folo

UPDATED ABOVE AND BELOW

UPDATE: Rossmiller: Two hours after Tim Balducci’s arraignment yesterday, he changed his plea to GUILTY.

Huge hat-tip to Oxford Eagle reporter Alyssa Schnugg for setting us straight on who was where for Tim Balducci’s arraignment yesterday:

Balducci appeared in person at the U.S. District Court in Oxford but was arraigned by Magistrate Judge Jerry A. Davis via video camera from the Aberdeen courthouse.

Davis released Balducci on his own recognizance — without bail.

Balducci sat alone in the courtroom, notifying the court that he plans on representing himself against the charges.

"The may not be the best idea, " Davis told Balducci.

U.S. Attorney Robert Norman told Davis he recommended Balducci be let go without bond, saying it was proportionate with the other defendants.

Assuming this was done as sub-rosa as the rest of the preparations for last Wednesday’s indictments, I have to hand to Alyssa for the scoop. Not every day a little ol’ Mississippi paper beats the Wall Street Journal, now is it? You go, Alyssa!

(And thanks for the heads-up.)

lotus

UPDATE 1.5: Hot from the Oxford Eagle (even before they post it, but with their permission):

[No, wait -- too much italicized print for any eyes to tolerate, especially in gray font. I'm killing the blockquote, but everything from here down is courtesy -- and I DO mean courtesy -- of the Oxford Eagle.]

Balducci pleads guilty in Scruggs’ case
Attorney cooperating with federal officials in bribery charge
By Alyssa Schnugg

One of the five men indicted for attempting to bribe a Circuit Court Judge pleaded guilty late Tuesday afternoon, just a couple hours after originally pleading not guilty during his arraignment.

In a sudden turn-about, Timothy R. Balducci, a New Albany-based attorney, pleaded guilty to a charge of conspiracy to commit bribery of an elected state official at the U.S. District Courthouse at about 4 p.m. Tuesday. He is now cooperating with federal authorities in their case against high-profile attorney Richard "Dickie " Scruggs.

Balducci’s sentencing date has not been scheduled, but prosecutor Robert Norman said this morning it could take a couple of months before he is sentenced. The charge carries up to a five-year prison sentence and a $250,000 fine.

Balducci, along with attorney Dickie Scruggs, his son, Zach Scruggs, former state auditor Steven Patterson and Sidney Backstrom were named in a 13-count indictment last Wednesday for conspiring to bribe Circuit Court Judge Henry Lackey with more than $40,000 in cash during a civil lawsuit against Scruggs. Patterson works for Balducci as a non-attorney.

Balducci appeared in person at the U.S. District Court in Oxford early Tuesday afternoon and was arraigned by Magistrate Judge Jerry A. Davis via video camera from the Aberdeen courthouse. Balducci represented himself. He was released on his own recognizance but instead, never left the courthouse. Within two hours, he was back in court and changed his plea to guilty.

Patterson and Richard and Zach Scruggs pleaded not guilty to the charges in front of U.S. Magistrate Judge S. Allan Alexander last week. Zach Scruggs and Steven Patterson were released on $50,000 bonds each and Dickie Scruggs on a $100,000 bond. All three had to put up their homes as collateral.

Backstrom was arraigned last Thursday and released on his own recognizance.

The indictment states that Balducci had several meetings and phone conversations with Judge Lackey and handed him cash in his chambers.

"(M)y relationship with Dick is such that he and I can talk very private about these kinds of matters and I have the fullest confidence that if the court, you know, is inclined to rule… in favor… everything will be good, " Balducci told Lackey, according to the indictment. " … The only person in the world outside of me and you that has discussed this is me and Dick… 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. "

The indictment alleges the lawyers tried to get Lackey to sign an order in a civil lawsuit filed by a Jackson-based law firm that accused Scruggs of withholding fees for work its attorneys performed as part of a team of lawyers working on Hurricane Katrina insurance litigation, according to the indictment. Lackey reported the "bribery overture " to federal authorities and agreed to assist investigators in an "undercover capacity. "

The delay in Balducci’s original appearance in court for his first appearance along with certain details in the 13-page indictment, fueled speculation that Balducci is cooperating with authorities.

That speculation turned to fact this morning.

In the plea agreement, Balducci agrees to cooperate with U.S. Attorneys by giving "full and truthful statements. " It also states that "the government acknowledges the fact that the defendant has already substantially assisted the government… Providing the defendant continues his cooperation and substantial assistance, the government agrees to file with the court a motion for downward departure. "

"Downward departure " would mean the state could recommend a lesser sentence than what is put forth in the state’s sentencing guidelines.

Scruggs’ co-counsel, William Quinn II, who is with the Langston Law Firm, was surprised to hear of Balducci’s change of plea this morning.

"That’s news to me, " he said. "But it is consistent with what you would suspect from someone telling whatever stories he can concoct to receive a lesser punishment for his own bad acts. "

Quinn added that his client, along with his partners, are "absolutely innocent " of all the charges against them.

The indictment stems from a lawsuit against Scruggs’ firm filed by Jackson attorney John G. Jones in Lafayette County Circuit Court in March.

After losing his own Gulf Coast home to Hurricane Katrina, Scruggs put together a legal team, called the Scruggs Katrina Group, to represent the policyholders in the court battle against the insurance companies. One of the firms brought in to work with Scruggs was Jones’ firm, Jones, Funderburg, Sessums, Peterson & Lee.

After the legal team reached a settlement with State Farm Insurance Cos. in January, a dispute over how the $26.5 million in legal fees would be distributed to the firms erupted between the Jones law firm and the other members of the Scruggs Katrina Group. The Jones firm was kicked out of the legal team and, after Jones firms attempts to resolve the compensation dispute failed, the firm filed a lawsuit against Scruggs.

Jones said he was bewildered by Balducci’s plea.

"That fact that Mr. Balducci pleaded…indicates to me there are going to be other very large shoes falling — and soon, " he said this morning. "Once you see a member of a conspiracy pleading guilty then you see others doing the same thing. This is confusing and bewildering and it always is when you start weaving a web to deceive and that’s what this is — a very, very tangled web, spun by nothing but deception. "

Despite his strong words, Jones added that everyone should withhold judgment until the law enforcement officials complete their investigation.

The Jackson firm hired the Tollison Law Firm in Oxford to represent them in the litigation.

This morning, Grady Tollison said he wasn’t surprised Balducci pleaded guilty.

"Although, I am surprised he did at this stage, " he said.

Scruggs exits Katrina case

Late Tuesday, the Scruggs Law Firm informed its clients in a letter that it had "withdrawn from the group of attorneys who represent " their claims involving Hurricane Katrina "until these legal matters have been resolved and it is also withdrawing as counsel in your case if filed. "

Neither Zach Scruggs nor his attorney, Anthony Farese, responded to phone messages or e-mails left late Tuesday.

The letter went on to say that Barrett Law Office, P.A., Nutt & McAlister, PLLC and Lovelace Law Firm, P.A. were "committed to the same level of performance and professional expertise that have to date provided settlements to over 1,300 Katrina clients. "

"We will continue to pursue relief to you and the other clients who have been shortchanged by their insurers, " said the letter that was signed by Don Barrett, David H. Nutt and DeWitt Lovelace on behalf of their firms.

"Members of the Scruggs Law Firm have assured us that they engaged in no wrongdoing and we are confident they will be cleared of the charges, " the letter said.

–alyssa@oxfordeagle.com

UPDATE II: To consume that morsel more properly (in the kitchen where it was made), click here.