Sir Allen Stanford in Prison Jumpsuit and Leg Irons

timesonline (David J. Phillip/PA)

Allen Stanford, the Texan billionaire and Twenty20 cricket impresario, pleaded not guilty yesterday to charges that he ran a $7 billion (£4.2 billion) pyramid scheme.

The moustachioed tycoon, once seen as the saviour of English cricket, appeared in the federal court in Houston in an orange prison jump-suit and shackles after spending the weekend in jail.

Dick DeGuerin, his lawyer, said that Mr Stanford had had a difficult time since surrendering to FBI agents at his girlfriends house in Virginia last week.

Hes been held incommunicado since Friday and hes been transferred to five jails in four days, Mr DeGuerin said. Hes not been allowed to use the phone. He has had no sleep.

Mr DeGuerin disclosed in a court filing that Mr Stanford — once ranked the 605th richest person in the world with more than $2 billion — had been taking anti-anxiety medication.

He said that the disgraced financier had began drinking heavily to self-medicate his depression and anxiety after he was hit with civil fraud charges in February, before being prescribed Ativan.

Mr Stanford, a fifth-generation Texan from the small town of Mexia, became a larger-than-life figure with homes in the Caribbean, a castle in Miami and a fleet of private aircraft.

He pioneered Twenty20 cricket by sponsoring last years $1 million-a-man match between England and a Caribbean team, the Stanford Superstars — a contest that he promoted by landing a helicopter at Lords.

The Caribbean island of Antigua, where his Stanford International Bank was based, became his virtual private fiefdom and he received a knighthood from the islands government.

Mr Stanford is accused of swindling up to 30,000 investors by selling them supposedly safe certificates of deposit with high rates of return issued by the bank, which vastly exaggerated its assets. He faces up to 375 years in jail if convicted of fraud, money laundering and obstruction of justice.

Mr DeGuerin asked the court to free Mr Stanford on bail pending trial, arguing that he has always showed a strong character and solid work ethic. He said that Mr Stanford had established a new residence in Houston in preparation for the trial.

Prosecutors said that Mr Stanford represented a flight risk and should be remanded in custody.

The Antigua bank regulator, Leroy King, was arrested in the island yesterday. Mr King was placed on leave in March and this week dismissed as administrator of the islands Financial Services Regulatory Commission. Police said that he faces extradition to the US, where he is wanted for taking bribes from Mr Stanford in return for giving his bank a clean bill of health.

American prosecutors allege that Mr King received more than $100,000 in secret cash payments from Mr Stanford and transferred $560,000 from his New York investment account to Antigua when he learnt of the US investigation this year.

Three other Stanford Financial Group executives — Laura Pender- gest-Holt, Gilberto Lopez and Mark Kuhrt — also entered not-guilty pleas.

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[belltocher]

This guy has billions, this jail he is going to is prob in the Bahamas and has drivers, butlers, Co ed of course. Prob the only prison with a wine celler. Day prorole, every day,golf course.need I go on?

[lancerhammer]

you know, maybe they should just released him. let his victims get "close" to him. with him behind bars, none of his victims can get "intimate" with him and "demand" what he had done