A former gold shop owner who had a falling out with a gold-buying business partly owned by St. Tammany Parish District Attorney Walter Reed has sued Reed and his partner, Yancie “Bubba” Moseley III, in federal court, accusing them of racketeering.

The suit, filed Monday, says Moseley solicited Eric Cazaubon and other gold shop owners by saying they could get help with legal troubles because of Reed’s position — a claim the suit says Reed knew about or should have known about.

Cazaubon, 51, was on active probation in 2010 when Moseley approached him about selling gold to MR Precious Metals — the company owned by Reed and Moseley — from a shop Cazaubon had just opened in Slidell.

Moseley flashed a badge and pressured Cazaubon to sell his gold to MR Precious Metals, according to the suit, making it clear the offer wasn’t optional.

When the relationship soured about a month later over a disagreement about the price of a ring, Cazaubon claims that he was set up for retaliation.

His house was searched by law enforcement on Oct. 7, 2010, and no contraband was found. But about a week later, his business and home were raided, and he was charged with violating parole because of a stun gun and knife found at his business and a marijuana cigarette found at his home.

He also was accused of violating the law regulating secondhand gold sales.

Cazaubon claims that the marijuana was planted at his house and that no evidence was ever produced to show that he sold stolen gold to Moseley. But his probation was revoked, and he spent three years in jail.

While Reed has recused himself from prosecuting cases where he has a relationship with one of the parties involved, he did not do so in Cazaubon’s case or in a 2012 DWI case involving Moseley.

Morgan Stewart, a spokesman for Reed, said the district attorney has never met Cazaubon and never heard his name before recent media reports. “The idea that he used his office to inflict legal retribution against a man he never heard of is ridiculous,” Stewart said. “This is a frivolous lawsuit by Mr. Cazaubon, who goes so far as to claim his probation officer planted drugs in his home. This is clearly a man who is attempting to relitigate his drug conviction in the wake of a wave of negative media stories aimed at Mr. Reed. Nothing else about this lawsuit deserves comment.”

Cazaubon’s probation officer, Steven Everly, did not return calls for comment. The St. Tammany Parish Sheriff’s Office, which participated in the raids, cited its policy against talking about pending litigation.

Moseley, reached by phone, denied any wrongdoing, saying Cazaubon is a crook and the lawsuit is frivolous.

But apparently Cazaubon’s claims piqued the interest of FBI agents investigating Reed’s office, which is the subject of a federal grand jury inquiry.

Moseley said the FBI contacted him after The New Orleans Advocate and WWL-TV reported on Reed’s http://www.theneworleansadvocate.com/home/9352941-172/das-gold-business-included-partnership">gold business and Cazaubon’s claims in June. He said he met with agents at his home and “answered every question” the FBI asked.

His record is clean, Moseley said, and he has run a reputable business.

But the lawsuit claims that MR Precious Metals has been engaged in illegal practices and that Reed was made aware of it by a longtime employee, Sonny Allen, whose son, Tim Allen, worked for the gold-buying business for a time.

Neither of the Allens could be reached for comment Wednesday. But the suit says that the younger Allen was concerned that MR Precious Metals knowingly purchased stolen gold and failed to comply with reporting and identification processes for used gold sales — information he took to his father. The elder Allen reported those concerns directly to Reed, the suit says, but Reed “took no action, confirming his knowledge of the illegal and unethical business practices of Moseley and MR Precious Metals LLC.”

Allen retired from the District Attorney’s Office late last year. He was one of handful of employees included in a special http://theadvocate.com/csp/mediapool/sites/Advocate/assets/templates/FullStoryPrint.csp?cid=9938971&preview=y//">retirement program set up by Reed that was completely paid for by public money.

The lawsuit claims that MR Precious Metals engaged in a pattern of racketeering to improperly gain market share and exercise control over the used gold market in south Louisiana and south Mississippi.

Among other accusations, the suit says that one business owner decided not to open a gold-buying business because of Moseley’s tactics.

RICO cases more commonly involve criminal charges, said Michael Fawer, Cazaubon’s attorney. As examples, he pointed to former New Orleans City Councilwoman Renee Gill Pratt, whom Fawer unsuccessfully defended when she was prosecuted under the RICO statute, and Telly Hankton, an alleged crime boss who operated in New Orleans and is facing trial on RICO charges.

But the RICO statute also allows for civil prosecution, Fawer said, and it provides for triple damages.

Reed’s outside business dealing have come under heavy scrutiny recently, along with his campaign finance spending and other issues. He announced this summer that he would not seek a sixth term in office.

Reed has been involved with MR Precious Metals since its inception, according to his 2010 financial disclosure form. While it’s not clear how much income the side business generates for Reed, the highest-paid DA in the state, additional income from his gold and private law practice is listed in six figures. The suit claims Reed receives $10,000 per month from the gold business, but cites no source for that information.

Rafael Goyeneche, president of the Metropolitan Crime Commission, criticized Reed for doing business with Cazaubon in the first place, saying that as a general rule, officials of any law enforcement agency — including prosecutors — should avoid associating with people who have a criminal history.

Editor’s note: This story was changed Oct. 2 to reflect that Walter Reed had decided against seeking a sixth term, rather than a seventh.

Follow Sara Pagones on Twitter, @spagonesadvocat.