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Fen-phen lawyers enter new pleas

COVINGTON — Two Lexington-area lawyers accused of taking millions of dollars from their former clients in a diet drug settlement pleaded not guilty Thursday to eight new charges of wire fraud.

Last week, a federal grand jury indicted William Gallion and Shirley Cunningham Jr. on charges of conspiracy and eight new charges of wire fraud. The men were charged in 2007 with one count each of conspiracy to commit wire fraud.

The two men were arraigned on the new charges Thursday morning in U.S. District Court.

Gallion signed paperwork for a $2.5 million bond.

He was released Thursday afternoon. Cunningham already had been released.

U.S. District Judge Danny Reeves set a new trial date for Nov. 17.

A mistrial was declared in their first trial, in July, after a jury could not decide whether Gallion and Cunningham were guilty of conspiracy to commit wire fraud.

Gallion, Cunningham and a third lawyer, Melbourne Mills Jr., were charged with one count each of conspiracy to commit wire fraud in 2007.

A jury acquitted Mills of all charges in July. Cunningham was released from the Boone County Jail on bond on Aug. 27.

The lawyers sued fen-phen maker American Home Products in Boone Circuit Court and settled the case for $200 million in 2001. Federal prosecutors say Gallion and Cunningham took $94 million — an increase of nearly $30 million from the previous indictment — that should have gone to 440 former clients, according to the indictment.

The indictment outlines a series of monetary transactions between Cunningham's and Gallion's bank accounts and accounts designated solely for client money.

If convicted, Gallion and Cunningham could face a maximum of 180 years in prison. However, it is rare for someone to get the maximum sentence.