Tag Archive for ‘Cunningham’ at On the Beat in the Bluegrass

Tag Archive for 'Cunningham'

Closing arguments to begin in fen-phen trial

Published

on April 1, 2009

. 2 Comments

By Beth Musgrave - bmusgrave@herald-leader.com

FRANKFORT — Closing arguments are likely to begin Wednesday in the retrial of two disbarred Lexington-area lawyers accused of taking $94 million from their former clients in a diet-drug settlement.

Shirley Cunningham Jr. (left), William Gallion (right)

This is the second trial on wire fraud and other charges for William Gallion and Shirley Cunningham Jr., and it’s just the latest chapter in the legal saga over what happened to a $200 million settlement in Boone Circuit Court.

In July, a federal judge declared a mistrial after a jury in Covington deadlocked on whether Cunningham and Gallion were guilty of wire fraud. Melbourne Mills Jr., a third lawyer who also was part of the $220 million settlement, was acquitted by the same jury.

Prosecutors say Gallion and Cunningham refused to disclose the amount of the total settlement to their clients, paid them less than they were supposed to and falsely told them that they would go to jail if they told anyone how much they received from the settlement. Gallion and Cunningham, under their contracts with their clients, were to receive approximately a third of the settlement, but they took more than half, prosecutors say.

Defense lawyers say Gallion and Cunningham were inexperienced with mass-tort or class-action law and that any mistakes were unintentional. The former lawyers were following the advice of famed Cincinnati trial lawyer Stanley Chesley and the original judge on the case, they have argued.

The retrial, which began Feb. 19 in federal court in Frankfort, nearly ended in a mistrial for Gallion after his lawyer suffered health problems during the trial. But O. Hale Almand, a Georgia attorney who has represented Gallion in both trials, was able to return to court, saving his client from a possible third trial.

Jury selected for fen-phen trial

Published

H-L Justice Team

on February 17, 2009

in U.S. District Court

. 5 Comments

Herald-Leader Staff Report

A 12-person jury and four alternates were seated Tuesday in the second trial for two Central Kentucky attorneys accused of cheating their former clients out of $94 million.

Shirley Cunningham Jr. (left), William Gallion (right)

Opening statements will begin at 9 a.m. Wednesday in U.S. District Court in Frankfort in the trial of disbarred lawyers Shirley Cunningham Jr. and William Gallion, who are charged with wire fraud and conspiracy. Statements are expected to last four hours.

Federal prosecutors said they expected to call as many as four former clients in the afternoon. Cunningham and Gallion are accused of taking settlement money that should have gone to 440 clients, who had sued the maker of the diet drug fen-phen for heart defects. The suit settled for $200 million in 2001.

The trial could last six weeks. The lawyers’ first trial, last July, resulted in a hung jury. Another defendant, Melbourne Mills, was acquitted.

Date set for fen-phen lawyers’ second trial

Published

H-L Justice Team

on September 11, 2008

in Courts

. 4 Comments

COVINGTON — Two Lexington-area lawyers accused of taking millions of dollars from their former clients in a diet drug settlement pleaded not guilty Thursday to eight new charges of wire fraud.

Last week, a federal grand jury indicted William Gallion and Shirley Cunningham Jr. on charges of conspiracy and eight new charges of wire fraud.

Shirley Cunningham Jr. (left), William Gallion (right)

The men were charged in 2007 with one count each of conspiracy to commit wire fraud.

The two men were arraigned on the new charges Thursday morning in U.S. District Court.

Gallion signed paperwork for a $2.5 million property bond. He was released Thursday afternoon. Cunningham already had been released. Cunningham already had been released.

U.S. District Judge Danny Reeves set a trial date for Nov. 17.

A mistrial was declared in their first trial, in July, after a jury could not decide whether Gallion and Cunningham were guilty of conspiracy to commit wire fraud.

Gallion, Cunningham and a third lawyer, Melbourne Mills Jr., were charged with one count each of conspiracy to commit wire fraud in 2007.

A jury acquitted Mills of all charges in July. Cunningham was released from the Boone County Jail on bond on Aug. 27.

The lawyers sued fen-phen maker American Home Products in Boone Circuit Court and settled the case for $200 million in 2001. Federal prosecutors say Gallion and Cunningham took $94 million — an increase of nearly $30 million from the previous indictment — that should have gone to 440 former clients, according to the indictment.

The indictment outlines a series of monetary transactions between Cunningham’s and Gallion’s bank accounts and accounts designated solely for client money.

If convicted, Gallion and Cunningham could face a maximum of 180 years in prison. However, it is rare for someone to get the maximum sentence.

Bond reduced for two fen-phen attorneys

Published

H-L Justice Team

on August 22, 2008

in U.S. District Court

. 1 Comment

By Brandon Ortiz
bortiz@herald-leader.com

COVINGTON — A federal judge has reduced bond for two Lexington-area lawyers accused of pocketing millions of dollars that should have gone to their former clients in a diet-drug settlement.

Bond for William Gallion was set at $2.5 million, and Shirley Cunningham Jr.’s bond was set at $1.25 million.

The two men have been in the Boone County Jail awaiting their second criminal trial.

Gallion and Cunningham filed motions last month asking a federal judge to release them from jail so they can help their attorneys prepare for their second trial. Their first trial ended July 3 with a deadlocked jury.

Gallion argued in his earlier motion that he has little money for bond or to flee because his assets have been garnisheed by a civil lawsuit over his handling of a $200 million fen-phen class action lawsuit settlement.

Gallion and Cunningham also argued that they should be released from jail because the first jury couldn’t decide whether the two were guilty of conspiring to commit wire fraud. The jury foreman later said the vote was 10 to 2 to acquit the two men.

They are accused of taking millions of dollars that should have gone to 440 former clients in a 2001 fen-phen settlement in Boone Circuit Court. A third defendant, Lexington-area attorney Melbourne Mills Jr., was found not guilty by the same jury.

The two attorneys have been held at the Boone County Jail since August 2007.

The 6th U.S. Circuit Court of Appeals upheld U.S. District Judge William Bertelsman’s decision to jail the two men and to set bond for Gallion at $52 million and for Cunningham at $45 million. Bertelsman declined the two men’s request to be released after was declared. But Bertelsman later stepped down from the case, and U.S. District Judge Danny Reeves was assigned to it.

In their motion, federal prosecutors point out that Bertelsman, who oversaw the six-week trial, said there was even more evidence and concern that the two men would flee.

On Friday, Reeves laid out several restrictions on travel. Gallion and Cunningham have to be subject to home detention, they’ll be subject to GPS monitoring and they will have to keep logs of visitors and telephone calls. Also, their computer usage will be monitored. Reeves said the men can give out gifts only up to $1,000 to make sure they’re not liquidating or hiding assets. The judge also said he might appoint someone to monitor their business assets.

Reeves said if they violate any condition of the bond it will be forfeited.

Attorneys for both men said they did not know whether their clients would be able to post bond.

COMMENT POLICY

Although we do not have any obligation to monitor comments on this blog, we reserve the right at all times to check this blog and to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable to us in our sole discretion and to disclose any information necessary to satisfy the law, regulation, or government request. We also reserve the right to permanently block any user who violates these terms and conditions. All threats to systems or site infrastructure shall be assumed genuine in nature and will be reported to the appropriate law enforcement authorities.

CONTRIBUTORS

Ashlee Clark is the Richmond bureau reporter for the Herald-Leader. She has covered general assignments in Madison, Clark, Estill, Powell and Montgomery counties since she joined the newspaper in September 2007. Ashlee, a Louisville native, is a graduate of Western Kentucky University, where she received degrees in journalism and sociology.

Shawntaye Hopkins is the Herald-Leader’s police reporter, covering local law enforcement, fire and EMS and breaking news. She joined the staff in September 2006 as the newspaper’s night police reporter. Shawntaye, a Louisville native, graduated from Western Kentucky University where she studied journalism and criminology. Shawntaye resides in Lexington.

Delano Massey is the Herald-Leader’s Regional Editor. He works closely with the paper’s bureau reporters and police and courts reporters to plan coverage, pursue breaking news and seek out enterprise stories. A Northeast Ohio native, Delano started his journalism career as a night cops reporter at the Belleville News-Democrat. In 2003, he made the trek to Lexington to take the reins as the newspaper’s daytime cops reporter. Delano, a graduate of the University of Akron, has won numerous awards for breaking news, spot news and investigative journalism.

On the Beat in the Bluegrass