THE COURT : All right. Mr. Graves, Mr. Moore, do
either of you have any doubt as to the defendant’ s competence
to enter a plea at this time?
MR . GRAVES : No, sir.
MR . MOORE : No, sir.
THE COURT : The Court finds that this defendant is
competent to enter a plea. Have you had an ample opportunity
to discuss this case with your attorneys?
THE DEFENDANT : I have, Your Honor.
THE COURT : Are you satisfied with your attorneys’
representation of you?
THE DEFENDANT : I am, Your Honor.
THE COURT : Do you believe that they have competently
represented your best interests in this case?
THE DEFENDANT : I do, Your Honor.
THE COURT : Do you understand that under the
Constitution and laws of the United States that you are
entitled to a trial by a jury on this charge?
THE DEFENDANT : Yes, sir.
THE COURT : And do you understand that if you wish to
have a trial the – – you would be presumed to be innocent of
this charge and the Government would be required to prove you
guilty beyond a reasonable doubt before you could be found
guilty? Are you aware of that?
THE DEFENDANT : I am, Your Honor.
THE COURT : And do you understand that in the course
of a trial the witnesses for the Government would have to come
into Court and testify in your presence; that your attorney
could cross-examine the witnesses for the Government; they
could object to evidence offered by the Government and offer
other evidence in your behalf? Are you aware of that?
THE DEFENDANT : Yes, sir, Your Honor.
THE COURT : Do you further understand that if you
wish to testify in your own defense you have that right, but if
you chose not to testify no inference or suggestion of guilt
would be drawn by the fact that you did not testify? Are you
aware of that?
THE DEFENDANT : I am, Your Honor.
THE COURT : Now, if you plead guilty here today and I
accept your plea, do you understand that you’re going to waive
your right to a trial; the other rights I ‘ve just discussed
with you; there will be no trial; and I will enter a judgment
of guilty and sentence you on the basis of your guilty plea
after considering a presentence report?
THE DEFENDANT : Yes, sir, Your Honor.
THE COURT : If you plead guilty here today, do you
also understand that you will also waive your right not to
incriminate yourself, which you’re guaranteed by the Fifth
Amendment of the Constitution, because I will ask you questions
about what you did in order to satisfy myself that you are
guilty as charged? Do you understand that?
THE DEFENDANT : I do, Your Honor.
THE COURT : All right. Now, by your knowing what
you’re waiving by pleading guilty at this time, do you still
want to go forward with this guilty plea?
THE DEFENDANT : I do, Your Honor.
THE COURT : Have you received a copy of this
information?
THE DEFENDANT : I have, Your Honor.
THE COURT : It charges you with having knowledge of
the actual commission of a felony. You concealed it and did
not make known the same to some judge or other person in
authority under the United States law in violation of Title 18,
United States Code, Section IV. That’ s what you’re charged
with. Have you discussed with your attorney this charge and
any defense that you might have to it?
THE DEFENDANT : I have, Your Honor.
THE COURT : All right. Now, before you could be
found guilty of this charge, the Government would have
to present evidence to the Court, to the jury, that four
elements occurred. First, that a felony, a federal felony, was
committed. Secondly, that you had knowledge of the commission
of that felony. Third, that you failed to notify an authority
as soon as possible. And fourth, that you committed an act, as
charged, to conceal the crime.
Are you aware that the Government would have to prove all
four of those elements beyond a reasonable doubt before you
could be found guilty?
THE DEFENDANT : I am, Your Honor.
THE COURT : Do you have any questions about this
charge?
THE DEFENDANT : No, sir, Your Honor.
THE COURT : Do you understand the maximum possible
penalty under the law for this crime?
THE DEFENDANT : Yes, sir, Your Honor.
THE COURT : What’ s your understanding of it?
THE DEFENDANT : Three years.
THE COURT : All right. And also a $250,000 fine.
THE DEFENDANT : That’ s correct, Your Honor.
THE COURT : And supervised release of up to a year.
Are you aware of that?
THE DEFENDANT : Yes, sir.
THE COURT : Has anyone threatened you or forced you
to plead guilty to this charge?
THE DEFENDANT : No, sir.
THE COURT : All right. Counsel have advised the
Court there is a plea agreement entered into. What is the
substance of that plea agreement, Mr. Sanders?
MR . SANDERS : Yes, sir. The defendant agreed to
waive indictment and plead guilty under oath to a one-count
information charging misprision of a felony. The United States
agrees not to charge the defendant with any other offenses
arising from or related to the above charges and agrees to
dismiss the original indictment upon conclusion of sentencing.
After being fully advised of all the facts and
circumstances of the defendant’ s involvement, the Government
will recommend a probated sentence. However, there is no
agreement as to the sentence to be imposed, which will be in
the sole discretion of the Court subject to the applicable
Federal Sentencing Guidelines which have been explained to the
defendant by his attorney. And both parties reserve their
right to speak at sentencing.
This agreement does not bind any prosecuting authority of
any state or any other federal district, nor does it bind the
Attorney General of the United States with regard to any
matter, criminal or civil, involving the federal tax laws.
The defendant is aware that if he violates this agreement
all statements made pursuant hereto will be admissible against
him. He hereby waives the provisions of Rule 11( f ) of the
Federal Rules of Criminal Procedure and Rule 410 of the Federal
Rules of Evidence. He may also, in that event, be prosecuted
for all federal offenses, including perjury and false
statements related to this agreement.
Apart from being advised of the advisory nature of the
United States Sentencing Guidelines, no promise or
representation whatsoever has been made to the defendant. This
agreement fully reflects all the promises, agreements, and
understandings between the defendant and the United States
Attorney.
His agreement is knowing, free, and voluntary, not the
product of force, threat, or coercion. He is pleading guilty
because the defendant is in fact guilty of the charges . And
that’ s essentially the substance of the plea agreement.
THE COURT : All right. Mr. Scruggs, you heard
Mr. Sanders state his understanding of the agreement that you
entered into with the Government. Did he accurately state it
as you understand it to be?
THE DEFENDANT : He did, Your Honor.
THE COURT : Mr. Graves – –
MR . GRAVES : Yes, sir.
THE COURT : – – Mr. Garrett, is it the
understanding – – as you understand it to be? Mr. Moore?
MR . GARRETT : Yes, Your Honor.
MR . MOORE : Yes, Your Honor.
THE COURT : All right. Has anyone made any promise
to you in addition to this plea agreement to cause you to enter
a plea of guilty?
THE DEFENDANT : No, sir, Your Honor.
THE COURT : All right. You understand, Mr. Scruggs,
that any recommendation of sentence which the plea agreement
contains is not binding on this Court; and the Court can
sentence you up to the maximum three years which the law
provides for this?
THE DEFENDANT : Yes, sir, Your Honor.
THE COURT : All right. Has anyone made any
prediction what sentence you would receive?
THE DEFENDANT : No, sir, Your Honor.
THE COURT : Did you, as charged in Count 1 of this
indictment, have knowledge of a felony, a federal felony,
having been committed and conceal it, not report it to the
authorities as required by law?
THE DEFENDANT : I did, Your Honor.
THE COURT : All right. Mr. Sanders, what evidence
would the Government be able to present as to this charge?
MR . SANDERS : Yes, sir. Should the present action go
to trial, the Government would show that on or about March 15th
of 2007 the defendant, along with Richard Scruggs and Sid
Backstrom, met with Steve Patterson and Tim Balducci and,
during this meeting, discussed Balducci’ s relationship with
Circuit Judge Henry Lackey.
At that time, Judge Lackey was presiding over a civil
matter styled Jones v . Scruggs. Also at that meeting, it was
decided that, because of his close relationship with Judge
Lackey, Tim Balducci would speak to the judge in an ex parte
manner and ask him to rule in favor of the defendants.
Everyone was aware that Balducci had not made an official entry
of appearance on behalf of the Scruggs Law Firm to represent
them in the matter.
Shortly thereafter, Balducci met with Judge Lackey and
discussed the Jones v . Scruggs lawsuit. Judge Lackey
subsequently contacted the United States Attorney’ s Office and
began working with the Government in an undercover capacity.
Over the course of the next few months, Balducci met with
Judge Lackey on several more occasions, many of which were
recorded. And on October 18, Judge Lackey gave Balducci a
signed order ruling in favor of the defendants. Balducci then
drove the order from Judge Lackey’ s chambers in Calhoun City to
the Scruggs Law Firm in Oxford and left the order with the
defendant Zach Scruggs.
At this time, Scruggs was aware that the order would send
the Jones v . Scruggs matter to arbitration; and he was aware
that the plaintiffs were unaware of both Balducci’ s involvement
and that Judge Lackey’ s ruling was based in part on something
other than the merits of lawsuit, that is, Balducci’ s personal
relationship with Judge Lackey.
Scruggs was also aware that such an act deprived the state
of Mississippi of its intangible right to the honest services
of Judge Henry Lackey performed free from deceit, bias,
self-dealing, and concealment.
By November 1st, 2007, the order Balducci delivered t o
Scruggs on October 18th had not yet been entered. On
November 1st, Balducci returned to the Scruggs Law Firm with
another order and, on this date, met with Zach Scruggs and Sid
Backstrom in Backstrom’ s office.
During this meeting, Balducci explained to both Scruggs
and Backstrom that the order he left with Scruggs on October
18th had not been entered because before the judge had time to
file it the plaintiffs filed additional motions; and the judge
believed he needed to draft an order addressing these
additional filings.
Balducci, by this time, was cooperating with the United
States and was wearing an audio recorder. Both Scruggs and
Backstrom spent time examining the order and discussing its
contents. After receiving and examining the order, Scruggs
failed to inform the firm’ s counsel of record of the manner in
which the order had been obtained, thereby concealing this fact
from the plaintiffs, whom the firm’ s counsel would have been
bound to inform.
While it is not necessary that the defendant knew of this
fact, the Government would show that also on November 1st an
e -mail was sent via wire transmission in interstate commerce
from the Scruggs Law Firm to Tim Balducci containing documents
related to the order sending this case to arbitration.
Finally, the Government would show that the
above-described criminal activity took place in Lafayette
County, Mississippi, which is in the Northern Judicial District
of Mississippi.
THE COURT : Mr. Scruggs, did you do what the
prosecutor just described you as having done?
THE DEFENDANT : I did, Your Honor.
THE COURT : The Court finds there is a factual basis
for this defendant to plead guilty to this charge. Do you
plead guilty or not guilty to Count 1 of this information?
THE DEFENDANT : I plead guilty, Your Honor.
THE COURT : Since you acknowledge that you are
guilty; you know what your right is to a trial; you know what
the maximum possible punishment is; and then the Court’ s
finding you’re voluntarily pleading guilty; the Court will
accept your guilty plea and enter a judgment of guilty on your
plea.
All right, now, I see from this plea agreement – – from
what counsel said, this plea agreement does not require the
defendant to cooperate with the Government on any other cases,
testify in any other cases?
MR . SANDERS : Yes, sir, Your Honor.
THE COURT : That’ s what it calls for?
MR . SANDERS : Yes, sir.
THE COURT : Do you have knowledge that he has
information on other cases?
MR . SANDERS : We have no knowledge that he has any
information on other cases at this time, Your Honor.
THE COURT : All right. Of course, this is quite a
difference of charges from six felony counts involving
conspiracy and the related counts down to one count of
misprision of a felony. If the prosecution thinks that’ s what
they want to charge him with now, the Court will – – that’ s the
prosecution’ s call.
And the Court will consider this case, consider the facts
of the case, have a presentence report conducted, and determine
what would be the proper sentence under this particular charge
at a later date.
Put the defendant in touch with the probation officer
before you leave here today, and they’ll start the presentence
report. Anything else?
MR . GRAVES : Your Honor, could the defendant speak
briefly?
THE COURT : Pardon?
MR . GRAVES : Could Mr. Scruggs speak briefly to the
Court?
THE COURT : Yes.
THE DEFENDANT : Thank you, Your Honor. This is my
first time to be before Your Honor in Court, and no one is
sorrier than I that it’ s under these circumstances. I ‘ d like
to start out by telling the Court, and the public, that I had
no knowledge that Tim Balducci bribed Judge Lackey in
connection with this arbitration order. I didn’ t conspire to
bribe Judge Lackey in connection with an arbitration order, and
I would have stopped it had I known.
However, I did have some knowledge that Tim Balducci had a
close personal relationship with Judge Lackey, and that he used
that personal relationship to have improper ex parte contacts
with the judge regarding the order. Such improper contacts, if
left unchecked, can – – and in this case did – – deprive the
people of the state of Mississippi of fair and honest services.
As a member of the Mississippi Bar, and as an officer of
the Court, I had a duty to prevent such contacts from occurring
and to report them; and I failed to do so. I am truly and
humbly sorry for that; and I apologize to the Court, to the
legal profession I love so deeply, and to the people of the
state of Mississippi.
I ‘ m here today to accept full responsibility for my acts
and prepared to accept the full consequences, both from this
Court and the Mississippi Bar. We, as members of the Bar, have
high standards we have to live up to. And it’ s not just enough
that we not engage in ex parte contact or unethical contact; we
have a duty to prevent others from doing so. And I failed to
do so in this particular case.
I hope that the profession and the Mississippi Bar will
learn from and benefit from my failure, and that it will – – my
actions here today will improve the Mississippi Bar Association
for the better. And may God save this Court and our honorable
profession. Thank you, Your Honor.
THE COURT : All right, Mr. Scruggs. Of course, the
legal profession that you say you love so much, you will not be
a part of it the rest of your life. You understand that?
THE DEFENDANT : Yes, Your Honor.
THE COURT : Okay. The Court will accept your
statement and consider it, along with all the other evidence,
as well as the sentencing guidelines involved in a case such as
this; and you’ll be notified of the exact date of sentencing.
I ‘ m not going to set that date at this time. But you’ll be
notified. It’ll probably be within six weeks or a couple of
months, maybe six weeks, 6 to 8 weeks.
And Counsel, of course, will be notified. And you can
keep that road hot between here and Kansas City as you have
been doing for the last several weeks. All right, Mr. Graves,
put him in touch with the probation office; and with that
understanding, then, you may be excused until you’re ordered to
be back.
