FORT WORTH - Gary Reeder, who has been accused by federal regulators of operating an illegal pyramid scheme, may end up defending himself in court.

At a hearing yesterday, U.S. District Judge Terry Means approved a request from the lawyers representing Reeder and his wife, Sandra, to withdraw from the case.

At the same time, Means told Reeder that he can't use more money from his former clients in the Cornerstone Prodigy Group for his defense.

Thomas Brandon, a Fort Worth lawyer, told Means that he and his colleague, Wayne Whitaker, had agreed to withdraw, citing a conflict with Reeder over his defense.

Brandon also said that legal costs had already consumed much of the $25,000 in Cornerstone Prodigy funds that Means had previously ruled could be used for the defense.

The Securities and Exchange Commission filed a fraud lawsuit against the Reeders on Nov. 24 and obtained a court order allowing agents to seize the assets of Cornerstone Prodigy on the grounds that it was a Ponzi scheme. No criminal charges have been filed.

David Michael, a San Francisco lawyer, told Means yesterday that he was considering representing the Reeders but that he would need much more money for an adequate defense.

Means responded that to approve the "use of investor funds to defend what is, on the face of it, an illegal scheme to defraud those investors ... is fraught with ethical and moral problems."

Michael countered that no investors have complained of being fraud victims.

But that did not sway the judge. Means said that no evidence had been presented to counter the government's allegations.

Stephen Korotash, an SEC lawyer, said that, because Reeder claimed he had received a $1 million contract for a book and movie, no additional money should be provided for the defense.

But Brandon said "there is no real hard evidence" that Reeder has "a big publishing contract."

Reeder, when asked to speak by Means, said that, if he is unable to hire new lawyers, he is prepared to defend himself.

Means gave Reeder until noon Monday to let the court know whether he had been able to hire new lawyers or would represent himself.

Bob Cox, (817) 548-5534 rcox@star-telegram.com