Zach Scruggs pleads guilty

THIRD UPDATE: Here’s a copy of the transcript of Zach Scruggs’ plea agreement.  I heard it was available on folo and maybe other websites, but I had already ordered it by the time I heard that, so what the heck, the $21 cost of the transcript is on me.

SECOND UPDATE: Here are some of the documents from the plea.

Plea agreement.

Information.

Possible penalties for charge.

Factual basis for government charge.

Plea agreement accepted.

Since it’s a felony, of course his law license is gone too.

And here’s a story by Anita Lee of the Sun Herald.

FIRST UPDATE:  A few additional details from a follow-up phone interview I did with our correspondent —

Zach’s mother, Diane, was in court.  She did not look nearly as frail as she did last week when Dickie pleaded, was holding up better. Dickie (wisely) was not present.

Our correspondent has seen Zach in court before, feels he exudes an aura of arrogance which was also manifest today.  Zach did not do himself any favors, our correspondent says, during his allocution.  Unlike Sid Backstrom last week, he did not break down or even come close, or really even give a sincere apology.  His speech talked of his love for the legal system and how he really didn’t know what was going on.  Judge Biggers appeared chagrined that the deal included no time in prison for Zach, our correspondent believes that will not sit well with Biggers and he will sentence Zach to some time.    

Is it over now? Probably not.  There is the Wilson case.  There are the 50 sealed indictments out there, which I have heard about for months and about which I have been skeptical, but which some sophisticated people believe are real and not myth.    

ORIGINAL POST: Here is a report from ICLB’s ever-dependable Oxford correspondent, whose identity remains confidential to readers but whom I vouch for.

Zach pleaded guilty to a one-count information for misprision of felony. He stood before Judge Biggers with his attorneys Mike Moore and Todd Graves. David Sanders represented the government.

The elements of the crime that he committed are as follows:

1. federal felony was committed.

2. he had knowledge of the felony

3. failure to notify authorities

4. committed an act to conceal the crime.

Max possible penalty is 3 years, $250,000 penalty, supervised release up to one year.

Zach waived indictment in exchange for dismissal of original indictment and not being charged with offenses related to the charge.

Government recommended probated sentence.

Judge pointed out that the sentence recommended was not binding on the court.  The judge asked Zach if anyone had made any prediction as to his sentence, to which Zach respoonded that no one had.

The charge stems from a meeting on 3/15/07 where Zach, Dickie Scruggs, Backstrom, Patterson and Balducci met and discussed Balducci’s relationship with Judge Lackey and at the meeting it was decided that Balducci would speak to Judge Lackey about making a favorable ruling for defendants in Jones v. Scruggs.

The judge noted that the government was going from charging Zach to 6-count felony indictment to one count misprision of felony.  This observer got the impression that Zach was getting a sweet deal with his plea, and that Judge Biggers thought so as well.

Zach asked to address the court and noted that no one was "sorrier than I." He pointed out that he did not bribe or conspire to bribe Judge Lackey nor did he have knowledge of a bribe. He did, however, have knowledge of improper contacts by Balducci to Judge Lackey and had a duty to prevent these, in which he failed. He said he had a duty to prevent ex parte contact. Talked about the duty he owed to the legal profession and how he was truly sorry to the legal profession and how he loved the legal profession. Judge Biggers responded: the "legal profession that you say you love so much you will not be a part of for the rest of your life."

This was just filed  — a waiver of indictment by Zach, allowing a charge of misprision of a felony to be brought through an information rather than an indictment. 

35 Comments

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35 Responses to Zach Scruggs pleads guilty

  1. Anderson

    The judge asked Zach if anyone had made any prediction as to his sentence, to which Zach respoonded that no one had.
    Ooh, now they can get him for perjury!

  2. Gavin

    Correct me if I am wrong, but Z. Scruggs did not admit to concealing a felony (of attempted bribery)but to having failed to report a plan to make ex parte contact with Judge Lackey. Unethical yes, but in and of itself a felony? See 18 U.S.C. s. 4. This looks a bit like an Alford plea (i.e. a plea that does not acknowledge guilt but concedes that the government has the evidence to establish guilt).

  3. DeltaNative

    Is the transcript of the hearing available yet?

  4. Scruggs Nation Detox

    Moore, Scruggs and the whole Katrina crew back when they were playing offense:
    http://www.youtube.com/watch?v=6U2mT3-ZLw0&feature=related

  5. Confused

    ok-guilty plea entered—no jail time? Can’t be linked to other cases?? so confused….

  6. sam

    Now that these former Officers of the Court, have admitted to being nothing more then a bunch of deceitful corrupt felons. Isn’t time that you post their mugshots.

  7. Rodney

    Did the appointment of a “trial defence team” precipitate what seems to be a last minute prosecution loss of confidence in whatever the “taint team” came up with, resulting in what seems to be very light recommended punishment? Is Zach a good poker player or is this his lucky day? Or is it not that simple?
    I hope the judge sends him to prison, not because I hate arrogant law breaking lawyers, but there must be some sort of deterrent element in the sentence that sends a strong message to
    a) other arrogant would be law breaking lawyers
    b) the Mississippian public who must be heartily sick of the cosy power parasite class that emasculates the way their state functions
    c) the wider public (international even) who have looked aghast as this blatant Scruggery has been revealed.

  8. MORE COWBELL

    Earwigging is a felony? What about the contact Lackey reported from an attorney with Tollison’s firm.

  9. nmc

    Contact that is fully disclosed on the record– a t.r.o., a sealing order– is not remotely the same as what Dickie Scruggs did, MORE COWBELL.

  10. David Rossmiller

    More Cowbell, this is the time for Scruggslings to lie low, not come out for an early Easter parade.

  11. ThirdSouth

    More Cowbell, that question of yours, “Earwigging is a felony?”
    is the equivalent, given Zach’s guilty plea, to a man convicted of sodomy asking, “What? Following too closely behind is a felony?” Other folks on this site give you a hard time, but they don’t see your sarcasm. I think you’re quite the comedienne with: “Earwigging is a felony?” It’s like Martha Stewart inquiring: “Is teasing an FBI agent is a felony?” or O.J. Simpson asking “Is cutting up with your ex-wife and some guy she’s dating a felony?”

  12. MORE COWBELL

    I’m only asking about earwigging, b/c that’s what Master Zack said. See also Gavin’s post. NMC: I wasn’t talking about D.S., even tho that’s what he also said. Thirdsouth: how long was Martha in the Fem Pen?

  13. Gavin

    Having read the misprison of felony information, the goverment’s statement of the factual basis for Z. Scruggs’s plea, and the colloquy between Z and the District Judge, I find no specific identification of the underlying felony that Z is said to have concealed or failed to disclose. However, from the language employed it appears that the underlying felony is “honest services mail or wire fraud” as defined in 18 U.S.C. s. 1346. This provison was added in 1988 and has been the subject of lively scholarly debate and litigation with respect to its legitimate applications. The Z. Scruggs misprison guilty plea reflects some creative mining of the “honest services” statute by both sides.

  14. David Rossmiller

    Gavin, the underlying felony concealed is conspiracy to bribe Judge Lackey, that is, conspiracy to deprise the state of Mississippi of the lawful, honest services of a state official. I don’t know about these scholarly debates about the legitimate application of this statute, but surely if there is one, this is it. If not for this federal investigation, what is the likelihood these people would have been stopped? Probably between slim and none, and slim just left town.

  15. ThirdSouth

    More Cowbell, Martha Stewart served 5 months in prison and 5 months out with an ankle bracelet. Unlike Zach, she never admitted committing the crime with which she was charged. She admirably spent five months in a courtroom in New York defending herself. O.J., of course, never served any time because he had the
    courage to go the same route as Martha, defendeding himself in an courtroom in Los Angeles, and winning. My point was that comparing the moral turpitude of Zach’s admitted guilt of misimprisioning a felony to bribe a judge to “earwigging” is like comparing O.J.’s charges to merely “cutting up with his ex-wife and a guy she was dating,” or comparing a felony sodomy charge to a motor vehicle charge of following too closely behind. “Earwigging” is serious ethical wrongdoing, but earwigging a judge with bushels of “sweet potatoes” is a federal crime so serious that it is not only a felony, but also one that robs its perpetrator of his law license, probably (as Judge Biggers noted in the transcript of Zach’s guilty plea proceedings) for life. I took your farcical question as satire, and thought it was clever, in a “Saturday Night Live”
    vein. You can’t have been serious.

  16. David Rossmiller

    I’m picturing a new TV series here, “The Earwiggers,” about a fun-loving extended family of lawyers who know how to get things done, and don’t mind cutting a few corners to get there. The cast includes Ricky, the patriarch of the Smugs family, played by Colm Feore, the mastermind of every plan, the genius who insists on getting credit for everything — but watch what happens when The Fuzz nabs one of the gang: then he’s totally clueless!
    This lovable bunch of misfits also includes Sweet Tater, a wannabe who more than anything wants to be a Smugs, and will do anything for approval — and cold hard cash! Family friend and Superlawyer Jo-Jo is a caped tort crusader — he don’t need no private plane, he flies through the air all by himself! Until John Law grounds him, that is. This whacky bunch goes around with a focus-group tested patter about helping the little people while the media laps it up — they can’t get enough of these cut-ups! Even after the family’s secret motto is revealed — “what you don’t know, won’t hurt me” — they don’t believe it.
    Watch what happens when a local judge, Judge Wackey, makes secret tape recordings of the Earwiggers. A group calling themselves the Smugslings excuses their every crime as no big deal — hey, what’s a little earwigging, ain’t like no one got killed or anything.
    This is a really fun show, definitely two thumbs up, and it really lives up to its tag line: “A little song, a little dance, a little money in your pants.”

  17. Nomiss

    David, you really must retire early from law so that you can practice your other talents: writing books and plays. And you could do some stand-up comedy along the way.

  18. Nomiss

    No belle or cowbell in your TV series?

  19. Gavin

    David, Thanks for the response. I see in the plea proceedings no mention of ZS’s knowledge of a conspiracy to bribe the state judge — and thereby to deprive we Mississippians of honest services. Mentioned in the government’s facutal basis statement are two meetings in which ZS was involved with Balducci et al. The first was in March 2007 in which Balducci’s initial ex parte contact with Judge Lackey was initiated and at which ZS admittedly was present. The second was in Nov. 2007 where a draft of the order directing the case to arbitration was being reviewed. ZS participated in this as well. The documents were transmitted by or were the subject of e-mails and, hence, the wire transfer element of the underlying “honest services” offense was established. ZS claims he had no knowledge that a conspiracy to bribe the judge was afoot, but that he was aware that improper contacts with the judge had taken place. This may or may not be true, but that is the basis upon which his plea was tendered and accepted. Were this matter to be litigated there would be a legitimate issue as to whether the ex parte attempts to influence the judge via Balucci’s personal relationship (sans overt tender of a bribe to which Z disclaims knowledge)would fall within the ambit of the “honest services” fraud statute — and of any conspiracy to violate that statute. Also, the misprison statute while not containing an express “scienter” element with respect to the accused’s knowledge that the conduct he is concealing or failing to disclose is a felony, that is another issue I would expect to be argued in a contested case. I agree with you that the government needs appropriate legal weapons to deal with the kind of behaviors revealed in l’affaire Scruggs. I do not claim that any of these weapons were employed unfairly with respect to any of the defendants in this instance. In fact ZS seems to have caught a break in agreeing to a questionable application of the misprison statute that works in his favor. Three years is better than five and the Sentencing Guidelines will probably soften the hit in either case. BTW, the pleas of the Scruggs partners moot a challenge to the overbreadth and lack of sufficient particularity reflected in the affidavit submitted in support of the search warrant for the Scruggs Law Firm.

  20. David Rossmiller

    NoMiss, I forgot to mention, in addition to the Smugslings, in the show there is an ultra pro-Smugs group that calls themselves the Southern Belles — each person in the group has some kind of “bell” name: Bella, Bellwhether, Won’t You Come Home Bell Bailey, Jingle Bells, Bell Amie, Bellthashazar, Jambellaya, Liberty Bell, The Bell Curve, Belly the Kid, Bats in My Bellfry, etc.
    Not sure how much of a market there is for legal standup comedy, but you can catch my act at the Miss. St. Insurance Day.

  21. Scruggs Nation Detox

    HBO is desperate for a hit, it’s been reported, so maybe the honchos there would greenlight The Earwiggers. I’d watch.
    Didn’t Hood casually refer to earwigging in his NPR interview? The way he put it, as I recall, he seemed to say that it wasn’t unheard of- and he didn’t seem to think it was such a big deal.
    Don’t forget cameos by Randy Quaid (as Hood) and the mysterious $50-million dollar man in the pilot episode.

  22. southernmama

    I cannot contain myself any longer. I could get fired, but I can tell you personally that I have worked for a large insurance company for over 25 years. I also lived on the Gulf Coast for at least 15 of those years, one block off the beach. I lived there through at least 2 hurricanes. I never thought any insurance company would compensate me for Wind coverage when there was none. I had flood, wind and seperate HO policies. I am an insurance adjuster, and I do have a concience. For Trent Lott and those beach dwellers to think they should benefit from coverage they weren’t paying for is so ludicruis. Been there and done that. I am in the invesigative unit of the ins. co. I work for. Early on, we dubbed this the Katrina Conspiracy… this was less than 6 months after the storm. I am hoping to own a house in Florida 2 blocks from the beach. Do I expect somebody to help me after a storm. Fno. America was formed by people making the most of their circumstances. What does not kill you will make you better. All these people left whinning in FEMA trailers were like leeches before. Only now, in a different environment. I am SO sick of it. I have been poor and I have worked. Somebody needs to get a grip. The whole Scruggs, Minor deal needs to be explored. Where is David Nutt. Interesting that his wife is putting distance between she and his firm. This thing is bigger that anybody thought. I know first hand that there are things between a certain plaintiff attorney and former MDA Mike Moore and various ins. SIU were told to “back off”. The Katrina Conspiracy is just the beginning of the bursting of the large boil on the butt of MS. Do you think John Grisham just came up with his story lines on his own? Insert Scruggs as the attorney in several of the novels. Geee. I ain’t even got a law degree and I can see it’s a big boil on the great state of MS. I’m headed to Florida. At least they admit being corrupt.

  23. Joe

    pathetic, pathetic, pathetic. Greenlee should be ashamed of himself for agreeing to all of these pleas. Perhaps DOJ should have handled all of this!!!!

  24. ThirdSouth

    David — Given your penchant for poetry, and Backstrom and Balducci’s agreements to cooperate about the buried bodies beneath the surface of the Mississippi earth, may I suggest these lines from “Armadillo” by Billy Corgan (from his collection, Blinking With Fists (Faber and Faber, Inc., a an affiliate of Farrar, Strauss and Giroux, 2004):
    Their bones are out there still
    Baking in the sun and lunar ocean light
    To be found one day like us
    As stories we cannot bear to listen to

  25. Nomiss

    SouthernMama, I wish you could explain in more detail about the SIU who was told to “back off.” What were they doing that they needed to back off? Who told them to back off? And why would they listen to someone who told them to back off?

  26. MORE COWBELL

    SouthernMama: is State Farm still laying off? It has been a year since they pulled out b/c of the legal and political climate. Well, a loyal Republican is now the insurance commish, the Smugs are headed for the iron-bar hotel, Jimmy the Hood has been told to zip it, and not a single piece of state or federal legislation following Katrina has passed. Can’t the Good Neighbor come out and play?

  27. ThirdSouth, I like that poem.
    In tribute, I will write this haiku, in the traditional 5-7-5. It’s in honor of Dickie Scruggs, and it’s called Excuses.
    Earwigging’s OK,
    Not a crime, as I see it.
    No apologies.

  28. WOW

    For all the negative comments toward the insurance industry in general it seems interesting to me that the village criers of all things conspiracy and fraud are the actual felons.
    In the climate following the storm, I’m certain many carriers were afraid to even argue with these felons. That is why said felons have been so successful against other corporations and industries.
    It seems many carriers resolved these disputes as a business decision. Don’t kid yourself that the wind caused the damage right on the coast. Oh yeah, there were about 500 tornados or microbursts that hit before the surge. Why go to trial, present clear and convincing evidence of what the surge did, and have it called wind.
    Carriers willing to make those decisions would likely tell an attorney or an associate to resolve a case rather than risk making the political/legal/legislative environment worse.
    Southern Mama, take care in Florida. I left there not too long ago. It may be like leaving the frying pain and jumping into the fire. However, it was a beautiful place to be this time of year.

  29. observer

    southernmama – Let me get this straight? You work an insurance company, have worked for one for twenty five years, but think that you saying that insurance companies were all in the right, and that their customers are leeches who just need to quit whining and to harden the f*** up, is going to get you fired?
    I think you can quit worrying about that as I thought you were just reading from one of State Farm’s press releases.

  30. tsetse

    well, well, well. another fine, upstanding lawyer has to take a fall just because of ONE “boneheaded” mistake. are they having another sad day in mississippi yet? AG hood would have them all believing his “rare judicial bribery” remarks. 5 attorneys have pled guilty. 4 bribed one judge and 1 bribed another. that doesn’t count the state’s ex-auditor. all is well in dixie. hood has done himself proud. the state’s judiciary is now restored to its state of excellence. who knows, maybe the legislature can table that bill making it a felony for lawyers to bribe judges. what difference would it make?

  31. dixie68

    God Bless, and a huge thank you, Southernmama. While I don’t live on the coast, I certainly share your feelings and the way you think. I, too, am tired of all the weasels who think the world owes them a living. We just have a different variety up here where I live.

  32. partial coastal

    Let me explain one thing to SouthernMama. Many people that were flooded from Katrina were told they did not need flood insurance prior to Katrina. I advised a friend of mine who moved to the Coast right before the storm to go ahead and get flood insurance, even though her house was not in flood zone. She had to argue and argue with her insurance agent to get it and thank God she was successful as her house was flooded and in terrible shape after the storm. We are not necessarily talking about a bunch of freeloaders. Houses that did not get flooded in Camille were not considered in the flood zone. So, many of us on the Coast were not just sitting around, waiting for the big one to get a boatload of money. My house was not flooded but had to go back to my insurance company 6 times to get correct dollars on the wind damage – every time they sent a new estimate, something was taken off “by accident” or square footage of roof was mis-calculated, etc. I now pay an obscene amount of money for wind insurance that I hope in several years I can cancel and just be self-insured as I am fed up with insurance situation.
    I agree that there are some lowlife folks exploiting the system in FEMA trailers, but that is not exclusive to Coast.

  33. ThirdSouth

    Here’s a more traditional “seasonal” haiku to complement yours, David:
    Sweet potato spring
    Gives Trent hope that DeLaughter
    Won’t start to yammer.

  34. Nomiss

    My thanks to Southernmama also. Let’s get everything out in the open—lay the corn on the ground, so to speak. I want to know what politicians, judges, lawyers, insurance company execs, adjusters,etc,–anyone who is doing whatever that hurts us as policy holders and honest members of society a disservice. Let’s hear it from both sides.
    We now know that what Scruggs and Company claimed about companies was self-serving and for their own profit. Let’s get to the bottom. I want to see the corn on the ground.