Magistrate Recommends Bailey be Held in Contempt Over Legal Fees

By Mike Schneider
Associated Press

ORLANDO – A federal magistrate Friday recommended that attorney F. Lee Bailey be held in contempt for refusing to turn over $2 million in legal fees to the federal government.

The recommendation will be forwarded to a U.S. District Court judge, who could order Bailey jailed if he doesn’t return the money. Bailey has 10 days to file an explanation of why he shouldn’t be held in contempt.

The disputed fees do not belong to Bailey because they were illegally earned and were laundered into a Cayman island bank account by his client, convicted infomercial pitchman William J. McCorkle, U.S. Magistrate James Glazebrook said.

"Bailey knew or should have known that his client’s telemarketing scheme was a fraud, and that it was punishable as a felony under federal law," Glazebrook wrote in a 68-page report. "The privilege to practice law is not a license to share in the proceeds of fraud."

The magistrate also recommended that Bailey be investigated for violating Florida Bar rules regarding attorney-client confidences. During a contempt hearing in October, Bailey told The Orlando Sentinel about his dealings with a government witness who had contacted Bailey for legal advice. The witness, Randy Glass, had been scheduled to offer testimony contradicting Bailey’s claim that he had few assets.

A spokeswoman for Bailey said the attorney wouldn’t comment on the magistrate’s report, and Bailey’s attorney didn’t return three phone calls. In court filings, Bailey has accused Glazebrook, a former federal prosecutor, of bias in favor of the U.S. Attorney’s Office.

A spokesman for the U.S. Attorney’s Office in Orlando said he couldn’t comment because the case is still pending.

During the October contempt hearing, Bailey testified he would be unable to pay the $2 million because he had no income for most of last year after putting his legal practice on hold to care for his wife, Patricia who died of cancer. He said he has relied on loans from friends and relatives to pay expenses.

The magistrate, however, said he didn’t believe Bailey’s testimony that Bailey had failed to prove he couldn’t pay back the money.

"Having observed Bailey’s testimony for many hours, this court has no confidence in its truth," Glazebrook wrote. "Bailey’s testimony about assets and income was evasive, inconsistent, strident, argumentative and lacking in credibility."

McCorkle and his wife, Chantal, were sentenced last year for swindling customers by selling them pamphlets and tapes that promised to make them rich through real estate schemes. They are serving 24-year prison terms and were ordered to turn over $10.6 million in assets.

Bailey, who has earned wide notice representing O.J. Simpson, Patty Hearst and Dr. Sam Sheppard, previously has faced contempt charges over fees.

In 1996, he spent 43 days in jail for contempt of court stemming from a dispute over $16 million in stock owned by a client and for withdrawing $3 million from a Swiss bank account established with the stock without court permission.

The stock belonged to a client, millionaire drug smuggler Claude Duboc, who was convicted in a drug case and ordered to forfeit his assets to the government. Late last year, the Florida Bar accused him of violating ethics rules in his handling of money that belonged to Duboc.