(Reuters) - By Eileen O'Grady
HOUSTON, Dec 21 (Reuters) - Allen Stanford clearly suffered a brain injury that has impaired his judgment and memory, a neurologist testified on Wednesday, the second day of a hearing on whether the accused swindler can stand trial on Ponzi allegations.
Stanford's lawyers argue that a jailhouse fight and anti-anxiety medication have left him with no memory and therefore he is not competent to go to trial as scheduled on January 23.
"He does suffer from brain injury," said defense witness Ralph Lilly, a specialist in behavioral neurology. "He has no real understanding of the deficits he has."
Stanford, 61, sat quietly at the defense table during Wednesday's proceedings and had little communication with his lawyers. Judge David Hittner allowed his handcuffs to be removed so Stanford could take notes.
On Tuesday, the first day of the hearing, the court heard from prison psychologist Robert Cochrane, who said that Stanford was competent to stand trial.
Cochrane said it would be "incredibly rare" for a person to suffer memory loss that would prevent him from recalling key events from his life before the 2009 fight.
Stanford once owned luxury homes in the Caribbean, Houston and Miami. He was arrested in June 2009 and has been indicted on charges of fraud, conspiracy and money laundering. He has pleaded not guilty.
Prosecutors say he ran a $7 billion Ponzi scheme that bilked investors throughout the United States and Latin America. A Ponzi scheme is a fraud in which existing investors are paid through deposits from newer ones.
While prosecutors have called only Cochrane, Stanford's lawyers plan to call two more medical witnesses on Wednesday. On Tuesday, the first defense witness, neuropsychologist Richard Lawrence Pollock, testified that because of his brain injury Stanford would not be capable of taking part in a trial.
"Mr. Stanford would have a very difficult time assisting an attorney at trial," Pollock said.
The case is U.S. v. Stanford, U.S. District Court, Southern District of Texas. No. 09-00342.
(Reporting by Eileen O'Grady; Editing by Eddie Evans)