Kentucky

The Diet Drug fraud trial of Cunningham, Gallion, and Mills continues with the following from the Herald Leader.  Click on title for complete story:

Witness in fen-phen case says rules required secrecy

Three lawyers accused of taking more than $65 million from their former clients could not give their clients details about a 2001 diet drug settlement because it would have violated a confidentiality clause, an expert in class-action litigation testified Monday.

Richard Robbins, an Atlanta attorney who has more than 27 years of experience in class-action law, testified on behalf of William Gallion, Shirley Cunningham Jr. and Melbourne Mills Jr. in federal court in Covington on Monday. Robbins said the three lawyers were bound by the settlement agreement with fen-phen manufacturer American Home Products not to discuss details of the settlement. If details of the settlement had become public, the three lawyers could have been fined, Robbins said.

The three men, who have been on trial since the middle of May on charges of conspiracy to commit wire fraud, are accused of conspiring to keep the bulk of a $200 million settlement from more than 440 former clients who sued diet-drug maker American Home Products alleging the diet drug ruined their hearts and lungs.

Prosecutors allege that as part of the fraud, the three failed to tell clients how much the total settlement was for, threatened many with a fine if they told their family members about the settlement and also failed to tell many that some of the settlement money was going into a non-profit.

The three also failed to notify clients that there was a settlement until after the settlement had been finalized. The three Lexington-area lawyers deposited millions of the settlement money into their own accounts after the settlement was reached in 2001 and then later moved some of that money back into the settlement account after the Kentucky Bar Association issued a subpoena asking about the details of the settlement, the indictment alleges.