Kentucky Supreme Court PERMANENTLY Disbars Fen Phen Lawyers, William Gallion and Shirley Cunningham Jr. .
This is from the C-J: Lexington lawyers William Gallion and Shirley Cunningham Jr., who are charged with bilking clients out of tens of millions of dollars in Kentucky's fen-phen case, were permanently disbarred from practice today by the Kentucky Supreme Court.
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In a statement, Linda Gosnell, the Kentucky Bar Association's chief counsel, said the court confirmed "multiple violations of the rules of professional conduct that govern the practice of law."
"Never again will these two persons have the privilege of practicing law in the Commonwealth of Kentucky," Gosnell said.
The two men, who were temporarily suspended in August 2006, were accused of 22 violations of ethics rules, including receiving an excessive fee. They admitted eight violations, but not that one.
The bar association's board of governors had recommended their disbarment.
Gallion and Cunningham and a third lawyer, Melbourne Mills Jr., were tried earlier this year on a charge of conspiracy to commit wire fraud by taking nearly two-thirds of the $200million diet-drug settlement in Kentucky for themselves and others.
The jury acquitted Mills but was unable to reach a verdict in the case against Gallion and Cunningham, who will be retried Feb. 2.
Gosnell said in her statement that Mills' case is proceeding to a hearing before a trial commission. No other details were available.
In an eight-page opinion, the Supreme Court today rejected Gallion and Cunningham's main defense in the fen-phen case — that they had to hold on to $70million from the settlement in the event of "contingent liabilities."
"There were no contingent liabilities," the court said.
Gallion and Cunningham couldn't be reached for comment. Cunningham's defense lawyer, Steve Dobson, said he didn't represent him in the bar proceedings and couldn't comment, and Gallion's lawyer, O. Hale Almand, couldn't be reached for comment.
Assistant U.S. Attorney Laura Voorhees, who is prosecuting the pair, said her office would study whether the defendants' admissions in the disbarment order can be used in the criminal trial.
Louisville attorney Scott C. Cox, who frequently appears in federal court, said he believes that if Gallion or Cunningham made incriminating admissions in the bar case, they could be admissible in their retrial, either as direct evidence or to impeach them if they testify.
Gallion and Cunningham asked the Supreme Court to accept their resignations under terms of permanent disbarment — a step that keeps them from having to defend themselves in a disciplinary proceeding.
The Supreme Court found that:
The 440 fen-phen plaintiffs were never told the total settlement amount paid by the diet-drug maker, nor were they informed that it was their lawyers — and not the company — that determined the amount of money each was to be given.
Any plaintiff who complained about the settlement amount was coerced by the attorneys or their staff to take the amount offered under the guise that it was what the drug manufacturer, now known as Wyeth, specifically offered.
Plaintiffs were told they could go to jail if they discussed the terms of their individual settlement.
The plaintiffs were never told that Gallion, Cunningham and Mills entered into an agreement with Cincinnati attorney Stan Chesley and other lawyers to share fees from the case.
Gallion and Cunningham admitted in their motion to accept disbarment that they violated several rules, including by failing to tell their clients that they were taking more than the fees set out in their contracts.
The lawyers also admitted that they never told their clients that they were putting $20million from the settlement into a charitable foundation, or that they paid themselves to manage the foundation.
But they didn't admit that they took excessive fees.
The fen-phen clients have already won a civil judgment against Gallion, Cunningham, Mills and Chesley for $42million; it has been appealed.
The assets of Gallion and Cunningham have been turned over to a receiver, who has ordered the auction of their most valuable property — their 20 percent stake in Curlin, the reigning Horse of the Year and North America's first $10million earner.
The deadline for filing a sealed bid is Nov. 5.
Reporter Andrew Wolfson can be reached at (502) 582-7189.
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In a statement, Linda Gosnell, the Kentucky Bar Association's chief counsel, said the court confirmed "multiple violations of the rules of professional conduct that govern the practice of law."
"Never again will these two persons have the privilege of practicing law in the Commonwealth of Kentucky," Gosnell said.
The two men, who were temporarily suspended in August 2006, were accused of 22 violations of ethics rules, including receiving an excessive fee. They admitted eight violations, but not that one.
The bar association's board of governors had recommended their disbarment.
Gallion and Cunningham and a third lawyer, Melbourne Mills Jr., were tried earlier this year on a charge of conspiracy to commit wire fraud by taking nearly two-thirds of the $200million diet-drug settlement in Kentucky for themselves and others.
The jury acquitted Mills but was unable to reach a verdict in the case against Gallion and Cunningham, who will be retried Feb. 2.
Gosnell said in her statement that Mills' case is proceeding to a hearing before a trial commission. No other details were available.
In an eight-page opinion, the Supreme Court today rejected Gallion and Cunningham's main defense in the fen-phen case — that they had to hold on to $70million from the settlement in the event of "contingent liabilities."
"There were no contingent liabilities," the court said.
Gallion and Cunningham couldn't be reached for comment. Cunningham's defense lawyer, Steve Dobson, said he didn't represent him in the bar proceedings and couldn't comment, and Gallion's lawyer, O. Hale Almand, couldn't be reached for comment.
Assistant U.S. Attorney Laura Voorhees, who is prosecuting the pair, said her office would study whether the defendants' admissions in the disbarment order can be used in the criminal trial.
Louisville attorney Scott C. Cox, who frequently appears in federal court, said he believes that if Gallion or Cunningham made incriminating admissions in the bar case, they could be admissible in their retrial, either as direct evidence or to impeach them if they testify.
Gallion and Cunningham asked the Supreme Court to accept their resignations under terms of permanent disbarment — a step that keeps them from having to defend themselves in a disciplinary proceeding.
The Supreme Court found that:
The 440 fen-phen plaintiffs were never told the total settlement amount paid by the diet-drug maker, nor were they informed that it was their lawyers — and not the company — that determined the amount of money each was to be given.
Any plaintiff who complained about the settlement amount was coerced by the attorneys or their staff to take the amount offered under the guise that it was what the drug manufacturer, now known as Wyeth, specifically offered.
Plaintiffs were told they could go to jail if they discussed the terms of their individual settlement.
The plaintiffs were never told that Gallion, Cunningham and Mills entered into an agreement with Cincinnati attorney Stan Chesley and other lawyers to share fees from the case.
Gallion and Cunningham admitted in their motion to accept disbarment that they violated several rules, including by failing to tell their clients that they were taking more than the fees set out in their contracts.
The lawyers also admitted that they never told their clients that they were putting $20million from the settlement into a charitable foundation, or that they paid themselves to manage the foundation.
But they didn't admit that they took excessive fees.
The fen-phen clients have already won a civil judgment against Gallion, Cunningham, Mills and Chesley for $42million; it has been appealed.
The assets of Gallion and Cunningham have been turned over to a receiver, who has ordered the auction of their most valuable property — their 20 percent stake in Curlin, the reigning Horse of the Year and North America's first $10million earner.
The deadline for filing a sealed bid is Nov. 5.
Reporter Andrew Wolfson can be reached at (502) 582-7189.
Labels: Crime, Punishment
posted by KYJurisDoctor at 9:28 AM
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