An indictment handed up in Houston in 2004 accused the attorney, John Claro, and seven others of health insurance fraud. Prosecutors alleged that the defendants fraudulently obtained more than $45 million in premium payments.

Claro faced 54 counts and was arrested by FBI agents. The criminal case was dismissed in 2005.

On July 31, U.S. District Judge Lynn Hughes awarded Claro $391,292 to cover his defense expenses. Claro had sought more. Such payments to former criminal defendants are rare but are allowed by federal law when a prosecution is found to be unjustified or in bad faith.

"This is a lot of money, and it will be paid from the taxpayers' hard-earned funds," Hughes wrote in a scathing opinion. "Some would characterize this as a raid on the treasury. The government can prevent these raids by choosing to be responsible."

The judge called the prosecution of Claro unreasonable and groundless. The judge also found that the prosecution "showed at least a reckless disregard for the truth." The judge ruled that prosecutors misled the grand jury that issued the inaccurate indictment.

"The case against . . . Claro lacked even a semblance of responsible work by the government," the judge wrote. "The misbehavior of the prosecutors costs the taxpayers twice; once in

Claro was represented primarily by Oklahoma City attorney Drew Neville. The judge called Neville a capable, distinguished lawyer who vigorously defended the case.

In a statement from Houston, U.S Attorney Don DeGabrielle said: "While respecting the decision, we disagree with the court's findings, conclusion and ruling. Having now received the court's written findings, this office will be seeking departmental approval to appeal."