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SH – Transcript: Dickie Scruggs...

SH – Transcript: Dickie Scruggs sentencing transcript

By: Magnolia Tribune - June 28, 2008

Transcript: Dickie Scruggs sentencing transcript (text version)

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JUDGE NEAL B. BIGGERS : Gentlemen, I assume that both sides are ready to proceed in this matter of U . S . v . Scruggs. Are you ready, Mr. Keker?

JOHN KEKER (Scruggs’ attorney): Yes, Your Honor.

JUDGE NEAL B. BIGGERS : All right. Mr. Dawson?

THOMAS DAWSON (U.S. Attorney): We are, Your Honor.

JUDGE NEAL B. BIGGERS : Very well. The first thing I am going to do is to get these sentencing guidelines out of the way. And, of course, the defendants have filed a memorandum, a memorandum objecting to some parts of the presentencing report. And the Government has responded to those objections.

I ‘ve read them all. The memorandum and briefing is very thorough. The points of law and objections to some of the factual allegations are there. I ‘ m prepared to rule on those objections without any oral argument. If you wish to have any oral argument, Mr. Keker, I ‘ll give you a little time to talk about it.

JOHN KEKER : Your Honor, we’re prepared to have you rule. I think we’ve briefed them, as you say, thoroughly. But I wanted to thank the probation office for their courtesy and consideration. We may disagree with them a lot about a lot of those points, but they certainly treated us fairly. And, so, we’re ready to have you rule on them.


JOHN KEKER : If you’ d like to hear argument about any particular part, I ‘ m prepared; but I don’ t think it matters so much for this sentencing. It may matter for some others . And that’ s kind of the – – one of the reasons that we were so anxious to put in what we thought was the accurate part of the record because it may affect some other people more than it affects Mr. Scruggs.

JUDGE NEAL B. BIGGERS : All right. I appreciate that. What does the Government say about it?

THOMAS DAWSON : If the Court please, summarily, we would also not feel the need for any argument. However, we would like to offer into evidence, as we previously indicated to the clerk, two exhibits. They’re on the table there. We’ve provided copies to opposing counsel and advised them earlier that we would be offering these documents.

They are the Jones v . Scruggs initial suit, that’ s Exhibit No. 1 , along with the attachments, which is the S K G agreement. And Exhibit 2 is a March the 6th, 2007, letter from the Scruggs Law Firm to Mr. Jones and his firm concerning the splitting of the fees and positions that they would take; and that was sent to them nine days before the lawsuit was filed that gave rise to this crime. So – –

JUDGE NEAL B. BIGGERS : Well, I may – – you’re talking about exhibits and so on. If you’re going to introduce them, I ‘ d have to stop and read them. If you want to – – there is a pretty serious question about – – in the formulation of the guidelines about the expected benefit that the defendant was looking at when he wanted to – – when he bribed Judge Lackey to send this case to arbitration rather than dispose of it in circuit court in Lafayette County.

And of course, the perceived or the expected or intended benefit is a fact on which the guidelines are partially based. So if you’re going to offer exhibits, I ‘ d just as soon you tell me what your argument is on that issue.

THOMAS DAWSON : All right, sir. And in addition to that, we also would like to ask the Court to take judicial notice of its files and records, the pleadings, the attachments, the testimony, and hearings that have gone on in the pretrial phase of this case, including the guilty plea. In other words, the Court would have before it all that was necessary to consider.

Now, the two exhibits that I ‘ve referred to do nothing more than augment the figures that are in the presentence report concerning the evaluation of the intended loss. So to that extent, there is nothing new except that it does augment and corroborate the figures that are used by the presentence report in the calculations – –

JUDGE NEAL B. BIGGERS : You mean you’re telling me these exhibits are just duplicative of what’ s already in the presentence report?

THOMAS DAWSON : They corroborate the presentence report, Your Honor.


THOMAS DAWSON : It was not clear to us that the presentence report actually had the lawsuit from which they said, for example, that the basis of the lawsuit was – – or the corpus of the lawsuit was $26. 5 million. So I just wanted to make sure that that was in the record.

JUDGE NEAL B. BIGGERS : Well, I ‘ m prepared to, you know, rule on the objections based on what I ‘ve already read in the reports .


JUDGE NEAL B. BIGGERS : And if that’ s agreeable to both the defendant and the Government, I ‘ m ready to do that.

THOMAS DAWSON : Yes, sir. Thank you.

JUDGE NEAL B. BIGGERS : All right. Of course, the intended benefit at issue is an interesting issue; but to some extent, it’ s a distinction without a difference. Because in calculating the guidelines, the Court – – as counsel well knows – – can consider either the amount of the bribe, in this case, that was paid, $50,000 – – 40,000 actually delivered and $10,000 more written, transferred to Balducci to supposedly give to Judge Lackey.

Or on the other hand, which is preferable, is to calculate the benefit that the defendant expected to receive as a result of the bribe. And this case is really not about so much the amount of money that was given to Judge Lackey, state circuit court judge; but it’ s about the effect of that bribe, of what the purpose of it was, to corrupt the ruling and the actions of the circuit court.

The Government is arguing that the benefit – – perceived benefit is somewhere around $ 4 million because that is approximately the difference between the amount of money that Jones had been offered by Mr. Scruggs and the amount of money that was sued for, the difference is approximately $ 4 million. So the Government has argued that that is the – – that is the amount of the – – that should be considered in calculating and arriving at the presentence – – at the perceived benefit. And on the other hand, the defendant is objecting to that and argues that $50,000, the amount of the bribe, should be considered because the amount of the benefit that would have been obtained by transferring to arbitration is not easily or accurately calculated for the reason that there’ s no way to know for sure what would have happened if the case had been left in circuit court. There’ s no way to know for sure what would have happened if it had gone into arbitration. So the defendant argues that we should fall back on the amount of the bribe.

Well, that is – – would be an easy way to look at it, just take the $50,000 and take that as the amount that would be used in calculating the guidelines. The Court does not feel that $50,000 is – – is a reasonable figure to use in calculating the seriousness of this crime. And there’ s no doubt that the defendant in this case expected and perceived more than a $50,000 benefit when he went to the extent to pay $50,000 and risked prison time to get the case transferred to arbitration. That wouldn’ t make since. It was worth a lot more than $50,000 to the defendant to get that done. It’ s obvious he did not want his case heard by a local jury. He wanted it heard by arbitrators that would be picked from a national arbitration board. And to do that, he was willing to risk conviction, prison, loss of his license, to take it out of circuit court into the field of arbitration.

So based on that, the benefit that the defendant intended to receive, in this Court’ s opinion, was high. And of course, the law is clear that the defendant – – I mean, that the Court is not burdened with the responsibility of determining exactly what the benefit was. The guidelines are basically – – are basically the same whether the benefit was $50,000 or $70,000; and then it jumps up to 120.

If – – just taking the $50,000, the guidelines go up from 46 to 57 months. If you just jump from 50 to 70, the guidelines are 57 to 71 months. So it really – – it makes no difference as far as the guidelines are concerned, as far as this case is concerned, whether the Court considers $50,000 or $100,000 or 4 million.

The Court is limited by this plea agreement and this plea to 60 months, regardless of what the guidelines are. And, so, to go through the exercise of calculating the guidelines, which the Court does in all criminal cases in determining sentence, the Court is going to calculate the guidelines in this case based on a $400,000 perceived benefit to be gained by the defendant.

That’ s kind of the figure that I think nobody could argue with as being too high. Or if it was any lower than that, it would make no difference what the guidelines are; so the Court is going to use that amount in calculating the guidelines, along with the criminal history and the other factors that are used.

There are other objections; and basically, they fall into three categories. The defendant’ s perceived benefit expected falls into the category of Mr. Scruggs’ role in the offense, whether he was a leader or not, and whether there are five or more people involved in this – – participating in this scheme to bribe. The Court overrules those objections.

The Court finds that there were five or more people involved. The defendants question whether Zack Scruggs is one of the five. The Court finds that, although he has not been convicted or pled guilty as a conspirator, the statute does not require a conspirator – – five people to be conspirators. The statute requires that at least five be participants in aiding in the crime in some way.

And the Court finds that Zach Scruggs was a participant. He looked at the order, proposed order, made comments on it before it was to be submitted to Judge Lackey; and he was there when this scheme first started. Some people have called that first meeting a scheme to earwig. Some have called it the first part of the conspiracy.

But whatever it was, when the defendant and these others , Zach Scruggs and Mr. Backstrom and Mr. Patterson and Mr. Balducci, got together for the purpose of sending Balducci over to talk to Judge Lackey, in this Court’ s mind, that was the starting of the scheme to corrupt the integrity of the Lafayette County Circuit Court.

Whether money was talked about or whether it was a job that was talked about, a monthly stipend to have your name on the letterhead was talked about, they were sending somebody who was not a lawyer in the case over to see a judge to try to persuade him to rule in favor of Mr. Scruggs for whatever reason. And the Court finds that there were five or more people and that was the attempt – – the start of the scheme to corrupt.

There’ s no doubt in the Court’ s mind that Mr. Scruggs, Mr. Richard Scruggs, was a leader and a planner. He says he came into the scheme late; but regardless of when he came into it, he was the money man. He’ s the man that wrote the checks. When Balducci went – – the record shows when Balducci went to see Judge Lackey and Judge Lackey brought up words to the effect of “instead of a job, what about some money; are you willing do that, Balducci said yes and thought he could. But the record shows that he immediately left Judge Lackey’ s office and called the Scruggs Law Firm. And he’ s testified he asked to talk to Backstrom. He asked to have permission – – or asked Backstrom what he thought about this money instead of – – supplying money. Backstrom said he’ d have to get back with him. And he got back with him and said no problem.

So the Court concludes that Backstrom – – I don’ t think – – that Backstrom didn’ t make that decision on his own. Or else he could have told him right then; he wouldn’ t have had to get back with him. So there’ s ample evidence to show, and the Court finds , Mr. Scruggs was a planner and a leader in this affair.

Now, the defendants have also objected to the inclusion in the presentence report of the 404( b ) evidence that was presented involving the testimony of certain persons, including Joey Langston, Scruggs’ former lawyer and friend; and also, Balducci and Patterson; that they were part of another case in which they bribed a judge, corrupted a judge, in another case in another court.

And they have – – the defendants object to that being included in the presentence report. The Court is going to sustain that objection and order it stricken from the court because it does not – – or is irrelevant to the computation of the guidelines in this case.

And that’ s something the defendant will probably have to answer to later. It’ s not going to be a matter that the Court is going to consider in this case. The other objections will be overruled. The defendants have asked for certain lines – – individual lines in the presentence report to be deleted and some new lines added. Those matters do nothing – – they do nothing that would aid the Court in determining the guidelines, so those are also overruled.

And based on these considerations, the Court has calculated the guidelines to be, as I said, slightly over 60 months, at the low end of the money figure, and will base the sentence on that.

The guidelines in this circuit are used to start off as the presumptively reasonable basis of a sentence. In the ninth circuit, Mr. Keker’ s home court, the guidelines are not considered that important; they’re one factor along with many others that the courts consider. In this circuit, the rule is that the guidelines are considered the presumptively correct sentence and to go up or down from there requires a good reason.

Let’ s see. I may have left those guidelines back in the back. Do you have a copy of it, Mr. East?

MR . EAST : (Passing document. )

JUDGE NEAL B. BIGGERS : The Court finds in this case, therefore, that the offense level – – using a $400,000 perceived benefit, which I said is probably low, the offense level is 31. The defendant has a criminal history category of one, which shows no previous criminal convictions.

Under the guidelines, it calls for an imprisonment range of 108 to 135 months. Of course, in this case, the defendant is – – sentence will be restricted to a maximum of 60 months. And the guidelines call for a supervised release range of two to three years, and a fine range of 15,000 to 150,000 dollars. The Court does find in these circumstances, in this case, there is a reason to depart upward in the fine range. The Court is still limited by the $250,000 maximum under the statute. But for the purpose of requiring the defendant to pay his own costs of incarceration, the Court will depart upward from the $250,000 guideline range and impose upward from that standpoint for the purpose of providing that the defendant will pay his own costs of incarceration.

Now, with that done, I appreciate counsel not going into a long argument, because the Court – – I think the record has been made very clearly by counsel for both defendant and the Government as to what the law is regarding these guideline ranges and what the findings of fact are and what the conclusions of law are. All right.

Even though it may be a moot point, there’ s some question in the Court’ s mind – – the Court is – – the presentence report gave the defendant credit for three points for acceptance of responsibility based on some matters that have been brought to the Court’ s attention. The Court would like to inquire into that.

Is there anything else before we – – before I ask the defendant and Mr. Keker and the Government if you have any statement to make to the Court, before we get into that; anything else we need to take up?

JOHN KEKER : No, Your Honor.

THOMAS DAWSON : No, Your Honor.

JUDGE NEAL B. BIGGERS : All right. Okay. Then, Mr. Keker, let your client come up before the Court.

JOHN KEKER : You want me up here with him, Your Honor?

JUDGE NEAL B. BIGGERS : Yes, sir. (Parties complying. )

JUDGE NEAL B. BIGGERS : All right, Mr. Scruggs, of course, this is a very unpleasant duty for me this morning; but it’ s certainly one that needs to be performed. Is there anything you wish to state to the Court prior to sentencing?

THE DEFENDANT : There is, Your Honor.

JUDGE NEAL B. BIGGERS : All right. You may do so.

THE DEFENDANT : If I may. I could not be more ashamed than to be where I am today, mixed up in a judicial bribery scheme that I participated in. I realized that I was getting mixed up in it. And I will go to my grave wondering why.

I have disappointed everyone in my life, my wife, my family, my son, particularly; my friends, many of whom were kind enough to come up today and to write to the Court. I deeply regret my conduct. I ‘ m sorrowful for it. It is a scar and a stain on my soul that will be there forever. And I thank you for letting me speak to the Court.


JOHN KEKER : I – – just briefly, Your Honor. It is certainly a grim moment. And on a personal level, I have not known Dick Scruggs that long, but I have come to admire him and like him and believe that he is the man that’ s described in these letters; and that this conduct is not Dick Scruggs. I think it would take a Falkner or a Walker Percy to understand how people – – how these kinds of things happen. But there’ s a passivity about Dick Scruggs in this instance that I think I ‘ m beginning to understand, but I just don’ t understand it about how it all happened.

He has fallen about as far as a man can fall. I think you heard he recognizes that. It’ s just – – it’ s terribly upsetting. The only thing I ‘ m asking you for is something that we’ve talked about with the Government before when we were doing this. It’ s not part of the agreement, but they told me they wouldn’ t object to these requests.

And one of them is, for medical reasons, for family reasons, for reasons of just letting him get settled down rather than shuttled around, we would ask that he self – – that you let the Bureau of Prisons designate a place for him to go, and he self report to that. So we’re asking that that happen rather than he be put into custody today.

And the second thing that we’re asking for is 30 days to get the money for the fine together. We heard what you said; we expect it to be a $250,000 fine. But that can be paid, but we’ d like 30 days.

And the third thing that I would ask for is that you recommend to the Bureau of Prisons – – recognizing, as we all do, that they’re not bound by anything that you recommend – – but that you recommend the camp at Pensacola, which is a place that would make it easier for Mrs. Scruggs to visit him because she has relatives nearby and friends nearby; and it would be a lot easier. So we’re asking for that recommendation.

Those are the three things, self-surrender, 30 days to pay the fine, and recommendation of the camp at Pascagoula – – excuse me – – Pensacola. I don’ t know why I keep saying that. That’ s all I have, Your Honor.

JUDGE NEAL B. BIGGERS : All right. Well, I – – they sound reasonable, although I question why you need 30 days to get up the $250,000 when it’ s in your checking account but – –

JOHN KEKER : There’ s actually cash flow issues that I can explain to you if you wanted me to. But the money you’ve heard about comes in somewhat regularly, and I ‘ve been told that 30 days would be – –

JUDGE NEAL B. BIGGERS : Okay. All right. Mr. Dawson, anything you wish to add for the Government?

THOMAS DAWSON : Very briefly, Your Honor. Only that the difficulty that we all feel with this case from day one has always been the nature of the offense as Mr. Scruggs has acknowledged. Beyond that, we believe that the sentencing is entirely within the discretion of the Court, and we would not undertake to comment further.

JUDGE NEAL B. BIGGERS : Very well. Well, this has gone a lot quicker than I thought it would and I was prepared for it to go, and I appreciate counsel allowing that to happen. As I said, Mr. Scruggs, this is a very unpleasant duty for me. But you’re not the first person within your means and stature and professional standing who’ s stood where you stand now, having been convicted of felonious criminal conduct.

And – – because I ‘ve had – – I ‘ve had the unpleasant duty before to sentence lawyers to prison, also doctors, and also ministers of the gospel, business executives, owners of businesses, bankers, not only bank tellers but bank presidents. So it’ s all – – it’ s all been very unpleasant and very unusual. But your case, I believe, is the saddest of any of these others that I ‘ve just mentioned. And it’ s the saddest because these other cases, every one of them, these bankers and lawyers and doctors, all thought they needed money or they did need money. And they were willing to risk their freedom and their profession to get some money.

And yet you – – you neither thought you needed money or did need money; yet you committed a reprehensible crime which, in my opinion, is one of the most reprehensible crimes that a lawyer can commit, the corruption of the rule of law which he’ s sworn to uphold.

And you did that just to give yourself a better position in a lawsuit than you would have gotten had you not done it. Or you thought you were giving yourself a better position. It’ s – – as you say, I don’ t know why you did it. I don’ t know what your motives were in choosing to commit this crime. I ‘ve heard it described by some that it was greed. I ‘ve heard some describe and say it was avarice. I ‘ve heard some say that you did it simply because you thought you could, that you’ d done it before and you thought you could do it – – and you felt you could do it again. And I ‘ m going to leave it up to others to ascribe to you the motive that you had in your mind when you chose to do it.

I do not have to know why you done it; I just have to know that you did it. And there’ s no doubt that you did it. I ‘ve heard the tapes. I ‘ve heard you say you did it. One of the worst crimes a lawyer can commit. You took an oath – – I ‘ m not going to read the oath, but I did get it out to see the oath and read the oath that you took as an officer of the Court. And you solemnly swore that you would demean yourself as an attorney which gave you the privilege of practicing before the Court. You had the authority as an attorney, as a member of the bar, to do powerful things. You could subpoena people. You could issue subpoenas to come and be – – for people to be taken up and brought in and placed somewhere.

You had the ability to – – the power to file suits against persons. You didn’ t have to get permission from anybody; you could just file. But you said that you would demean yourself as an attorney and counsel of the Court to the best of your learning and ability, that you will not use your authority as a member of the bar for the purpose of perpetrating any falsehood for money. That you will support the Constitution of the United States as long as you continue a citizen thereof, so help you God.

Well, you’ve not only attempted to corrupt the Court, you violated that oath. Now, to me, that is more serious than a man on the street bribing a judge. Because the man on the street, a party, for example, who comes into court and has a case in the court and tries to bribe a judge is not as serious as a lawyer trying to bribe a judge, because the man on the street hasn’ t taken an oath; the lawyer has.

And I personally was shocked when I first learned about this situation with you and your law partners. I was shocked as I learned the evidence as it developed. And when I saw how – – when you were approached with this scheme, I saw how easily and quickly you entered into it. And it made me think that this, perhaps, is not the first time you’ve done it because you did it so easily. You didn’ t really take time to think about it.

And there is evidence before the Court that you have done it before. So – – but I ‘ m not considering that as other evidence, as I said, in your case. That’ s something that will – – I have no doubt is being looked at, at this time. You attempted to bribe Judge Lackey. You found out that Judge Lackey is not a man to bribe. You picked the wrong man to try to bribe. Another thing that doesn’ t make any sense – – well, it makes your crime more reprehensible is the justice system has made you a rich man; the court system has made you a rich man. And yet you have attempted to corrupt it.

And I received these letters from your friends about how sentencing would affect you and your wife and your daughter, and I have sympathy for you in that respect. Your wife, I understand, is a fine lady; and her health is very delicate. But there’ s no question that your wife and daughter are going to be better provided for in your absence than anybody else I ‘ve ever heard that has come before the Court.

JOHN KEKER : Maybe Mr. Scruggs ought to sit down, Your Honor.

JUDGE NEAL B. BIGGERS : All right. (Pause. ) Well, Mr. Scruggs, you’ll receive a transcript of this sentencing hearing. And I ‘ll tell you now that, you know, there might be some things that you can do to help yourself in the future; and you can read about it. You may not remember what I ‘ m saying, but there’ s some people who you’re involved with who I have become intrigued in this situation of what’ s going on.

When I see, from this case and others, that people who are not lawyers are getting considerable amounts of money from a legal settlement and – – you know, it intrigues me as to how – – what they’re doing to earn it, if anything. They’re not lawyers, so they’re not receiving any settlements. If you come – – you know, Balducci said that you know where a lot of bodies are buried. If you want to uncover some of those bodies, it might help you in the future in this case and this sentencing.

But based on these considerations, Mr. Scruggs, and pursuant to the Sentencing Reform Act of 1984, it is the judgment of the Court that you be committed to the custody of the Bureau of Prisons to be imprisoned for a term of 60 months on Count 1 of this indictment. And the Court will recommend to the Bureau of Prisons that you be housed in a facility that can afford you the opportunity to participate in both mental health and drug treatment programs.

Upon release from imprisonment, you shall be placed on supervised release for a term of three years on Count 1 . There are certain strict conditions of conduct that you must abide by while you’re on supervised release. I ‘ m not going to go over those with you, but the probation officer will at the time you are released.

It’ s further ordered that you should pay a fine in the amount of $250,000 to the court clerk’ s office, a lump sum payment of $250,000 will be due in 30 days. And that will be for the purpose of – – as one person who wrote a letter said, he thought sending you to prison would be a waste of the taxpayer’ s money. To alleviate any concerns for that person, the taxpayers won’ t have to pay for your incarceration; you’ll pay for it yourself.

It’ s further ordered that you should pay the usual assessment. And with your excellent representation during this case, you know you have the right to appeal any sentence that is imposed illegally or as a result of a miscalculation of the guidelines. You’ll be given 30 days if you wish to report yourself in 30 days, within 30 days. You’ll be given that opportunity.

So that we’ll have your understanding of that, I have here a form that you agree that you will surrender yourself to the institution that’ s designated for your service on the date that the Court sets. So we’ll have your agreement for that, I ‘ll ask you to sign that; and your attorney can witness it. (Parties complying. )


JOHN KEKER : It’ s signed, Your Honor.

JUDGE NEAL B. BIGGERS : All right. Let me have that. All right. Give me a calendar. (Pause. ) All right. It’ s ordered that the Court will – – that the Court will allow this defendant to remain out on his present bond, and your reporting date will be August 4th by twelve o ‘clock noon.

And I will recommend that the Pensacola institution be the place designated. Of course, it depends on how many people are there; and it depends on the Bureau of Prisons’ situation. But normally, they will respect those requests. Best of luck to you.

JOHN KEKER : Thank you, Your Honor.

THE DEFENDANT : I hope to come out of this a better man, Your Honor. Thank you.

JUDGE NEAL B. BIGGERS : I think you will. Good luck.

THE DEFENDANT : Thank you, sir.

THOMAS DAWSON : Thank you.

JUDGE NEAL B. BIGGERS : All right. If there’ s nothing further, Court will be in recess.

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