Katrina lawyer is indicted
A powerful lawyer who has been leading the legal battle against the insurance industry in post-Katrina Mississippi was indicted by a federal grand jury Wednesday on suspicion of conspiring to bribe a state judge.
The indictment alleges that Richard F. Scruggs of Oxford, Miss., a prominent lawyer for plaintiffs, and four other men including Scruggs’ lawyer son conspired to bribe Mississippi Circuit Judge Henry L. Lackey with at least $40,000 cash for a favorable outcome in a lawsuit disputing the disbursement of legal fees won in a large storm-related insurance settlement.
Scruggs, 61, the brother-in-law of Sen. Trent Lott (R-Miss.), could not be reached for comment Wednesday night.
The indictment is the latest twist in a tangled web of legal actions after the storm.
It is also a dramatic turn of events for Scruggs, who has achieved fortune and fame in recent years.
His assault on Big Tobacco in the 1990s reportedly earned his firm hundreds of millions of dollars. Scruggs’ role in the tobacco litigation was dramatized in the film “The Insider.”
Wednesday’s indictment is the second criminal case brought against Scruggs since he began signing up hundreds of property owners alleging that State Farm Insurance did not adequately reimburse them for losses related to the 2005 hurricane.
He is currently awaiting arraignment on a contempt charge; he is accused of defying a federal judge’s orders and failing to turn over documents allegedly taken from State Farm by two would-be whistle-blowers.
Scruggs’ criminal defense lawyer, John W. Keker, has maintained that his client is innocent of the contempt charge.
The indictment filed Wednesday stems from a lawsuit filed in March that was presided over by Lackey in Calhoun County.
In that suit, an attorney named John Griffin Jones disputed the disbursement of $26.5 million in lawyers’ fees awarded to the law group headed by Scruggs, which at one time included Jones.
The fees were part of an $80-million settlement between State Farm and hundreds of clients represented by the Scruggs Katrina Group.
Lackey reported a “bribery overture” to federal officials, then agreed to work undercover to aid in their investigation, according to the indictment.
In September, the indictment alleges, an attorney named Timothy R. Balducci, who was acting on Scruggs’ behalf, agreed to pay Lackey $40,000 in exchange for an order favorable to Scruggs and his law firm.
Balducci then delivered the money in cash in three batches between Sept. 27 and Nov. 1, according to the indictment.
The indictment says that on Oct. 18, Scruggs wrote a $40,000 check to Balducci “as a cover and concealment for reimbursing Balducci for the $40,000 in bribe money.”
On Nov. 1, Scruggs also allegedly told Balducci he would make an extra payment of $10,000 to the judge.
In addition to Balducci and Scruggs, the indictment names two members of Scruggs law firm as defendants: Scruggs’ son, David Zachary Scruggs, and Sidney A. Backstrom.
Also named is Steven A. Patterson, a nonlawyer member of Balducci’s law firm.
The indictment alleges that all five men knew about the scheme.
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