Newspaper article Evansville Courier & Press (2007-Current)

Attorneys to Repay Former Clients Appeals Court Upholds Verdict in Fen-Phen Case

Newspaper article Evansville Courier & Press (2007-Current)

Attorneys to Repay Former Clients Appeals Court Upholds Verdict in Fen-Phen Case

Article excerpt

LOUISVILLE, Ky. - Two former Kentucky attorneys were properly convicted of scamming their clients out of $94.6 million from a $200 million settlement over the diet drug fen-phen in a case in which "evidence of the defendant's guilt was so overwhelming," a federal appeals court ruled Tuesday. The U.S. 6th Circuit Court of Appeals also ruled that 61-year-old William Gallion and 57-year- old Shirley Cunningham Jr. were properly ordered to repay their former clients $127,678,834 in restitution - the amount the clients were entitled to under the settlement without any reduction for fees the attorneys were due.

Gallion and Cunningham, the original owners of 2007 and 2008 Horse of the Year Curlin, were convicted in 2009 of scamming more than 400 clients out of millions they had won against American Home Products, which renamed itself Wyeth and is now a subsidiary of Pfizer. Fen-phen was pulled from the market in 1997 after users had heart problems related to the drug. Prosecutors say they illegally kept the bulk of the settlement, but made more money available to their clients after the federal government began a criminal investigation.

Judge Ronald Lee Gilman wrote for the three-member panel that the two now-disbarred attorneys agreed to take $22 million each in attorney's fees, but "concocted a fraudulent scheme" to take twice as much from their clients.

"The scheme did not work out as planned," wrote Gilman, who aggressively questioned prosecutors during oral arguments in January.

The lawyers sued the drugmaker in 2001. The men, along with now- disbarred Lexington attorney Melbourne Mills Jr., brought class- action guru Stanley Chesley of Cincinnati into the case. They also created a charity, the Kentucky Fund for Healthy Living, with money from the settlement and named themselves and former state judge Joseph Bamberger as directors.

From the settlement, Cunningham received $21 million, Gallion nearly $31 million, Mills, almost $24 million, Chesley more than $20 million, the Kentucky Fund for Healthy Living received $20 million and several other lawyers divided up $10. …

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