An attorney has pleaded guilty to conspiracy to bribe a judge and is assisting federal prosecutors in a case involving one of the nation's wealthiest trial lawyers, according to court documents.
Timothy Balducci entered the plea late Tuesday after initially pleading not guilty.
According to court papers, Balducci was accused of delivering thousands of dollars to a judge at the behest of prominent attorney Richard "Dickie" Scruggs for a favorable ruling in a civil case.
The case before the judge involved a dispute between Scruggs and other lawyers over $26.5 million in fees from a mass settlement of lawsuits that homeowners filed against State Farm Insurance Cos. after Hurricane Katrina.
Scruggs and the other attorneys appeared in court a week ago and pleaded not guilty to charges against them.
Scruggs, a brother-in-law of Sen. Trent Lott, R-Miss., earned millions from asbestos litigation and from his role in brokering a multibillion-dollar settlement with tobacco companies in the mid-1990s. His case against the tobacco companies was portrayed in the 1999 movie "The Insider," starring Al Pacino and Russell Crowe.
No sentencing date was set and Balducci was released on his own recognizance. The charge carries a five-year sentence.
$50,000 bribe offer alleged
An indictment accuses Scruggs of conspiring to pay the judge $50,000 to rule in his favor in a lawsuit brought by other attorneys who sought fees for work on Katrina insurance litigation.
Circuit Court Judge Henry Lackey reported the "bribery overture" to federal authorities and agreed to assist investigators in an "undercover capacity," according to the indictment.
Scruggs' son and law partner, Zach Scruggs, former Mississippi Auditor Steve Patterson and attorney Sidney Backstrom were also indicted in the case. Patterson, who is not an attorney, worked for Balducci's law firm in New Albany, Miss.
They face charges including one count of defrauding the federal government and two counts of wire fraud.
"I'm convinced that these guys did not do what they're accused of doing," said Joey Langston, a lawyer for Scruggs' firm.
Balducci allegedly said during one conversation with Zach Scruggs and Backstrom that "we paid for this ruling; let's be sure it says what we want it to say," the indictment says.
After Katrina hit on Aug. 29, 2005, the Gulf Coast native sued insurers on behalf of hundreds of policyholders whose claims were denied after the storm.
Law offices searched
FBI agents searched Scruggs' law offices and left with copies of computer hard drives.
The alleged bribery scheme stems from a lawsuit filed in March against Scruggs by a Jackson, Miss., law firm, Jones, Funderburg, Sessums, Peterson & Lee in a dispute over $26.5 million in attorneys' fees.
Scruggs created a legal team called the Scruggs Katrina Group to represent policyholders who sued their insurers after the hurricane.
In January, Scruggs' legal team reached a mass settlement of suits with State Farm Insurance Cos. that involved more than $26 million in lawyers' fees.
The lawsuit accuses Scruggs of trying to "freeze out" lawyers from the Jackson law firm, including senior partner John G. Jones, and pay it a "ridiculously low figure" for its "substantial" work.