UPDATE – 2 enter prison in bribe case, grand jury convenes

Published 8:39 pm Wednesday, March 25, 2009

Former Mississippi Auditor Steve Patterson and a disbarred attorney were scheduled to report to federal prisons Wednesday for their roles in the judicial bribery scandal that toppled one of the country’s most prominent attorneys.

Meanwhile, a federal grand jury currently meeting in Oxford appears to be hearing from some of the same witnesses who were part of the sweeping federal investigation that snagged wealthy anti-tobacco lawyer Richard “Dickie” Scruggs and led to charges against a noted Mississippi judge.

Scruggs and his former law partner Sidney Backstrom were recently moved from the federal prisons where they were serving their sentences to a jail in Oxford, said Lafayette County Sheriff Buddy East. Court officials confirmed Wednesday that a federal grand jury is in session there but gave no additional details.

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Hiram Eastland, Patterson’s attorney, said Wednesday he would “neither confirm nor deny” that Patterson testified before the grand jury Tuesday.

However, Eastland acknowledged that at Patterson’s sentencing, the judge set his prison reporting date for Wednesday at the request of prosecutors so he would be available to testify before the grand jury before this week.

Scruggs, 62, and the others were convicted in a scheme to pay a Lafayette County judge $40,000 for a favorable ruling in a dispute over $26.5 million in legal fees from Hurricane Katrina cases.

Patterson, 57, and his former partner, disbarred New Albany attorney Timothy Balducci, 41, were each sentenced last month to two years after cooperating with federal investigators. Patterson was to report Wednesday to the federal prison camp in Montgomery, Ala., according to court records. Balducci was to turn himself in to a prison in Estill, S.C.

Patterson and Balducci were the first two people to plead guilty in the ongoing investigation, which began with the attempted bribe of Lafayette County Circuit Court Judge Henry Lackey, and was revealed with indictments in November 2007.

Lackey had worked undercover for the FBI and recorded meetings when Balducci brought him envelopes stuffed with cash. The FBI confronted Balducci outside the judge’s office after he delivered the last payment. Caught in the act, Balducci then wore an FBI wire and gathered evidence on the others, including Patterson.

Patterson was well-known in state politics, but a blunder in office cost him his political career years ago. The Democrat resigned as state auditor in 1996 after allegedly lying on state documents to avoid paying taxes on a car tag.

Scruggs, who earned hundreds of millions of dollars in the tobacco settlements of the 1990s, was sentenced to five years in the Lackey case. He pleaded guilty to mail fraud Feb. 10 in an alleged scheme to bribe Hinds County Circuit Judge Bobby DeLaughter. Two years were added to his sentence.

Just two days later, DeLaughter, best known for successfully prosecuting a white supremacist decades after a civil rights-era killing, pleaded not guilty to five counts: conspiracy, obstruction and three counts of mail fraud.

Prosecutors say DeLaughter ruled in Scruggs favor in a dispute over asbestos litigation money based on a promise that Scruggs’ brother-in-law, retired U.S. Sen. Trent Lott, would help him get appointed to a federal judgeship. Lott has not been accused of wrongdoing. He recommended someone else for the job.