Disbarred Fen-Phen lawyers get long prison sentences

Chris Rizo Aug. 18, 2009, 12:10pm

Hon. Danny Reeves

FRANKFORT, Ky. (Legal Newsline)-Disgraced plaintiffs' attorneys William Gallion to 25 years in prison and Shirley Cunningham Jr. to 20 years for defrauding clients out of millions of dollars in the state's $200 million Fen-Phen settlement.

A jury earlier said that the two must forfeit $30 million they bilked from clients in Kentucky's $200 million Fen-Phen settlement.

The men were convicted April 3 of eight federal counts of wire fraud and one count of conspiracy to commit fraud for defrauding 440 clients in the diet-drug litigation that settled in 2001.

U.S. District Court Judge Danny Reeves on Monday ordered the men to pay more than $127 million in restitution and to forfeit another $30 million to the government. Reeves imposed sentences 10 years less than sought by prosecutors.

At trial, federal prosecutors alleged that the lawyers took a $127 million payment from their clients when they should have been paid just $60 million.

They attorneys contended that Kentucky's rules on class action lawsuits are ambiguous. They said they relied on Boone Circuit Judge James Bamberger, who presided over the original Fen-Phen class action suit, to set the legal fees they received.

The Fen-Phen settlement was reached with diet drug maker American Home Products, now known as Wyeth, in Boone Circuit Court in 2001.

The attorneys' former clients have already won a $42 million civil award against the lawyers who represented them in a case taking on the manufacturer of Fen-Phen, which has been linked to heart damage and pulmonary hypertension.

The case is U.S. v. Gallion, 07-CR-39, U.S. District Court, Eastern District of Kentucky.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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