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Monday, September 16, 2019

Scruggses split up, all set for prison time

By John O'Brien | Jul 23, 2008

The federal prison in Ashland, Ky.

Dickie Scruggs

OXFORD, Miss. (Legal Newsline) - The father-and-son tandem that ran one of Mississippi's most prominent plaintiffs firms then admitted to attempting to bribe a state judge will spend their prison sentences 774 miles apart.

Richard "Dickie" Scruggs, 62, received notice Tuesday that his request to spend a five-year sentence in federal prison in Pensacola, Fla., was denied, while son Zach's plea to have both sent to Arkansas was also denied. Dickie must report to the Federal Correctional Institution in Ashland, Ky., on Aug. 4.

Zach had asked on Tuesday to be placed in the same federal facility in Arkansas that fellow Scruggs Law Firm attorney Sidney Backstrom was. Instead, he'll be going to his first choice -- Pensacola.

"Scruggs asked for a recommendation to the facility at Pensacola in order to ease the travel burden on his family, specifically his health-embattled mother, Dianne Scruggs, as he believed his father was going to be placed at the same facility," Zach's motion says.

"Scruggs has subsequently learned that BOP has a policy of not assigning to the Pensacola facility individuals who have previously held a pilot's license. As the Court is aware, Dick Scruggs served as a pilot in the Navy, and Scruggs understands that Dick is thus precluded from being assigned to Pensacola."

Instead, the two were split up, continuing the pattern of tough treatment of the Scruggses. Dickie's five-year sentence was the maximum allowed by his plea deal, and Zach's 14-month sentence was a shock to both sides, considering federal prosecutors recommended probation. U.S. District Judge Neal Biggers made both decisions.

Dickie first made a name for himself in asbestos cases, representing shipyard workers. After that, his work led to the 1998 Tobacco Master Settlement Agreement, which has an estimated worth of $246 billion for the 52 participating territories and states.

After 2005's Hurricane Katrina, he grouped together a handful of law firms to create the Scruggs Katrina Group. The group represented insurance policyholders who believed their insurance companies were misrepresenting the amount of damage done to their properties by wind (covered by the policy) and water (covered by a federal program).

More than 600 cases were settled early in 2007, earning the SKG $26.5 million in attorneys fees. John Griffin Jones filed suit against Scruggs, claiming his firm was shortchanged when the money was divided.

Scruggs admitted that he gave the go-ahead for attorney Timothy Balducci to offer $50,000 to Lackey for a ruling that would have sent the dispute to an arbitration panel. Balducci pleaded guilty in November to the scheme, and his business partner Steven Patterson, a former state Auditor, soon followed.

Lackey contacted the FBI soon after Balducci's first mention of a bribe. Scruggs agreed to a maximum prison sentence of five years, pleading guilty to a conspiracy charge while the other five were dropped.

Zach pleaded guilty misprision of a felony, meaning he knew about the scheme but did nothing to prevent it. He must report to the Pensacola facility on Aug. 15.

Biggers fined each $250,000 and ordered them to pay the costs of their incarcerations.

Dickie recently filed suit against another law firm over attorneys fees.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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