HOUSTON -- If Texas tycoon R. Allen Stanford testifies in his ongoing fraud trial, it could be the most important sales pitch he has ever made.
With his freedom on the line, some legal experts question if the gamble of testifying is worth the risk that the larger-than-life businessman might come across as arrogant due to a jet-setting lifestyle that wouldn’t connect with jurors. Of even greater concern is that he wouldn’t be able to give a plausible explanation for what happened to the billions in investor funds he’s accused of taking.
"I think it would be a horrible idea for him to testify. I think prosecutors are licking their chops hoping he would be foolish enough to testify," said Andrew Stoltmann, a Chicago-based attorney who specializes in investment fraud and has been following the trial. "Jurors want to hear from the defendant. But the downside is the prosecution gets to use him as a piata for a couple of days on the stand."
Prosecutors rested their case Wednesday after spending three weeks presenting evidence. They allege the flamboyant businessman orchestrated a 20-year scheme that bilked more than $7 billion from investors through the sale of certificates of deposit from his bank on the Caribbean island nation of Antigua. They also allege Stanford lied to depositors by telling them their funds were being safely invested but instead spent it on his businesses and in support of his lavish lifestyle.
Defense attorneys have tried to show the financier was a savvy businessman whose financial empire, headquartered in Houston, was legitimate. They said he was trying to reorganize his businesses to pay back investors when authorities seized his companies.
Stanford is on trial for 14 counts, including mail and wire fraud, and could be sentenced to more than 20 years in prison if convicted. Once considered among the U.S.’s wealthiest people with an estimated net worth of more than $2 billion, he has been jailed without bond since being indicted in 2009.
Defense attorneys had said at the start of the trial that Stanford would testify. But the defense’s list of 26 potential witnesses—made public Wednesday—did not include the financier.
That doesn’t necessarily mean he won’t take the stand, but a gag order prevents attorneys from discussing the case.
Philip Hilder, a Houston criminal defense attorney and former federal prosecutor, said Stanford and his attorneys will have to decide if there are matters only the financier can clarify.
"It’s not a question of a client going out and just telling their story," Hilder said.
During the trial, Stanford’s attorneys have described him to jurors as a visionary and resourceful businessman. They also mentioned his philanthropic efforts in Antigua, where he had worked to improve facilities and build a high-end resort to make it the crown jewel of the Caribbean.
Prosecutors have tried to portray him as arrogant and controlling.
Former employees told jurors Stanford did not like to be questioned and chastised workers if they didn’t wear an eagle logo pin the financier designed. James Davis, the former chief financial officer of Stanford’s companies and the prosecution’s star witness, said Stanford controlled people through "money, flattery, intimidation and fear."
Hilder said Stanford’s attorneys would try to highlight his humble beginnings in the Central Texas town of Mexia, where his grandfather started an insurance business. Mexia, located about 85 miles south of Dallas, was also where the late Playmate Anna Nicole Smith lived for a few years as a teenager.
"The defense will try to portray him as a Texas country boy who grew up and did well, and the government is going to try to show him as elitist, out of touch," Hilder said.
Anthony Sabino, a law professor at St. John’s University in New York City, said just as Stanford’s defense attorneys tried to question Davis’ character by discussing his extra marital affairs, prosecutors would focus on the financier’s personal life, including his tax records and his history with various mistresses.
Another issue that could come up is Stanford’s competency. After hearing from medical experts, U.S. District Judge David Hittner declared him incompetent due to a prescription drug addiction while he was jailed awaiting trial. Stanford received treatment and was later determined to be competent, though his attorneys insist he still suffers from memory loss.
Hittner said he would not allow the competency issue to be discussed at trial.
"If he starts to go on cross exam and say, ‘I don’t’ remember,’ he’s cooking his own goose," Sabino said. "Juries don’t like to hear, ‘I don’t remember."’
Stoltmann said if Stanford testifies it will be the businessman’s "ultimate sales job" and will be successful if he can be charming and convince the jury Davis was behind the alleged fraud.
"But if he comes off as arrogant, conceited, I think it’s game, set and match," Stoltmann said.