Legal News

Fen-Phen Lawyer Trial: Gallion?s Former Associate Testifies

By Dan Slater

For those of you who are envious of BigLaw bonuses, consider this: For working on the Fen-Phen settlement, David Helmers — a Kentucky SmallLaw associate fresh out of law school — received a $3 million bonus, and a new car.

That was in 2001. Now, Helmers, 39, is the government’s first witness in the trial of his former boss, William Gallion (right), and two other Kentucky lawyers who all face up to 20 years in prison if found guilty of conspiracy to commit wire fraud for misappropriating $65 million of a $200 million settlement. (Here’s a story from the Cincinnati Enquirer.)

Though Helmers described himself as a mere junior member of Gallion’s firm, Gallion’s attorney, O. Hale Almand, has called Helmers “the principal architect” of diverting extra money from the settlement to the lawyers. Helmers testified that he started clerking for Gallion’s firm while attending law school at the University of Kentucky. He became a junior associate after graduation and was making $50,000 a year when the Fen-Phen settlement was reached in May 2001 — before a $25,000 raise and the fat bonus.

Helmers testified that he offered the plaintiffs less money than they were entitled to under the settlement agreement, and that Gallion specifically told him not to tell the plaintiffs that the suit was settled for $200 million. He also said that a letter, required under Kentucky court rules, informing the plaintiffs that the case had been certified as a class action was drafted, but never sent out.

Helmers, who said he wasn’t offered immunity in exchange for his testimony, is set to be cross-examined today.

Full post as published by Law Blog - WSJ.com on May 16, 2008 (boomark / email).