Ryan J. Reilly January 26, 2011, 11:00 PM

Texas billionaire Allen Stanford, who allegedly defrauded investors of millions of dollars in a vast offshore Ponzi scheme, isn’t currently competent to stand trial, a federal judge ruled Wednesday.

However, Stanford wouldn’t be released to a mental facility, as his lawyers had requested. Instead, U.S. District Judge David Hittner recommended that the Attorney General have Stanford moved to a federal facility with suitable medical capabilities to deal with his reported traumatic brain injury, addiction to an anti-anxiety medication and major depressive disorder.

“In light of the testimony presented and the reports submitted by the three psychiatrists - including the Government’s own expert, Dr. Rosenblatt - the Court has no viable alternative but to find that Stanford does not have the present mental capacity to effectively assist his attorneys in preparing his defense,” writes Hittner.

“It is not lost on the court that Stanford’s motion to be released to a local mental facility for treatment may be yet another attempt by Stanford to be released on bond,” Hittner writes. “The Court’s finding that Stanford is incompetent, however, does not alter the Court’s finding that Stanford is a flight risk and that no combination of conditions of pretrial release can reasonably assure his appearance at trial.”

Hittner recommends that “the Attorney General send Stanford to a medical facility within the Bureau of Prisons, such as the Federal Medical Center in Butner, North Carolina or to another suitable facility.”

The judge also admonished both federal prosecutors and Stanford’s lawyers “to diligently prepare this case to proceed to trial notwithstanding Stanford’s absence.”

Additional reporting by Alex Sciuto.

Allen Stanford