William Gallion admitted Friday that he never told a judge in a controversial $200 million fen-phen settlement that he had contracts with his clients that would limit his fees to roughly 30 percent of the settlement.
Gallion told a jury in federal court in Covington that he did not think that he had to tell then Boone Circuit Court Judge Joseph "Jay" Bamberger that he had contracts with his clients because it is impossible in the state of Kentucky to represent clients without a written contract. Bamberger, as a judge and an attorney, would have known that, Gallion said.
Gallion, Shirley Cunningham Jr. and Melbourne Mills Jr. are accused of taking approximately $65 million of a 2001 Boone Circuit Court fen-phen settlement. The three have been charged with one count each of conspiracy to commit wire fraud. If convicted, the three could receive a maximum of 20 years in prison. Because the federal sentencing guidelines are no longer mandatory, it is unlikely that they would receive the maximum sentence.
Bamberger had testified earlier in the trial -- now in its fourth week -- that he didn't know that the attorneys had contracts with their clients and would not have approved the attorney fees of roughly 50 percent if he had known that the contingency fee contracts for the lawyers were roughly 30 percent of the total settlement. Instead, the lawyers on the case received the bulk of the $200 million settlement; the 440 clients received $74 million.
"I did not ever say to Judge Bamberger, 'I have written contracts with my clients,'" Gallion said.