Chesley Hits Lack of Trust Accounts in Trial of Fen-Phen Lawyers
Well-known Cincinnati plaintiffs lawyer Stan Chesley criticized three fen-phen lawyers in trial testimony today for failing to set up escrow accounts to hold settlement money.
Chesley testified under a grant of immunity from prosecution in the trial of three lawyers accused of diverting $65 million in settlement money from their clients, the Louisville Courier-Journal reports. The lawyer who has been dubbed the “prince of torts” was hired by the defendants to help negotiate the fen-phen settlement, the Cincinnati Enquirer reports.
Chesley testified the three defendants had the right to withhold money from the clients to cover additional claims, but the money should have been held in an escrow account and distributed to clients after no additional claims were filed, according to the Courier-Journal. He also denied ever suggesting that the attorneys should put $20 million in a charitable trust, contradicting earlier testimony by defendant William Gallion. Chesley did say he thought placing a much smaller amount in such a trust would have been appropriate.
Gallion is charged with conspiracy to commit fraud along with lawyers Shirley Cunningham Jr. and Melbourne Mills Jr.
Chesley testified he didn’t know anything about the alleged fraud and he has no recollection of attending a court hearing in which the lawyers’ fees were set at about 49 percent, the Enquirer story says. Chesley testified his contract with the lawyers called for him to receive 27 percent of the settlement, but the amount was reduced to 21 percent when he wasn’t able to reach a deal within a year.