The New York Times reports today that three Lexington, Kentucky  lawyers have been indicted for keeping $65 million that should have been distributed to their clients for the settlement of their Fen-Phen claims.  William J. Gallion, Shirley A. Cunningham Jr. and Melbourne Mills Jr. were entitled to one-third of the $200 million settlement on behalf of approximately 440 clients, but kept two-thirds.  The indictment alleging wire fraud was issued by a federal grand jury meeting in Covington, Kentucky.  All three had their law licenses temporarily suspended last August by the Supreme Court of Kentucky.

    An interesting aside to this development is that Messrs. Gallion and Cunningham own a 20% stake in Curlin, who won the Preakness and finished third in the Kentucky Derby and second in the Belmont.  They bought Curlin in 2005 for $57,000, then sold 80% of their interest in February for $3.5 million.  There will likely be litigation regarding Curlin’s ownership, as the lawyer representing most of the plaintiffs whom Gallion and Cunningham are accused of defrauding alleges that they bought the horse with the money they withheld from her clients.  If true, she says the plaintiffs, and not Gallion and Cunningham, own the horse, and the sale of  the 80% interest is void.  The (Louisville) Courier-Journal also wrote about the dispute last month.