Conway also set aside a jury’s punitive damages award to the government of $3 million and ruled Bailey can have his court costs paid by the prosecutors.
“It’s good to have this off my back,” said Bailey, once one of the nation’s best-known defense attorneys for representing clients such as Patty Hearst and O.J. Simpson.
Bailey was sued by federal prosecutors in civil court for the $2 million he and other lawyers took for representing William McCorkle and his wife on fraud charges in 1998.
Prosecutors had claimed the government deserved the money by forfeiture since the funds came from a fraudulent business.
Conway had ruled in January that the money was tainted and, therefore, belonged to the government. The jury levied punitive damages in March.
But in April, Bailey filed a motion asking Conway to reconsider her judgment. Acting as his own attorney in what might have been his last trial, Bailey argued that the trust was legal and the property of the McCorkles.
The U.S. Attorney’s office has not decided on its next move, spokesman Steve Cole said.
“Our options are to accept the order, ask the judge to reconsider her order or we can appeal the order,” said Cole, who added that he was unsure of the timetable for any decision.
Bailey, 70, was disbarred in 2001 in Florida and in 2002 in Massachusetts for the way he handled 600,000 shares of stock owned by a convicted drug smuggler in 1994. Bailey spent about six weeks in federal prison in 1996 after refusing to turn over the stock, contending the government agreed he could keep some of the stock and that he did nothing wrong.
Unless he is reinstated, the earliest time he can apply to the bar again is in 2006 when he will be 73 years old.