Billionaire to be freed on bond

HOUSTON (AP) — A judge says Texas billionaire R. Allen Stanford may be freed on bond.

Stanford pleaded not guilty Thursday to charges he swindled investors out of $7 billion as part of a massive investment scam.

Two family members and a friend have agreed to pay $500,000 if Stanford fails to make any court appearances.

The agreement also calls for them to leave a $100,000 cash deposit. Stanford also will be required to participate in a GPS location monitoring program.

Stanford entered his plea during his arraignment in federal court. The financier was indicted on charges that his international banking empire was really just a colossal Ponzi scheme.

Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, three executives with the now defunct Houston-based Stanford Financial Group who were indicted along with their former boss, also entered not guilty pleas.

At a bond hearing shortly after the executives’ arraignment, prosecutors argued that Stanford should be held without bond as he awaits trial on fraud charges because he might have access to billions of dollars in secret funds.

Prosecutor Paul Pelletier said investigators found a secret Swiss account Stanford controlled that was drained of more than $100 million in December 2008.

Jeffrey Ferguson, a forensic examiner hired to review the records of Stanford Financial Group and its affiliated bank on the Caribbean island of Antigua, testified that nearly $1.2 billion of the $7 billion Stanford and his co-defendants are accused of bilking from investors can’t be accounted for.

In court documents filed Thursday, prosecutors also said Stanford faces a potential life sentence, has access to a private jet and has an international network of wealthy acquaintances who would help him, including one who recently agreed to give him $36,000 to pay his lease on a Houston apartment for a year.

Dick DeGuerin, Stanford’s attorney, objected to Pelletier characterizing the account as secret, saying it was known to Stanford’s employees.

“It’s just wrong and it’s designed to prejudice potential jurors who will hear this case,” DeGuerin said.