Tag Archive for 'Gallion'

Closing arguments to begin in fen-phen trial

Published
by
H-L Justice Team
on April 1, 2009
in U.S. District Court
. 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)

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.

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Jury selected for fen-phen trial

Published
by
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)

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.

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Bond reduced for two fen-phen attorneys

Published
by
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.

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