Legal News

Remaining Fen-Phen Lawyers Found Guilty of Swindling Clients

By Ashby Jones

Remember this picture? Of course you do. It’s the triptych of the three lawyers accused of scamming their clients out of millions in a huge Fen-Phen settlement. In a trial in Covington, Ky., last year, a jury deadlocked over the fate of two of the defendants, Shirley Cunningham (pictured, left) and William Gallion (pictured, right) and acquitted a third, Melbourne Mills (pictured, center).

The retrial for Cunningham and Gallion started in February in Frankfort, Ky., and today we have a verdict: guilty. Cunningham and Gallion were convicted on all nine counts upon which they were charged, which consisted of eight wire fraud counts and one conspiracy count. The men face up to 20 years in prison. Click here and here for stories from the Cincinnati Enquirer and Bloomberg. Click here, here, here, and here for earlier LB posts.

The crux of the charges against the pair involved whether they had distributed enough of a $200 million fen-phen settlement to their 440 clients. Prosecutors argued that the two men tried to keep well over half of the settlement, an amount that far exceeded the one-third provided by contracts made with the class members.

Lawyers for the two men had argued that they were innocent, and that the defendants were inexperienced in handling large awards in class action lawsuits and had made mistakes. (In other words, we’re not criminals, we’re just bad lawyers.) Defense lawyers attempted to pin the blame on famed Cincinnati plaintiffs lawyer Stan Chesley, whom they had hired as a consultant for counsel in splitting up the settlement. Chesley was not charged.

Last year's six-week criminal trial was chock full of odd twists and turns. There were tales of drunken lawyers, charitable funds created for the benefit of the fen-phen attorneys, a judge admitting on the stand to being embarrassed by his handling of the case, and allegations of juror stalking.

Topping off all the weirdness: Gallion and Cunningham are the former owners of the racehorse Curlin, a Breeder's Cup Winner and twice named Horse of the Year.

Full post as published by Law Blog - WSJ.com on April 03, 2009 (boomark / email).