By Jessica Dye

NEW YORK, Jan 10 (Reuters) - A dentist acquitted of Medicaid fraud cannot pursue a defamation claim against prosecutors whom he claimed falsified information in a press release announcing his indictment, a Brooklyn federal judge ruled Thursday.

Brooklyn dentist Leonard Morse was ultimately acquitted of the fraud in 2007. He then sued current and former members of the New York attorney general's office over the indictment and the press release, which announced he had been charged in a "million dollar Medicaid fraud."

In a ruling from the bench, Chief U.S. District Judge Carol Amon said Morse had not shown the press release was false, a necessary element of a defamation claim, as well as two other claims Morse brought in connection with the release.

"A showing of falsity is critical for these claims," Amon said in granting the attorney general office's motion to dismiss the claims.

Morse was indicted for Medicaid fraud in 2006 by the New York attorney general's office. Several days after the indictment, the AG's office issued a press release trumpeting his indictment. In 2007, Morse was acquitted of the charges following a bench trial in Kings County Supreme Court.

Morse filed a civil lawsuit against former AG Eliot Spitzer, special assistant attorney general John Fusto, special senior investigator Jose Castillo and senior special auditor investigator Robert Flynn. The lawsuit alleged a range of civil rights violations, including malicious prosecution and deprivation of the right to a fair trial, as well as defamation.

Morse claimed the release stemmed from Spitzer's attempt to prove he was tough on Medicaid fraud during his campaign for New York governor, according to his civil complaint.

Morse said in the lawsuit the release created an avalanche of negative press, forcing him to shutter his dentist practice.

Since the lawsuit was filed, Morse's claims have been pared back in a series of rulings by Amon and Magistrate Judge Robert Levy.

After Thursday's ruling, the only remaining claim is for deprivation of the right to a fair trial, which is proceeding against Fusto and Castillo. That claim accuses them of trumping up fake patient billing records to make it appear that Morse had billed Medicaid repeatedly for the same procedures.

An attorney for Morse, Jon Norinsberg, said he was disappointed by Amon's ruling to dismiss the claims related to the press release. Nevertheless, he said that Morse looked forward to proving the remaining claim at trial.

A spokeswoman for the attorney general's office declined to comment.

A trial is scheduled to begin in Brooklyn federal court on Jan. 28.

The case is Morse v. Spitzer, U.S. District Court for the Eastern District of New York, No. 07-4793.

For Morse: Jon Norinsberg.

For the attorney general: Seth Farber

(This story has been corrected. A prior version misclassified defamation as a civil rights violation.)