(Bloomberg News) R. Allen Stanford is being moved to a prison hospital for treatment of an anxiety-drug habit the Texas financier acquired in jail while awaiting trial on charges that he swindled investors of $7 billion.

"He is being transferred," said Chris Burke, a spokesman for the U.S. Bureau of Prisons. Stanford shipped out Feb. 14 from the federal lockup in Houston, where he has been detained as a flight risk since his arrest in June 2009.

Stanford, 60, denies all wrongdoing in connection with criminal and civil allegations that he cheated investors through a Ponzi scheme built on certificates of deposit issued by Antigua-based Stanford International Bank Ltd. Prosecutors claim the bank paid early investors "improbable, if not impossible" rates of return by taking funds from later CD buyers.

Stanford was scheduled to face a jury on 21 criminal counts last month in federal court in Houston, until U.S. District Judge David Hittner indefinitely postponed the trial after finding Stanford mentally unfit to rationally assist with his defense.

Hittner, in a Jan. 26 ruling, recommended Stanford be transferred to a prison hospital "such as the federal medical center in Butner, N.C."

The Butner medical facility is part of the same prison complex where Bernard Madoff is serving a 150-year sentence after admitting in March 2009 to running a Ponzi scheme in which investors lost as much as $20 billion in principal.

Drug Dependent

Three psychiatrists told Hittner that Stanford was incapable of participating in his own defense. They testified that Stanford has grown dependent on anti-anxiety and depression medications that were over-prescribed to him by the prison's medical staff.

The doctors also said Stanford may suffer lingering effects from a jailhouse beating that left him with a concussion and broken facial bones in September 2009.

Hittner ordered Stanford weaned from the drugs in a hospital run by the U.S. prison system and evaluated for continuing mental problems related to the concussion. Hittner told lawyers on both sides to continue to prepare for trial, which will be rescheduled once Stanford is determined to be medically competent to assist in his defense.

Prisoner Movements

Stanford's lawyer, Ali Fazel, declined to discuss his client's whereabouts, citing a court order banning public discussion of the case. Burke declined to identify Stanford's destination, citing prison bureau policy against discussing prisoner movements.

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