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.
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