Friday, August 21, 2009

Bits and Pieces From the Alabama Legal Front

Feds Are Going After Sue Schmitz' Property
Federal prosecutors are trying to seize former Alabama Rep. Sue Schmitz' home in Toney, Alabama, and a house she owns in Florida to repay a court-ordered forfeiture following her conviction on fraud charges earlier this year.

This news comes after reports that William Athanas, lead prosecutor in the Schmitz case, has resigned from his position with the U.S. attorney's office in the Northern District of Alabama.

Are these stories connected? The motion to seize Schmitz' property was filed on August 4. Roughly two weeks later, Athanas was out the door. Curious.

Is new U.S. attorney Joyce White Vance, who inherited a mess from Alice Martin, trying to put the brakes on a Schmitz prosecution that she probably knows was bogus? Are Martin loyalists unhappy about it, using The Birmingham News to fire back at Vance?

If Vance tries to clean up the sleaze pit in Alice Martin's former domain, look for Martin's favorite news outlet, The Birmingham News, to come after Vance with critical coverage.

Bradley Arant Was Victim of Scam
We recently reported that a Birmingham law firm was the victim of an online scam. Now we know the identity of the firm. It was Bradley Arant Boult & Cummings, one of the city's more hallowed legal outfits.

The Nashville Tennessean reports that Bradley Arant got suckered for $400,000, but recovered the funds with the help of the FBI.

Interestingly, Bradley Arant fell for a debt-collection scheme, but the firm's Web site does not list debt collection as one of its practice areas. Did the firm just get greedy--and stupid?

If so, we shouldn't be surprised. And the sucker punch couldn't have happened to a nicer bunch. Bradley Arant emits a familiar Republican stench. The firm includes Robert J. Campbell, son-in-law of Governor Bob Riley and husband of Minda Riley Campbell. Matthew Lembke, another close ally of Bob and Rob Riley, is at Bradley Arant. You might recall that Lembke joined Rob Riley in filing flimsy affidavits in an effort to counter the revelations of Siegelman-case whistleblower Jill Simpson.

Bradley Arant has raked in serious bundles of cash under the Riley administration--much more on that coming in a future post--so to see them cough up some of it is rather amusing.

Scrushy's Assets Prove Elusive
Lawyers for HealthSouth shareholders are having trouble getting their hands on Richard Scrushy's assets in an effort to satisfy a $2.8 billion judgment against the former CEO.

Reports The Birmingham News:

Homes in Vestavia Hills and Lake Martin have been "stripped bare" of furniture, antiques, silverware and other valuables, according to a document filed today. The homes were seized earlier, along with 20 vehicles and various personal items.

Isn't that too bad? I've got to hand it to Scrushy. I have no idea what role, if any, he played in the accounting fraud at HealthSouth. But I think he knows the justice system in Alabama is crooked, and he is not happily playing along.

I do know two things for sure:

* Allwin Horn, the judge who handed down the $2.8 billion judgment, is demonstrably corrupt. I've seen it firsthand. I wouldn't trust Allwin Horn to run a corner lemonade stand, and he certainly shouldn't be entrusted with a legal matter of any substance.

* Attorney Rob Riley, son of Governor Bob Riley, is in the middle of the various HealthSouth lawsuits on the plaintiffs' side. And documents in federal court indicate that Riley, while fighting health-care fraud on one hand, is owner of a company that commits health-care fraud on the other.

If Scrushy can successfully thumb his nose at the Allwin Horns and Rob Rileys of the world, I say good for him.

Scrushy Is Determined to Clear His Name
Speaking of Richard Scrushy, he says in a letter to Fox Business that he is determined to clear his name in the Don Siegelman case.

The Birmingham News reports:

"First, I am innocent of the charges," Scrushy writes. "I did not commit the crimes. Based on the information we now have, the prosecutors knew there was no crime; so, they created what they called a crime. They coached and programmed a witness to say what they needed him to say to get the conviction."

You can read the full letter here.

Did the 11th Circuit Cheat Alex Latifi?
The U.S. 11th Circuit Court of Appeals, in a 2-1 three-judge panel ruling, has reversed a Birmingham federal judge's order granting Huntsville defense contractor Alex Latifi $360,956 in attorney fees after he beat criminal arms-export charges.

The appeals court said the award was outside the scope of the law that Congress designed to provide relief in civil asset-seizure cases. It said the law did not allow for fee-shifting from the costs of a criminal defense to a civil-forfeiture defense.

The three-judge panel obviously was split on the matter, and a lawyer for Latifi says the issue probably is not settled. Reports the Huntsville Times:

Jim Barger, one of Latifi's attorneys, said they will review the decision, but he expects they will ask the full 11th Circuit Court to hear argument.

"This is a case of first impression," Barger said. "No other court in the country has considered this. It will affect every parallel criminal and civil action from here on out."

Did the 11th Circuit cheat Latifi? That's a tough question to answer because the opinion is long and complex. You can read it here.

As we have shown in our coverage of the Don Siegelman case, the 11th Circuit is not above cheating certain parties. And two members of the Siegelman panel--James C. Hill and J.L. Edmondson--also were on the Latifi panel. That is suspicious.

But it should be noted, that Hill cast the dissenting vote in the Latifi matter. And this ruling was on a technical matter regarding attorney fees and civil-forfeiture cases. It does not mean that Latifi will not eventually receive a sizable chunk of attorney fees related to the criminal matter. From the opinion:

We note that Axion and Latifi’s motion for attorney fees and costs pursuant to the Hyde Amendment filed in the related criminal case on December 12, 2007, remains pending. The district court stayed all further proceedings in the criminal case until this court issued the instant decision. Upon remand of this case, the district court may want to consider Axion and Latifi’s motion for attorney fees and costs in the related criminal proceeding.

For now, it looks like Alex Latifi still could come out OK on this issue. We will be watching.

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