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Tuesday, June 18, 2024 | Back issues
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Prosecutor Upbraided for Handling of Fraud Case

DALLAS (CN) - Claims of political favoritism led a judge to hold a district attorney in contempt and nix mortgage fraud charges against an heir to the Hunt oil fortune.

Judge Lena Levario wanted Dallas County District Attorney Craig Watkins to answer questions under oath regarding the alleged prosecutorial misconduct on Thursday. Watkins took the stand but declined to answer questions, citing attorney-client and work-product privileges. Levario then dismissed the charges against Al Hill III, the great-grandson of oilman H.L. Hunt.

In a 2009 indictment, Hill faced charges of having submitted false documents when applying for a $500,000 home-equity loan. Defense attorneys said, however, that Watkins filed the charges as a favor to his friend, Dallas attorney Lisa Blue. They say Blue had represented Hill in litigation over the family fortune, then sued him for attorneys' fees.

Levario had said the mountain of evidence against Watkins' office "smell[s] really bad" and that his refusal to testify deprived Hill from having a meaningful hearing on his motion to dismiss.

Hill's attorney, Irell Manella partner John Hueston applauded the dismissal for bringing "a gratifying end to a long and difficult defense investigation into prosecutorial misconduct and official corruption."

"We praise the judge for her courage in affirming that District Attorney Watkins is not above the law," Hueston said in a statement.

The defense claimed to have discovered phone records showing numerous conversations between Watkins and Blue in the days immediately before Hill's indictment. They said Blue had contributed to Watkins' election campaigns and held fundraisers in her home.

"The charges were suspect because the loan had been repaid in full and the bank who provided the loan did not complain," Hueston said in a statement. "In a deposition, Blue acknowledged she received several calls from Watkins, including one in which he asked whether she was still 'interested' in an indictment of Albert Hill III and his wife, Erin."

Blue refused to testify in the case in February, invoking her Fifth Amendment right against self-incrimination.

Defense attorneys said several assistant district attorneys admitted on the stand that Watkins was an active participant in a meeting to determine whether to indict the Hills. Assistant District Attorney Stephanie Martin allegedly admitted her notes were initially skeptical of the case against the Hills, but she was persuaded to pursue it anyway by her superiors, the defense said.

Levario found that Martin either had a bad memory, or "at worst, she lied."

The judge held Watkins in contempt weeks after he had been served with a subpoena.

"His representatives first asserted a Nixonian 'executive privilege,' and then reported to the court that he was 'too sick' to testify," defense attorneys say. "Following a three-week continuance to allow Mr. Watkins to recuperate from his unspecified illness, during which the State filed several desperate and unsuccessful petitions with the appellate courts seeking to 'stay' the proceedings, we returned last Thursday to resume the evidentiary hearing."

Assistant District Attorney Russell Wilson said Watkins office will appeal the Levario's ruling and will consider indicting Hill a second time, the Dallas Morning News reported.

"We believe this is an absolute travesty for justice in Dallas County," Wilson reportedly said Thursday after the dismissal. "The judge, in our view, went well outside her authority."

Wilson deemed Hill's defense attorneys "a slick, financial machine" and said the judge's ruling was a "bought result" and "special treatment" that other defendants do not receive.

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