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A federal judge in Orlando, Fla., has set aside a judgment of at least $9 million against disbarred attorney F. Lee Bailey for taking attorney fees from a pot of money that he knew was subject to forfeiture by the government. “The clerk shall enter final judgment providing that the plaintiff, the United States of America, shall take nothing on its claims against the defendant, F. Lee Bailey,” wrote U.S. District Judge Anne C. Conway in a 41-page order issued Wednesday. Conway also ordered the government to pay all of Bailey’s legal costs in the case. Orlando lawyer Richard Lee Barrett, who represented Bailey in the case, said on Thursday that he was “shocked” by the decision. Barrett, of Barrett Chapman & Ruta, said of the judge, “My hat’s off to her. She’s a very studious jurist.” Bailey, who once practiced law in West Palm Beach, Fla., and lived near there in the posh oceanside community of Manalapan, now resides in Prescott, Mass. He got into trouble with the government in 1998 while defending television infomercial pitchman William McCorkle and his wife, Chantal, on fraud charges. At the time, the McCorkles transferred $2 million to Bailey and other attorneys for their legal defense. After the government claimed the money should be forfeited to the U.S., Bailey sought to keep it by filing a claim to a superior title, according to court records. U.S. District Judge Patricia Fawsett of Orlando sided with the government in 2000. The way her order was written, however, federal prosecutors in Orlando had to sue Bailey, alleging conversion and civil theft. They sought punitive damages. In March this year, after a four-day trial, a jury awarded the government $3 million in punitive damages after finding Bailey, who gained fame representing clients such as Dr. Sam Sheppard, Boston Strangler suspect Albert DeSalvo, Patty Hearst and O.J. Simpson, obtained the money by fraud or gross negligence in “wanton disregard of the government’s right to possession.” The jury’s punitive award was in addition to the $2 million Fawsett decided earlier in summary judgment belonged to the government. The ruling on punitive damages also allowed for a trebling of the $2 million assessed by Fawsett, bringing the total Bailey was liable for to $9 million. Conway, who presided at the trial last March, was asked by Bailey to reconsider the jury’s verdict on April 29, and the earlier grant of summary judgment by Fawsett. Conway’s order was a sweeping victory for Bailey. The judge tossed the summary judgment in favor of the government, finding that Bailey was “entitled to judgment as a matter of law on the government’s claims of conversion and civil theft.” She also set aside the punitive damages as “unwarranted by the evidence.” Steve Cole, a spokesman for the U.S. Attorney’s Office in Orlando, said the government is reviewing its options, which include acceptance of the decision, asking the judge to reconsider or filing an appeal to the 11th U.S. Circuit Court of Appeals. Bailey was disbarred by Florida in 2001, and by Massachusetts last year for his handling of shares of stock in a Canadian pharmaceutical company owned by convicted drug smuggler Claude Duboc, also a former client. The McCorkles were convicted in November 1998 on 151 counts of fraud and other charges. Each was sentenced to 24 years in prison.

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