. No. 09-00342.

Reporting by Eileen O'Grady; editing by Eddie Evans and Andre Grenon

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