Tag Archive for 'settlement'

Fen-phen jury: Gallion and Cunningham guilty on all counts

Published
by
H-L Justice Team
on April 3, 2009
in U.S. District Court
. 11 Comments
By Beth Musgrave - bmusgrave@herald-leader.com

FRANKFORT — After deliberating for two days, seven women and five men convicted William Gallion and Shirley Cunningham Jr. of conspiracy and eight counts of wire fraud.

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

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

This is the second trial for Gallion and Cunningham on charges that they took millions of dollars from 440 former clients in a 2001 fen-phen settlement. Their first trial ended in a mistrial after the jury deliberated for eight days but could not reach a verdict. Melbourne Mills Jr., who was originally charged with Gallion and Cunningham, was acquitted by the same jury.

Prosecutors say Gallion and Cunningham lied and deliberately told half-truths about what happened to the $200 million settlement so all of the lawyers on the case could keep the bulk of the settlement.

Defense attorneys said that Gallion and Cunningham knew little about class-action law at the time the case was settled. If mistakes were made ,those mistakes were unintentional, they argued.

Stephen Dobson, a lawyer for Cunningham, said there was little evidence or testimony that showed that Cunningham was directly involved in the negotiations of the settlement or how the money was disbursed after the case was settled.

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Judge delays Fen-phen retrial until Thursday

Published
by
H-L Justice Team
on March 3, 2009
in U.S. District Court
. 0 Comments
By Steve Lannen - slannen@herald-leader.com

The federal trial of two Lexington-area lawyers accused of bilking their clients out of millions of dollars in settlement money will resume on Thursday.

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

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

Proceedings were suspended until 8:30 a.m. Thursday in U.S. District Court trial in Frankfort due to illness, according to an order filed Tuesday by U.S. District Judge Danny Reeves. The filing does not provide any details about the illness.

Shirley Cunningham Jr. and William Gallion are accused of cheating their former clients out of $94 million in a settlement of the fen-phen diet drug lawsuit. They are standing trial on charges of wire fraud and conspiracy.

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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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City sues insurer over Berry abuse case

Published
by
H-L Justice Team
on January 22, 2009
in Uncategorized
. 0 Comments
By Brandon Ortiz - bortiz@herald-leader.com

The Urban County Government is suing a foreign insurance company for failing to pay five settlements arising from litigation over convicted child molester Ron Berry.

Ron Berry

Ron Berry

The county had an insurance policy with the Insurance Corp. of Ireland, now known as Icarom, from March 1, 1982, to July 1, 1985. The general liability policy insured, among many things, public officials from liability.

The county filed suit against Icarom last week in U.S. District Court in Lexington, saying the insurer has failed to pay claims the city filed over five settlements with plaintiffs. The suit says county officials forwarded depositions and other records to the company in 2005.

Despite several inquiries, the insurance company has yet to say whether it will pay or deny the claim, according to the lawsuit.

The city gave the insurance company an opportunity to participate in the defense of the Berry lawsuits, but it declined, the county’s suit states.

About 200 people since 1998 have sued the county claiming they were sexually abused by Berry when they were children. Berry was the head of the Micro-City Government program for disadvantaged youth from 1969 to 1997.

Berry was convicted of 12 counts of sodomy in 2000. He served a three-year prison term.

The city has settled two lawsuits, and one other is still pending. The first was with four plaintiffs for $450,000, or about $112,000 each. The second was with 17 plaintiffs for $2.4 million, or $143,000 each.

The county’s lawsuit seeks reimbursement for the settlements and litigation costs for five plaintiffs who say they were abused during the term of the insurance policy. The county also seeks unspecified punitive damages from the insurance company.

The five Berry plaintiffs participated in either the lawsuit that settled for $2.4 million or the pending suit in U.S. District Court in Lexington.

The Ron Berry lawsuits claim that county officials knew that Berry was sexually abusing children in the program and failed to stop him.

The county’s lawsuit against the insurance company does not specify how much in damages it is seeking.

Officials with the insurance company could not be reached for comment on Wednesday.

Fayette County sued three other insurers over the Ron Berry litigation in 2001. Court records indicate those suits settled, despite previous statements from the insurance companies that the policies did not cover the type of activity Berry and city officials were accused of.

The terms of the insurance company settlements were not immediately available late Wednesday afternoon.

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Date set for fen-phen lawyers’ second trial

Published
by
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)

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.

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City settles overtime lawsuit with jail officers

Published
by
H-L Justice Team
on August 28, 2008
in Courts
. 8 Comments

By Beth Musgrave
bmusgrave@herald-leader.com

The city has settled a lawsuit about overtime pay for more than 300 current and former Fayette County Detention Center corrections officers.

The details of the settlement — including the total amount — will not be made public until a hearing next week before U.S. District Judge Jennifer Coffman, who must approve the agreement.

Attorney Tom Miller, who represents the corrections officers, confirmed Thursday that the lawsuit was settled earlier this month.

The lawsuit alleges that the city engaged in longstanding, widespread and multiple violations of the federal Fair Labor Standards act and the Kentucky Wage and Hours Act.

Corrections officers were often asked to perform job duties while on their 20-minute lunch breaks but were not paid for the breaks. Officers also were not paid if they had to come in early or had to stay after their eight-hour shifts. Some higher-ranking officers at the jail were required to take compensatory time — additional hours off — instead of overtime.

As part of the settlement, the jail must change its policies to pay people for their lunch breaks if they are required to work, Miller said.

The city had argued that it had not knowingly violated any federal or state labor laws. But the city lost on several key motions — including whether the case could be opened to all current and former jailers.

Eventually, 316 current and former corrections officers joined the lawsuit. Those officers will receive some compensation for previously worked overtime. The formula for providing back pay has not yet been made public.

Susan Straub, spokeswoman for Mayor Jim Newberry, declined to comment on the settlement.

The settlement is just one of many legal troubles surrounding the Fayette County Detention Center. Earlier this year, four current officers and one former officer were indicted on charges that they beat inmates at the facility and then covered it up.

Also, the jail has been named in several civil lawsuits filed by former inmates who allege abuse at the hands of guards.

Miller said the settlement is final but must be approved by Coffman. A hearing is scheduled for Sept. 4 in federal court in Lexington.

Miller said corrections officers are finally getting what has long been due.

“These are people that are educated, dedicated, hard-working, loyal, underpaid and very smart. They do a job that I could never do myself,” Miller said. “That’s the reason that my law firm accepted this job. It’s because we believed in the people, and we believed in their cause.”

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