| Ky. Judge: Fen-Phen Lawyers Owe at Least $62 Million to Former Clients
Three attorneys accused of bilking their clients in a diet drug settlement must repay at least $62.1 million in settlement funds and interest, a Kentucky judge ruled Friday. Special Judge William Wehr ordered William J. Gallion, 56, Shirley A. Cunningham Jr., 52, and Melbourne Mills Jr., 76, to repay $42 million taken from the settlement and $20.1 million in interest. Wehr said the interest was 8 percent over the six years the attorneys had the funds. The attorneys are being sued by about 400 former clients who claim the lawyers took too much money as part of a $200 million fen-phen settlement. Gallion and Cunningham own a 20 percent stake in Curlin, who won the second leg of the Triple Crown in May. A federal grand jury indicted the attorneys last month, charging them with conspiring to commit wire fraud in representing more than 400 people in a lawsuit over the diet drug.
2 of 3 lawyers in fen-phen case appeal order they stay in jail
Two of three suspended lawyers accused of bilking clients out of millions in a diet-drug lawsuit settlement have appealed a federal judge's surprise decision that sent all three to jail last week. William Gallion and Shirley Cunningham Jr. filed notices of appeal yesterday in federal court in Covington. The appeal goes to the 6th U.S. Circuit Court of Appeals. Gallion, Cunningham and Melbourne Mills Jr. were indicted in June on one count each of conspiracy to commit wire fraud in connection with a $200 million diet-drug settlement. The indictment alleges that the three, who had practiced law in Lexington, took $64 million of the settlement that should have gone to 440 plaintiffs who sued diet-drug maker American Home Products. The plaintiffs alleged that the diet drug fen-phen damaged their hearts.
Judge jails three fen-phen lawyers
A federal judge in Covington today threw three central Kentucky lawyers in jail as they continued to ask that their criminal trial on fraud charges be delayed. U.S. District Judge William O. Bertelsman warned the three that delaying the trial date would result in revocation of their bonds. After a recess, he carried out the threat. The three, Melbourne Mills, 76, William Gallion, 56, and Shirley Cunningham Jr., 52, are accused of bilking 440 clients out of $64 million in a settlement over use of the diet drug known as fen-phen. A trial in federal court on those counts was set to begin in October. Bertelsman moved the trial to Jan. 7; they could remain in jail until that time unless their bond is reinstated. The three face up to 20 years in prison if convicted. Because the money is still in their hands, Bertelsman said, they would have a tremendous incentive to delay.
Judge may delay fen-phen case
More than 400 plaintiffs argue in the civil lawsuit that the three lawyers cheated them out of their share of a settlement over the diet drug. They are seeking restitution in the case set for trial in September in Boone Circuit Court.
But fen-phen attorneys William J. Gallion, Shirley A. Cunningham Jr. and Melbourne Mills Jr. have asked Boone Senior Judge William Wehr to delay the civil case so the three lawyers wont be forced to incriminate themselves while awaiting trial on federal fraud charges, according to court records.
Prominent Cincinnati lawyer Stan Chesley also is a defendant in the civil suit but is not facing any criminal charges involving the settlement over the diet drug that has been linked to heart problems.
Gallion, Cunningham and Mills were indicted June 14 on charges they defrauded clients of $65 million.
Judge: Lawyers owe at least $62 million to former clients
Three attorneys accused of bilking their clients in a diet drug settlement must repay at least $62.5 million in settlement funds and interest, a judge ruled Friday. Special Judge William Wehr ordered William J. Gallion, 56, Shirley A. Cunningham Jr., 52, and Melbourne Mills Jr., 76, to repay $42 million taken from the settlement and $20.5 from they put into a corporation, the Kentucky Fund for Healthy Living. Wehr said the attorneys must also pay 8 percent interest over the six years they had the money. The attorneys are being sued by about 400 former clients who claim the lawyers took too much money as part of a $200 million fen-phen settlement. Gallion and Cunningham own a 20 percent stake in Curlin, who won the second leg of the Triple Crown in May.
Judge: Fen-Phen Lawyers Owe $62 Million
Three attorneys accused of bilking their clients in a diet drug settlement must repay at least $62.1 million in settlement funds and interest, a judge ruled Friday.
Special Judge William Wehr ordered William J. Gallion, 56, Shirley A. Cunningham Jr., 52, and Melbourne Mills Jr., 76, to repay $42 million taken from the settlement and $20.1 million in interest. Wehr said the interest was 8 percent over the six years the attorneys had the funds.
The attorneys are being sued by about 400 former clients who claim the lawyers took too much money as part of a $200 million fen-phen settlement.
Gallion and Cunningham own a 20 percent stake in Curlin, who won the second leg of the Triple Crown in May.
A federal grand jury indicted the attorneys last month, charging them with conspiring to commit wire fraud in representing more than 400 people in a lawsuit over the diet drug.
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