Judge to rule on Stanford bail on Tuesday

By Anna Driver and Eileen O'Grady

HOUSTON (Reuters) - Allen Stanford will spend Monday night in jail after U.S. prosecutors told a federal judge that the accused swindler would likely flee the country rather than face life in prison if released on bail.

U.S. Magistrate Judge Frances Stacy last week said that Stanford, who faces criminal charges for a $7 billion ( 4.2 billion pound) Ponzi scheme, may leave federal custody, provided he comes up with a $500,0000 bond -- including $100,000 in cash -- and lives with his girlfriend in a Houston high-rise apartment.

But Stanford remains in custody after the U.S. Justice Department opposed bail of any sort and sought to keep him in jail until his trial, now set for August. Stanford, 59, faces life in prison if convicted of all 21 criminal charges.

Now U.S. District Judge David Hittner, who will preside over the upcoming criminal trial, must decide whether Stanford can walk free until his trial begins.

At a hearing on Monday, Hittner said he would decide on the government's motion to revoke Stanford's bond on Tuesday afternoon at the earliest.

Judge Hittner also raised the possibility that the losing side in the bond arguments might appeal his decision to the 5th Circuit Court of Appeals in New Orleans.

If his decision is appealed, it would be judged by the higher court as an "abuse of discretion issue," Judge Hittner told the court.

Both Dick DeGuerin, Stanford's lawyer, and Paul Pelletier, a federal prosecutor on the case, declined to comment on the possibility of an appeal.