Ex-lawyer gets 20 years for charges including $4M client theft in case linked to fen-phen settlement
Former Kentucky lawyer Seth Johnston, 35, was sentenced Monday to a 20-year federal prison term in a multi-faceted criminal case. Certain charges were linked to a $200 million settlement in litigation over a diet drug combination blamed for causing heart problems, which his lawyer once compared to “the curse of the Hope diamond,” according to a Louisville Courier-Journal article published at the time of his indictment.
The Lexington Herald-Leader and an FBI press release provide details about the sentencing.
At issue in Johnston’s case, which also involved other criminal conduct on his part, is a theft from a $42 million judgment won by attorney Angela Ford on behalf of 440 clients of now-former lawyers Shirley Cunningham Jr., William Gallion and Melbourne Mills Jr.
The three lawyers Cunningham, Gallion and Mills arranged the $200 million fen-phen settlement in 2001, but then took tens of millions more than the $60 million in attorney’s fees they had agreed to in a contract. That breach led to the $42 million judgment won by Ford.
Only about $14,000 of the $4 million that Johnston stole from clients came from that $42 million settlement. But he also diverted “a significant amount” for his own personal use from Ford herself, who retained Johnston’s law firm to collect the $42 million settlement. Ford asked Johnston himself to deposit $3.5 million of her funds into corporate accounts, the articles say.
Meanwhile, Johnston also took over $1 million from the heirs of an estate; participated in a drug conspiracy in which he paid $100,000 to purchase synthetic marijuana; urged witnesses in a criminal fraud case against him to lie to a grand jury; and reported only a fraction of his income to the Internal Revenue Service in 2011, an FBI press release states.
He pleaded guilty in 2013 to mail fraud, wire fraud, conspiracy to obstruct justice, conspiracy to distribute a synthetic marijuana and tax fraud.
Johnston was disbarred by consent last month. Justia provides a copy of the Kentucky Supreme Court’s order (PDF).
See also:
ABAJournal.com: “Judge says ex-attorney must help pay $42M judgment to plaintiffs in fen-phen litigation”
