Diaz Found Not-Guilty of Tax Evasion

JACKSON, Miss. (AP) -- Mississippi Supreme Court Justice Oliver Diaz Junior has been found innocent of federal tax evasion charges -- likely ending a legal saga that has kept him off the bench for more than two years.

A federal jury returned the verdict yesterday after deliberating for an hour.

Diaz says he hopes to be back at work soon.

Diaz was cleared by another federal jury last summer in a judicial bribery case that also involved two former Gulf Coast trial court judges and a high-profile trial lawyer. The tax-evasion indictment against Diaz was handed down in March 2004 but was not made public until the bribery trial ended this past August.

He has been suspended, with pay, since December 2003. A tribunal of seven trial-court judges will decide whether to lift that suspension and let him go back to work. Diaz's attorney, Robert McDuff, says that could happen in the next few days.

Diaz had been accused of underreporting his income by more than $25,000 in 1999.

The government also alleged that in 2000 and 2001 Diaz and his wife, Jennifer, failed to pay more than $42,000 in taxes on income they disguised as "loan repayments" from Diaz's 2000 re-election campaign.

Jennifer Diaz, who is now divorced from Oliver Diaz, has pleaded guilty to tax evasion. She awaits sentencing.

Defense attorneys described Diaz as a disorganized person who left details such as taxes and finances to his wife and who would now knowingly hide income from the government.

Prosecutors said the Diazes found a way to avoid paying taxes on a substantial amount of money by calling it a loan to a campaign.