Former Dallas County DA Craig Watkins

Three years after reinstating the mortgage fraud indictments against wealthy oil heir Albert G. Hill III, Dallas’ Fifth Court of Appeals in an about-face recently dismissed all of the charges against him with prejudice due to prosecutorial misconduct by the Dallas County District Attorney’s Office.

Hill’s high-profile dispute is centered on a protracted federal battle involving the management of the Hunt family trusts, of which Hill is an heir. And Hill has long maintained that he was selectively prosecuted for mortgage fraud charges as a favor to his former lawyer, Lisa Blue.

Highlights of the long-running dispute include: a $50 million fee dispute lodged against Hill by Blue, a prominent Dallas lawyer who helped Hill access his trust fund; Blue’s refusal to testify in a state criminal court hearing in which Hill alleged that then-Dallas County District Attorney Craig Watkins brought mortgage fraud charges against him to assist Blue; Watkins’ refusal to testify in the criminal proceeding; and the trial judge’s decision to dismiss the fraud charges in part because of Watkins’ refusal to testify.

In 2013, then-State District Judge Lena Levario dismissed the charges against Hill after concluding that Hill was indeed indicted by Watkins to assist Blue—noting that Watkins was in close and frequent contact with Blue, received contributions and other favors from her shortly before the indictments were returned, and discussed the indictments with her on at least two occasions before they were obtained.

Blue and Watkins, who was defeated for re-election in 2014, have both denied any wrongdoing in Hill’s criminal case.

In late 2014, the Fifth Court in a 2-1 decision reinstated the indictments against Hill after concluding the trial court abused its discretion in dismissing them, because Hill did not make the necessary showing that the indictments brought against him violated his constitutional rights.

“His allegations about the DA’s office’s motivations for prosecuting him amount to speculation with no credible evidence to support his theories,” Justice Ada Brown concluded at the time.

However, in 2016, the Court of Criminal Appeals reversed the Fifth Court, ruling that the trial court did not abuse its discretion in holding the hearing in which Hill successfully quashed the indictments.

“We hold that it was within the trial court’s discretion to conduct a pretrial evidentiary hearing on Hill’s motion to quash and dismiss,” wrote Judge Bert Richardson.

The CCA sent the case back to the Fifth Court to address issues it previously did not reach, including whether the trial court could dismiss Hill’s indictment based on Watkins’ refusal to testify.

And in its Aug. 15 decision on remand, the Fifth Court decided to affirm the trial court’s order dismissing the indictments against Hill with prejudice.

“The facts of this case are egregious and amount to the kind of extraordinary circumstances that warrant the drastic measure of dismissal with prejudice,” Brown wrote in the Aug. 15 decision. “To ensure the state’s decision to prosecute Hill would not be tainted by Watkins’s involvement, the trial judge acted within her discretion in dismissing the indictments with prejudice. Given the prosecutorial misconduct in this case, such a drastic measure was appropriate.”

In a concurring opinion, Justice David Schenck noted that the trial judge could have found that Hill was denied the right to an impartial and disinterested prosecutor in violation of his due process rights.

“The trial judge could have inferred that, but for the relationship Watkins nurtured with Blue, no prosecution would have been pursued,” Schenck wrote.

Chad Baruch, a special prosecutor appointed to handle Hill’s case after the Dallas DA’s office recused itself, said he’s disappointed in the decision but has not yet decided whether to appeal it.

“I’m very surprised by the ruling given that in the first opinion, they considered most of Hill’s argument to be speculative, and now they have changed their minds and determined there must be something more to it,” Baruch said. “It’s just puzzling.’’

George Milner III, a Dallas attorney who represents Hill, is happy with the ruling. “It has been a long time coming,” Milner said. “We hope, with the court’s decision, this long-endured litigation will be brought to a swift close. My client and his family are ready to put this behind them.”

“It is our sincere hope the special prosecutor will close this case in light of the clear ruling of the court of appeals,” Milner added.