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Curlin Former Owners Convicted on Fraud Charges

Remember that mistrial last year in which a jury could not decide whether two lawyers who once owned Curlin were guilty of committing fraud against their clients in the fen=phen diet drug case? Their retrial ended yesterday when a jury convicted William Gallion and Shirley Cunningham Jr. of defrauding their clients out of hundreds of millions of dollars.

This time, there was a new judge, in a new venue, a new prosecutor and, most controversial, new evidence. Judge Danny Reeves (a good judge and good guy and former law partner of mine) allowed prosecutors to put the counsel for the Bar Association on the witness stand to testify at length about her investigation into the two lawyers and the circumstance of the pne-phen settlement and the handling of funds by them. In addition, he allowed into the evidence that the defendants had been disbarred by the Kentucky Supreme Court for violating ethical rules relating to a lawyer's relationship with his or her client. While I believe Judge Reeves to have made the correct decision here, it does leave the defendants grounds for an appeal, which the defendants' attorneys immediately promised would be filed.

Following the announcement of the verdict, Judge Reeves ordered the defendants be taken into custody because they were flight risks. Sentencing will be announced on July 27. The jury returns on Tuesday to decide if the defendants should be required to forfeit $94 million.

Full post as published by Sports Biz on April 04, 2009 (boomark / email).