Legal Ethics
Prosecutor Says Millions in Assets of Two Fen-Phen Lawyers Can’t Be Traced
Posted Jul 31, 2008, 12:01 pm CST
By Debra Cassens Weiss
Millions in dollars of assets held by two lawyers accused of defrauding their fen-phen clients cannot be traced, according to a motion opposing their release from jail as they await retrial.
A motion (PDF) by U.S. Attorney Laura Voorhees says it’s unclear what assets are available to lawyers William Gallion and Shirley Cunningham Jr. that could be used to help them flee the court’s jurisdiction, the Kentucky Herald-Leader reports. Voorhees says the lawyers have “stonewalled” efforts to locate their assets in a civil case filed by the lawyers’ former fen-phen clients.
Jurors deadlocked in the the trial of Gallion and Cunningham earlier this month. A third lawyer, Melbourne Mills Jr., was acquitted. The three men had been accused of defrauding their fen-phen clients out of $65 million.
Gallion has argued that he has little money for bond because his assets have been secured in the civil suit. But Voorhees attached an affidavit from a lawyer representing the former clients that said she has been able to locate and seize only about $2 million in assets to satisfy a $42 million judgment. The lawyer, Angela Ford, said she believes much of the defendants’ money is sheltered in at least 10 limited liability companies or family foundations, including Midnight Cry Stables. The lawyers own a minority share of the racehorse Curlin through the stables.
“To date, the defendants have resisted the civil plaintiffs' execution efforts by placing assets in limited liability companies, refusing to respond to discovery, declining to respond to garnishments, causing limited liability company registered agents or key officers to leave the jurisdiction, and disobeying the orders of the Boone Circuit Court to provide discovery documents,” Ford said in the affidavit.
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Posted by Ralph Handy - 3 months, 3 weeks, 1 day, 15 hours, 50 minutes ago
If the owner of a corporation is found guilty of willful negilence the corporate shield can be penetrated. Is this not also true in the event of criminal acts and LLCs.?