06/20/2007 11:00PM

Curlin owners plead not guilty


William J. Gallion and Shirley Cunningham, the two suspended lawyers who own 20 percent of Preakness winner Curlin, pleaded not guilty on Thursday in U.S. District Court in Covington, Ky., to charges that they defrauded 440 plaintiffs in a settlement of a civil lawsuit against the manufacturer of the diet drug combination known as fen-phen, according to the Associated Press.

The two lawyers, along with a third, Melbourne Mills Jr., were indicted last week by a federal grand jury on a charge each of conspiracy to commit wire fraud. The indictment charged that the lawyers defrauded the plaintiffs in the suit of $65 million. The suit was settled in 2001 for $200 million.

According to the Associated Press, U.S. District Court Judge William O. Bertelsman ordered all three lawyers to surrender their passports and promise not to travel outside of Kentucky until the trial begins.

Last summer, all three were suspended from practice by a Kentucky judge after the state bar association initiated an investigation into how the settlement funds were disbursed. The three lawyers are also being sued in civil court by the plaintiffs.

The trial date was set for Oct. 15.

Gallion and Cunningham purchased Curlin at the 2005 Keeneland September yearling sale for $57,000. This year, the pair sold an 80 percent interest in the horse for a reported $3.5 million.