Torts lawyer Richard “Dickie” Scruggs has long been famous or infamous depending on your view of his windfall, one billion fee award in the tobacco settlement. Now, the brother-in-law of Trent Lott will face a criminal trial on bribery and related charges with his son. To make matters worse, his legal team just withdrew from his defense.
Scruggs and four others, including his son and law partner Zach, were indicted Nov. 28 on charges they conspired to bribe a judge over disputed legal fees.
The lawsuit before Judge Lackey centered on a fight over the division of $26.5 million in legal fees. Jones, Funderburg, Sessums, Peterson & Lee PLLC, a law firm in Jackson, Miss., sued Mr. Scruggs for allegedly withholding money it claims it was owed for its work on Hurricane Katrina insurance-related litigation. The Jones law firm was part of the the Scruggs Katrina Group, a group of plaintiffs lawyers organized by Mr. Scruggs that represents policyholders in litigation related to the hurricane.The indictment alleges that Mr. Balducci paid Judge Lackey $40,000 to issue a ruling favorable to Mr. Scruggs and his law firm. Mr. Scruggs allegedly reimbursed Mr. Balducci the $40,000 to use for the bribe, and created false documentation to mask the payment as compensation for work on another case.According to the indictment, Mr. Balducci had a conversation with the judge in which he said “We, uh, like I say, it ain’t but three people in the world that know anything about this … and two of them are sitting here and the other one … the other one, uh, being Scruggs … he and I, um, how shall I say, for over the last five or six years there, there are bodies buried that, that you know, that he and I know where … where are, and, and, my, my trust in his, mine in him and his in mine, in me, I am sure are the same.”Once Judge Lackey received the $40,000 payment he issued a favorable order, according to the indictment.
The matter got far worse for Scruggs when one of Timothy Balducci, pleaded guilty Dec. 4 to conspiracy in the bribery case without the standard cooperation agreement.The withdrawal of counsel seems likely to be related to this aspect of the case. U.S. Dist. Judge Neal Biggers in Oxford has granted the withdraw motion of Joey Langston and Billy Quin of the Langston Law Firm -though no reason is given. This is common in such motions, which can be based on conflicts of interest, client misconduct, client dissatisfaction with counsel, or simple breakdowns in attorney-client miscommunication.However, Balducci was a partner at the Langston law firm and the FBI searched the Langston law firm in Booneville on Dec. 10th.
Scruggs has long been controversial due to the sweetheart deal that he struck on the tobacco litigation. He was given a contract from then former Attorney General Mike Moore. Scruggs was a friend of Moore and gave him a type of contingency arrangement — a terrible deal for the state that led to Scruggs demanding a reported $848 million.
Scruggs is a lively character and something of a legend in his area. He is a former fighter pilot who grew up dirt poor and seems to have made up for it considerably. When Time Magazine asked Scruggs about his upbringing, he explained that “We were so poor that if I hadn’t been a boy, I wouldn’t have had anything to play with.” He now makes up for the early absence of toys with a 120-ft. motor yacht and $300,000 Bentley convertible — among other distractions.
Beyond the interesting characters, the case could be interesting. The mysterious movement of $40,000 from pocket to pocket is not going to be missed by a jury. Scruggs is identified in the indictment as causing the transfer of the money to Balducci after he gave the money allegedly in a couple of payments to Judge Henry Lackey (an unfortunate name given the allegations). For a copy of the indictment, click here The indictment alleges that a favorable order was issued not long after delivery.
Moreover, the inclusion of a son in the indicted ranks can increase the pressure for a plea agreement by a father. Prosecutors are known to target family members to add such pressure and force the target to “do the right thing. Nevertheless, David Scruggs is cited as being present in meetings where the bribe was allegedly discussed in fairly open terms, though the indictment says that more cautious messages were used outside of face-to-face meetings.
The inclusion of a cooperating witness seems to have transformed the case. Scruggs is not without defenses, but such witnesses tend to be highly damaging at trial. Balducci is the worst possible witness for the Scruggs as the alleged bagman in the scheme. At a minimum, the trial will again focus attention on the Mississippi bar, which has taken quite a drumming since the Scruggs windfall and later controversies over special dealing between lawyers and friends in government.
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The lawsuit before Judge Lackey centered on a fight over the division of $26.5 million in legal fees. Jones, Funderburg, Sessums, Peterson & Lee PLLC, a law firm in Jackson, Miss., sued Mr. Scruggs for allegedly withholding money it claims it was owed for its work on Hurricane Katrina insurance-related litigation?
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