HOUSTON (Bloomberg) - R Allen Stanford, the accused Ponzi mastermind, will not be released from jail before his fraud trial in 2011, a US judge ruled after reviewing a doctor's report that the financier is close to "a complete nervous breakdown".

Attorneys for Stanford, who faces 21 criminal counts for allegedly swindling investors out of more than $7 billion, asked US District Judge David Hittner in Houston to reconsider his earlier ruling denying bail out of concern the defendant might flee. They submitted reports from two psychiatrists who examined Stanford, 59, and found him suffering from severe depression triggered by his incarceration under conditions that render him unable to help in his defense.

"Having considered the motion along with the exhibits attached thereto, and the applicable law, the court determines the motion should be denied," Hittner wrote in an order on Wednesday.

Stanford has been jailed since his arrest on June 19 and is in a federal detention centre in downtown Houston. Stanford's lawyers said in a December 21 filing that one of the psychiatrists determined that the financier's mental and physical health had deteriorated sharply.

"If the present set of circumstances persist, Mr. Stanford's spiralling downhill course will continue to the point where he will suffer serious physical disorders and, more likely than not, a complete nervous breakdown," the doctor's report concluded, according to the filing.

Stanford and three former top executives at Stanford Financial Group are charged with running a Ponzi scheme that paid above-market rates to early investors by taking money from later investors in certificates of deposit sold by Antigua-based Stanford International Bank Ltd. Stanford is accused of skimming about $1.6 billion from depositors.

Stanford faces spending the rest of his life in prison if he is convicted at a trial set to begin in January 2011. The financier denies all wrongdoing in connection with both the criminal case and the parallel fraud lawsuit filed against him and the same associates by the US Securities and Exchange Commission.