High-Profile U.S. Trial Lawyer Scruggs Sentenced to 5 Years

By Matthew Bigg
June 30, 2008

A high-profile Mississippi lawyer, who became unpopular on Wall Street for battling powerful companies, was sentenced to five years in prison Friday after pleading guilty to conspiring to bribe a judge.

Richard "Dickie" Scruggs made millions through landmark lawsuits against tobacco, pharmaceutical and construction companies. He also sued insurance companies after Hurricane Katrina devastated New Orleans.

U.S. District Judge Neal Biggers ordered Scruggs to pay a $250,000 fine, as well as for the cost of his incarceration, which was due to start Aug. 4, according to a local television journalist who attended the hearing.

It was the maximum sentence possible under a plea deal worked out with government prosecutors.

"I cannot be more ashamed. I've disappointed everyone in my life," Scruggs told U.S. District Court in Oxford, Mississippi, adding that his conduct was a "scar and stain" on his soul.

Scruggs appeared to cry at one point during the hearing and left the courtroom without speaking to reporters. The judge told him he should continue to cooperate with prosecutors over the case.

PAY A JUDGE

The indictment said Scruggs and four co-conspirators planned to pay Circuit Judge Henry Lackey $50,000 to return a ruling favorable to the Scruggs Law Firm.

The case involved a lawsuit brought against the firm regarding the division of $26.5 million in attorney's fees in Katrina-related insurance litigation.

After the bribe offer in March 2007, Lackey reported the encounter to the FBI and cooperated with its investigation, the U.S. attorney's office said.

Scruggs' most famous lawsuit against tobacco companies formed the basis of a 1999 movie "The Insider," starring Al Pacino and Russell Crowe.

Scruggs was a leader of a group of law firms that successfully sued major cigarette makers on behalf of U.S. states and won a landmark $206-billion settlement in 1998.

Legal fees ran into the billions. An arbitrator awarded $8 billion to the lawyers who worked on the lawsuits in Florida, Mississippi and Texas alone. Scruggs' firm got nearly $900 million of that.

Sidney Backstrom, a member of the same firm as Scruggs, also pleaded guilty to count one of the indictment: conspiracy to commit an offense against the United States. He was sentenced to 28 months and a $250,000 fine Friday, according to the website of The Clarion Ledger newspaper.

In Backstrom's case, the government agreed to recommend a sentence that would not exceed one half of the sentence imposed on Scruggs, or 30 months in jail, documents showed.

(Editing by Michael Christie)