A federal appeals court has affirmed the convictions of lawyers William Gallion and Shirley Cunningham Jr. for running a “massive scheme to defraud their clients” in a major Kentucky fen-phen case. The two prominent plaintiff's lawyers were convicted of wire fraud for stealing the bulk of a 2001 settlement from 440 clients, who ended up receiving only about 37% of the $200 million that the manufacturer of fen-phen, American Home Products, agreed to pay for their injuries. The once popular diet drug was shown to cause heart valve damage and was the subject of many lawsuits following its having been pulled from the market.
The 6th Circuit Court of Appeals held while there were minor flaws in their 2009 trial, all were harmless given the extent of their crimes. The attorneys were convicted of scamming clients by taking nearly two-thirds of a $200 million settlement.
The Court refused to believe that the two attorneys were simply in over their heads, deciding instead that they had actively lied to clients and the court, engaged in destruction of documents and shifted money between a multitude of accounts all to avoid detection.
The panel affirmed an order that required the two lawyers pay $127.6 million to their victims as restitution.
One of the defendant’s lawyer claimed that while he’s disappointed with the ultimate ruling he’s not done fighting for his client. He said he would now be asking the full court to reconsider the ruling and if that fails, ask that the US Supreme Court hear the case.
Kerry Harvey, the U.S. attorney for the Eastern District of Kentucky, who was responsible for prosecuting the two said the ruling was gratifying because “it brings us one step closer to securing justice for the many victims.” Harvey said the government had been collecting assets but was legally not permitted to distribute them while the case was on appeal. Angela Ford, an attorney representing most of the victims of Gallion’s and Cunningham’s fraud, said, “It has been a long fight, and this is a tremendous milestone.”
Gallion, 61, who is serving 25 years at a federal prison camp in Oakdale, La., is not eligible for release until Dec. 8, 2029, while Cunningham, 57, who is serving 20 years at a camp in Yazoo, Miss., has a release date of Aug. 15, 2025.