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Allen Stanford lawyers want out just before trial

By Jonathan Stempel

(Reuters) - Just 12 days before jury selection is to begin in a much-delayed case, lawyers for Allen Stanford, accused of running a $7.2 billion Ponzi scheme, have asked to withdraw from the case.

The request by Ali Fazel and Robert Scardino is the latest twist in a case in which Stanford, once believed to be a billionaire but who later claimed to be indigent, has employed roughly 14 different lawyers, and spent several months under medical care after being ruled incompetent to stand trial.

Fazel and Scardino, who were appointed by the court and are being paid with public funds, had previously sought to delay jury selection beyond the scheduled January 23 date.

In a joint filing on Wednesday with the U.S. District Court in Houston, they said rulings by the presiding judge David Hittner, budget matters and non-public issues make it "untenable" for them to stay on the case.

"The time and budgetary constraints imposed on defense counsel have operated to deprive the accused of counsel who are adequately prepared to render the constitutional threshold of effective assistance," they said. "Counsel cannot represent the accused competently."

A spokeswoman for the U.S. Department of Justice declined to comment.

It is unclear whether Hittner will grant the withdrawal request.

On December 28, he called the public interest in a speedy trial "particularly acute," citing charges that Stanford caused billions of dollars of losses and noting that the defendant has been in detention for 2-1/2 years since his June 2009 arrest.

"This case needs to be tried," he wrote.

Prosecutors accused Stanford of deceiving thousands of investors into buying bogus certificates of deposit from his Antiguan bank, Stanford International Bank Ltd.

The defendant faces a 14-count indictment in one of the largest white-collar fraud cases since Bernard Madoff was arrested in December 2008 for his Ponzi scheme, in which older investors are paid with money from newer investors.

Stanford also faces civil fraud charges by the U.S. Securities and Exchange Commission in a separate case.

Former SEC lawyer Spencer Barasch is expected, without admitting wrongdoing, to settle Justice Department civil charges over an apparent conflict of interest when he did some work for Stanford after leaving the Commission, people familiar with the matter have said.

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

(Reporting by Jonathan Stempel in New York; Additional reporting by Anna Driver in Houston, and Sarah N. Lynch, Jeremy Pelofsky and Aruna Viswanatha in Washington, D.C.; Editing by Bernard Orr)

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