HOUSTON (CN) - A federal judge ordered a hung jury to keep deliberating charges that Allen Stanford ran a $7 billion Ponzi scheme.
Stamford moved for an Allen Charge to continue jury deliberating after jurors told U.S. District Judge David Hittner on Monday afternoon that they could not agree on all 14 counts against Stanford.
Monday marked the fourth day of deliberations in the government's criminal fraud case involving Stanford's Antigua-based Stanford International Bank.
Earlier in the day the jury, made up of eight men and four women, posed two questions to the court.
First the jury asked for a definition of "CDO," leading Hittner to answer that the definition of CDO in this case is "collateralized debt obligations."
Defense attorney Ari Fasel argued that Hittner should further describe the abbreviation by likening it to "subprime loans."
Prosecutor William Stellmach urged Hittner to "just let CDO stand on its own."
The jury's second question centered on the testimony of a government witness about gifts regulators can receive from banks under Antiguan law. The jury asked the court to clear up what laws were in affect in 2005-06 regarding gifts given to regulators.
At the request of both the defense and prosecution, Hittner called the jury into his courtroom to read back the testimony.
"The laws of Antigua put a limit on gifts ... at less than $50," Hittner read.
Prosecutors say Stanford and company paid auditors, including the head of the Antiguan Regulatory Commission, bribes since in 2005 to cover up the scheme and mislead the SEC.
In a third question Friday, the jury asked for a definition of "scheme" as it applies to the government's 14-count indictment against Stanford on fraud, money laundering, obstruction and conspiracy charges.
At 10:30 a.m. Monday morning, Allen Stanford was led into Hittner's courtroom for the jury's questions wearing a dark blue suit, and tieless blue shirt.
He flashed a peace sign to his family members filing into the courtroom, even as prosecutors rolled a cart into the room with 14 numbered binders of evidence in the case.
Stanford later turned to a family member seated in the front row and traded a thumbs up with her.
In February 2009 the Securities and Exchange Commission charged Stanford and three of his companies with orchestrating the multibillion dollar Ponzi scheme, and ripping off nearly 30,000 investors from 113 countries.
The commission froze his companies' assets and appointed a receiver to recover assets for investors.
The SEC claimed that Stanford's Antigua-based bank perpetrated the fraud by selling certificates of deposit with unsubstantiated high interest rates. These rates were allegedly earned through SIB's unique investment strategy, which supposedly allowed the bank to achieve double-digit returns on its investments for 15 years.
The SEC also charged Stanford International Bank's chief financial officer James Davis, R. Allen Stanford's college roommate, and Laura Pendergest-Holt, chief investment officer of Stanford Financial Group.
In addition the government accused Stanford of diverting $1.6 billion from the CDs to personal loans.
Stanford, 61, has been jailed since June 17, 2009, when he turned himself in to the FBI in Houston hours after a grand jury returned the sealed indictment.
Stanford's long-anticipated trial was delayed after another inmate broke bones in his face and gave him a concussion in a fight over a telephone at a Houston federal jail on September 24, 2009. A judge later found that a brain injury Stanford suffered in the fight made him incompetent to help his defense.
Stanford also claimed that government doctors had overmedicated him with high dosages of Klonopin, an anti-anxiety drug, for more than 13 months after the fight.
In February 2011 Stanford was sent to a federal prison hospital in Butner, N.C., where he was treated for drug dependency and evaluated for any long-term injuries from the jailhouse fight.
Stanford returned to Houston federal prison in November 2011, and U.S. District Judge David Hittner ruled Stanford mentally competent to stand trial the following month.
Stanford's defense tried to get the trial delayed by claiming he cannot remember some of the events in his life before the 2009 prison fight.
But a forensic psychologist who treated Stanford at the prison hospital testified that he was competent the following month
Stanford's trial started on Jan. 23 after he pleaded not guilty to the 14-count indictment.
During the trial the prosecution's star witness, Stanford's former chief financial officer, James Davis, testified that Stanford orchestrated the fraud.
Davis pleaded guilty in August 2009 to charges of fraud and obstruction of justice related to the alleged Ponzi scheme.
Stanford's defense attorneys accused Davis of lying to get a reduced sentence, and also argued Stanford International Bank was legitimate and could have paid back investors if the government had not closed it down, according to news reports.
Forbes listed Stanford as one of the world's richest people with a personal fortune valued at $2.2 billion, rising to those heights from his previous job as a "former bankrupt gym owner from Mexia, Texas."
Mexia is a town of 6,600 southeast of Dallas where Stanford's father still lives.
Stanford reportedly amassed his fortune by operating off-shore banks.
Antigua knighted Stanford, who bought a local airline, a newspaper, two restaurants and a cricket stadium where he campaigned to revive the sport in the Caribbean, according to The New York Times.
With his corporate and personal assets seized by federal regulators in a parallel civil fraud case, U.S. District Judge David Hittner declared Stanford indigent and gave him taxpayer-funded attorneys.
If the jury convicts on any of the 14 counts against Stanford, they will next determine whether the government can seize 36 Stanford-related bank accounts in the Caribbean, London, Switzerland and Florida, according to the Houston Chronicle.
Stanford faces up to 20 years in federal prison if convicted of all 14 counts in the indictment.
Jury deliberations continue Tuesday at 9:30 a.m.