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‘It’s not over yet,’ says famed defense lawyer F. Lee Bailey after filing for bankruptcy

In this Oct. 3, 1995, file photo, defense attorney F. Lee Bailey, left, looks on as O.J. Simpson, center, reacts as he is found not guilty of murdering his ex-wife Nicole Brown. (Myung J. Chun/Daily News via AP)
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For those who’ve not followed the fortunes — and more recently the misfortunes — of F. Lee Bailey, it might have come as a shock to hear that Friday he filed for bankruptcy in a federal court in Maine. His assets: “A car worth less than two grand,” he told The Washington Post via telephone Sunday, “and some personal property worth less than five and a condo with a mortgage.” His liabilities: In excess of $5 million, owed to the IRS. And since the IRS imposes interest and penalties every day a taxpayer fails to pay, the debts were mounting rapidly. “My tax case finally ran out of string,” he said, “and there was no option left but to live with the judgments or to get rid of them through bankruptcy.”

For those who were not around for the exploits of the fabled criminal defense lawyer, from the 1960s through the ’90s, when he was defending others rather than himself, perhaps FX network’s “The People v. O.J. Simpson will refresh their memory. He is portrayed by Nathan Lane. The flamboyant Bailey was part the legal “dream team” that successfully defended Simpson.

His storied career of hundreds of cases also includes defending Albert DeSalvo, also known as the Boston Strangler; Patty Hearst, the newspaper heiress convicted of bank robbery in 1976, and Ernest Medina, the former U.S. Army captain for whom Bailey won an acquittal in 1971 connection with the My Lai massacre during the Vietnam War.

Perhaps his most important case in terms of its impact on the law was his defense of Sam Sheppard, an Ohio physician convicted in 1954 of murdering his wife. After his trial, Sheppard retained Bailey to take his case to the U.S. Supreme Court where in 1966 he won a retrial because of the media frenzy and hostile coverage surrounding his trial. He was acquitted on retrial. The film “The Fugitive” starring Harrison Ford was loosely based on Sheppard’s case.

Bailey’s conflicts with the government began when Justice Department prosecutors used him to assist them in seizing  millions of dollars worth of assets of a Frenchman, Claude L. DuBoc, ultimately convicted in 1994 of international drug smuggling and money laundering. Among Duroc’s holdings were shares of a pharmaceuticals company, which Bailey, in an unusual deal with federal prosecutors in Florida, agreed to take over and place in a Swiss bank account in Bailey’s name, largely because the government couldn’t own stock and was reluctant to have the shares liquidated for fear of destroying the company. It was expected to increase significantly in value and therefore produce a windfall for the government.

Bailey and another attorney were not paid directly for their work but were instead to take their compensation and expenses from sales of shares in the company. The government then accused Bailey of treating some of the shares as if they were his own, above and beyond covering his expenses and fees and benefiting from the stock’s rapid appreciation. The government argued that he was supposed to be holding the shares in trust for the government. Bailey insisted there was no such agreement.

In the absence of anything in writing, the dispute went to a federal judge who jailed Bailey for 44 days in 1996 until the lawyer could borrow enough money to satisfy the government’s demands for return of the stock. Bailey did not prevail in a suit against the government challenging its actions.

His long running fight over the issue ultimately contributed to his disbarment in both Florida in 2001 and Massachusetts, for among other things, “offering false testimony, engaging in ex parte communications, violating a client’s confidences, violating two federal court orders, and trust account violations, including commingling and misappropriation,” as the Florida Supreme Court wrote. He is no longer able to practice law as a result.

The IRS was also pursuing Bailey for unpaid taxes, including, it argued, money resulting from his handling of the pharmaceuticals shares.

Bailey, representing himself in the U.S. Tax Court, won some points but lost the battle with the IRS, and now faces, he said, a $5 million debt, in part through the buildup of interest and penalties.

“This is a case that began in 1993,” Bailey said from his home in Yarmouth, Maine. “Here we are 2016, and they’re still piling up interest at 12 percent a year.” He said he offered a compromise settlement with the IRS but “they turned it down. You can refuse an offer to settle a tax case because a taxpayer’s a celebrity. Did you know that? That’s the only reason I was given. … He’s a celebrity. The case would look bad for us if we accepted this offer.”

“… It all stems from the old DuBoc case,” Bailey said, “which had me thrown in jail for not turning over all the money I had made in connection with fees for a druggie. The fact is I brought the government a total of over $5o million they wouldn’t have otherwise gotten.”

Asked if he had made any mistakes, Bailey said only one: He did not get the terms of his agreement with the Justice Department in the DuBoc case in writing, which he said, allowed them to put their own gloss on it.

Bailey, a former Marine Corps pilot, was at one point a wealthy man, who owned airplanes, wrote best-selling books, hosted a television program and collected large fees from representing plaintiffs in liability suits, including one involving a teenager in Wisconsin killed by a moving van on her way to the prom.

But, he said, “I never had a big bank balance. I always assumed that the pile of gold, as soon as it got diminished, would be replenished, replaced by something else, and there were days when that was almost true. If you were a very top flight lawyer in criminal law you get some very substantial fees. That was true until the DuBoc debacle,” he said. 

Bailey said he runs a small consulting business, lives by the water not far from Portland and is generally content.

“The only thing that troubles me and will trouble you down the road is the possibility of dementia. I watch “Jeopardy” almost every night to see if my memory is staying with it and play a few computer card games to see if i can still solve problems and at 83 that still seems to be unblemished.”

For years, however, Bailey’s name and his cases and his TV appearances were so familiar to Americans that he often featured in “Jeopardy” answers on the show:

1984: “SCIENCE $400: You might have to put F. Lee Bailey on one to admit he had a show about one. (What are lie detectors?)

1991: “LAWYERS $600: This defender of Albert DeSalvo, Dr. Sam Sheppard & Capt. E. Medina is now a spokesman for Dictaphone.”

1992: “FAMOUS GEMINIS $500: The Boston Strangler Albert DeSalvo had this Gemini man on his case as his lawyer.”

1997: “COURT CASES $1000: F. Lee Bailey took the case of this Ohio doctor & convicted murderer to the Supreme Court in 1966 & won.”

1999: MIDDLE NAME LEE $400: His high-profile clients have included Sam Sheppard, Patty Hearst & O.J. Simpson.”

Bailey filed for Chapter 7 bankruptcy, which provides for the liquidation of assets, with many of them exempt, by a trustee with the funds used as far as they’ll go to repay debts.

Asked how he felt about his misfortunes, Bailey said: “You know when they let me out of prison, the press came around and said ‘don’t you feel humble, don’t you feel sorry for yourself that this judge socked you away?’ I said look ‘I cried because I had no shoes until I met a man who had no feet.’ So I’m in top shape. If you’ve landed an aircraft on an aircraft carrier in the middle of the ocean, there’s very little to fear in life.

“It’s not over yet.”