FRANKFORT — It's been more than a month since a jury sent two well-known lawyers to jail for pocketing millions of dollars that should have gone to their former clients who said the diet-drug fen-phen made them ill, but the legal saga continues.
Although many thought the April jury verdict and monetary judgment against Shirley Cunningham Jr. and William Gallion finally closed the much-publicized criminal case, prosecutors and defense lawyers are still arguing about what the jury actually decided and how much money the two men have to repay.
Federal prosecutors say the April 7 jury verdict form — a legal document in which the jury reports its decision — is clear: The two men should have to pay $30 million in restitution in addition to turning over about $20 million in a nonprofit that was funded with proceeds from the $200 million fen-phen settlement.
But defense lawyers for the two men argue in court documents that the indictment and the jury instructions say the $20 million in the nonprofit was intended to count toward the $30 million monetary judgment.
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It will ultimately be up to U.S. District Judge Danny Reeves to make a decision in the matter, said David Davidson, an attorney for Cunningham.
If Reeves sides with the defense, the two men collectively will have to pay $10 million out of their own pocket. If Reeves says prosecutors are right, the two men are on the hook for $30 million.
Gallion and Cunningham were convicted of taking millions of dollars that should have gone to their former clients who they represented in a 2001 Boone Circuit Court case. The total settlement was for $200 million, but lawyers on the case took the bulk of the settlement. The lawyers also put more than $20 million in a nonprofit called the Kentucky Fund for Healthy Living using proceeds from the settlement. Lawyers on the case later became paid board members of the nonprofit.
O. Hale Almand, an attorney for Gallion, argued in a May 1 motion that the jury instructions and the indictment that charges the two men say the money in the nonprofit was included in the total monetary judgment.
"Defendant Gallion's primary position, succinctly stated, is that the language of the indictment coupled with the jury instruction makes it absolutely clear that funds that were on deposit in the 'Kentucky Fund for Healthy Living' accounts are included in and not in addition to the general monetary judgment requested by the government," Almand wrote in court documents.
Almand was not available for comment.
But prosecutors counter that the jury verdict form does not say that the money in the nonprofit should be counted toward the total. The form asked the jury three questions. The first question is whether the jury agreed with the prosecution's argument that the two men should have to repay $94 million. The jury said no. The form then says that if the jury answered no, it should come up with its own monetary judgment. The jury said the two men should have to repay $30 million.
The form also asked whether the two men should have to forfeit money in the Kentucky Fund for Healthy Living. The jury verdict form does not say that the fund should be included in the total amount of money the two men should have to repay, Assistant U.S. Attorney Wade Napier argued in court documents.
Defense lawyers have said that if the government wanted to be clear that the money in the nonprofit was in addition to the monetary judgment, it should have been more explicit in its jury instructions.
Lawyers for the two men have asked that the government delay collection of assets in the case until the questions about how much the two men owe can be resolved.
Gallion and Cunnigham, who are scheduled to be sentenced on July 27, have been in the Franklin County jail since the April verdict. They could face decades in prison.
Both have said they plan to appeal.