Settlement reached in fraud suit against Scruggs

AP News
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Posted: Nov 12, 2009 9:29 PM

A settlement has been reached in a long-running fraud lawsuit filed against Richard "Dickie" Scruggs, the once powerful anti-tobacco litigator who is now behind bars, an attorney says.

William Roberts Wilson, Jr., of Tuscaloosa, Ala., first sued Scruggs in 1994, accusing the Mississippi attorney of cheating him out of millions of dollars in fees from asbestos lawsuits the two worked on together. Wilson claimed Scruggs used the money to fund the landmark anti-tobacco litigation of the 1990s, from which Scruggs reportedly earned as much as $848 million.

The settlement in the dispute with Scruggs was reached Thursday, said Charles Merkel, an attorney for Wilson. Merkel declined to detail the terms of the settlement, saying it is confidential. The settlement order hasn't appeared on the federal court's Web site.

"We're very satisfied and very pleased that after 15 years most of it is finally over," Merkel said.

Gerald Jacks, an attorney representing Scruggs, did not immediately return a call from The Associated Press seeking comment.

The case is part of the complicated legal maze that led to the fall of former Hinds County Circuit Judge Bobby DeLaughter, who will be sentenced in federal court in Aberdeen on Friday.

Still pending is a lawsuit filed in U.S. District Court in Oxford that accused Scruggs and his associates _ former Hinds County District Attorney Ed Peters, New Albany attorney Timothy Balducci and former Mississippi Auditor Steve Patterson _ of racketeering by conspiring to bribe DeLaughter, who was presiding over the dispute dealing with the asbestos fees.

Merkel said Scruggs and his son, Zach Scruggs, are no longer a party to that suit.

Scruggs is serving a five-year sentence for conspiring to bribe a state judge in a legal fee dispute over Hurricane Katrina lawsuits. Balducci, Patterson and Booneville attorney Joey Langston took plea bargains in that case and pointed investigators to other alleged crimes, including the asbestos case in Hinds County.

Patterson filed documents in federal court on Thursday accusing Scruggs of breaching a contract between the two by settling the Wilson case without contacting him or including him in the settlement.

DeLaughter pleaded guilty in July to a federal obstruction of justice charge. Prosecutors have said Scruggs and Langston conscripted Peters, one of DeLaughter's former bosses, to contact the judge.

DeLaughter admitted he lied when he told the FBI agent he "never spoke to Ed Peters regarding" issues in Wilson's lawsuit.

"DeLaughter, after being bribed by Scruggs and Peters and the rest of the group, awarded Wilson only a small amount of the asbestos fees," Merkel said Thursday.

Prosecutors have said DeLaughter was drawn into the scheme by the promise of a federal judgeship. They said Peters told DeLaughter that Scruggs' brother-in-law, former U.S. Sen. Trent Lott, would help him get appointed to the federal bench if he ruled in Scruggs' favor.

Lott was not charged in the case.