Ongoing Legal Controversies

Lisa Blue no longer target of investigation by U.S. Attorney's office in Al Hill III mortgage fraud case

Lisa Blue no longer target of investigation by U.S. Attorney's office

Just 10 days after state district judge Lena Levario alleged a conspiracy between Dallas district attorney Craig Watkins and political benefactor Lisa Blue, the U.S. Attorney's office has reportedly ended its criminal investigation against her. 

"Blue is no longer under investigation, and the investigation regarding Blue is closed," reads an August 9 pleading from Blue's attorney, Terence Hart.

The federal investigation stemmed from Al Hill III's accusations that Blue had improperly influenced Watkins in his office's decision to seek criminal indictments against the Hunt Oil heir for mortgage fraud.

 The federal investigation into Lisa Blue stemmed from accusations that she had improperly influenced Dallas DA Craig Watkins. 

Blue seemingly benefited from Hill's indictment, as he was advised not to testify in his own defense in a contentious $50 million lawsuit over legal fees. 

The court ultimately ruled against the Hills and ordered them to pay $21.9 million in attorney's fees; as part of a trio of attorneys, Blue is entitled to around $7.3 million of those funds. 

Levario dismissed the charges against Hill in March when Watkins was held in contempt for refusing to testify about his relationship with Blue and their conversations in the days leading up to Hill's indictment.

Hill's attorneys accused Watkins of prosecutorial misconduct and vindictive prosecution in a successful push to have the fraud charges dismissed. Watkins has since tried unsuccessfully to have the contempt charge dropped and to remove Levario from the case.

However, the Dallas district attorney's office is claiming victory in the federal investigation's conclusion. The U.S. Attorney's office has reportedly closed the case on Blue, saying there is no evidence she violated any federal criminal laws in the Hill case.

No one from the U.S. Attorney's office returned a request for comment on the investigation's status, but Blue's attorney claims she has been cleared.

"Lisa Blue’s vindication further supports the district attorney’s position that there was never improper influence or wrongdoing on the part of the DA’s office regarding the indictment of Al Hill III," DA spokesperson Debbie Denmon said in a statement.

"The evidence that was presented to the grand jury shows a crime could have been committed. District Attorney Craig Watkins had the courage to not turn a blind eye because of the Hills’ financial status."

Judge Levario did not immediately respond to a request for comment on the conclusion of the U.S. Attorney's investigation against Blue. 

In March, the FBI reportedly opened an investigation into Watkins' dealings with Blue on the Hill indictments. Hill's attorney John Hueston confirmed they had provided the FBI with information relating to Watkins' alleged prosecutorial misconduct.

When reached by phone, Katherine Chaumont with the Dallas FBI would not confirm or deny the status of an investigation into Watkins.

Lisa Blue Baron
Attorney and political benefactor Lisa Blue has been cleared by the U.S. Attorney's office. Photo by Hailey Ashmore
Dallas district attorney Craig Watkins
Dallas district attorney Craig Watkins' refusal to testify led to fraud charges being dismissed against Al Hill III. Dallas South News