D&O insurer threatened

US federal prosecutors have threatened Allen Stanford’s directors and officers (D&O) insurers with contempt proceedings if they pay for him to mount a defence, Reuters reports.

Stanford’s lawyer claims the government has cut off his access to funds for a legal defence.

"The government's unfettered, and thus far successful, attempts to prevent Mr. Stanford from being able to mount a defence in his criminal proceedings amount to a deprivation of both his Sixth Amendment right to counsel and his Fifth Amendment privilege against self-incrimination," Dick DeGuerin, Stanford's criminal attorney wrote in a court filing.

Reuters said Stanford and two fellow directors were covered by "directors and officers" insurance policies, but the government has said it has a right to those funds and have threatened underwriters with contempt proceedings, court papers show.

DeGuerin told Judge Hittner last week that Stanford was broke after the government swooped in a seized his bank accounts, jets and luxury homes.