10/28/2007 11:00PM

Curlin's co-owners still jailed

EmailAs Curlin added the $5 million Breeders' Cup Classic on Saturday to his campaign for Horse of the Year, two of the colt's owners were sitting in jail in Boone County, Ky.

Shirley Cunningham Jr. and William Gallion - two Lexington, Ky., lawyers who purchased Curlin as a yearling for $57,000 and later sold 80 percent of the horse for $3.5 million - have been in jail since September, when a judge ruled that the men should be incarcerated until they could provide detailed records to the court about their earnings and expenditures from 1999 to now.

Attorneys for Gallion and Cunningham have appealed the order to incarcerate, and the next pretrial hearing in the case is scheduled for Nov. 20. Since Judge William Bertelsman of the U.S. Sixth Circuit Court of Appeals ordered the men jailed - along with a third Lexington lawyer, Melbourne Mills Jr. - attorneys for the lawyers have filed a number of objections to the prosecution's case, and those objections will likely be aired at the Nov. 20 hearing.

The case has been a leading topic of discussion in Lexington, where the three practiced law before having their licenses suspended by the Kentucky Bar Association in 2006 following an investigation into a diet-drug case, which resulted in a $200 million settlement for 440 plaintiffs who claimed that they suffered health problems after taking fen-phen. The suit was settled in 2001.

The lawyers were indicted in June on charges of misappropriating $65 million of the settlement. A separate civil case against the three lawyers filed by the plaintiffs in the case has been postponed until the criminal trial is resolved.

The attorney for Gallion and Cunningham did not return a phone call on Monday. Jim Shuffett, the attorney for Mills, said that his client is attempting to comply with the judge's order for incarceration by gathering the financial records. Shuffett said that Mills will not appeal the judge's order unless the task of gathering all the records cannot be fulfilled.

"It's a lot of records, a lot of information," Shuffett said.

Attorneys for all three of the lawyers have filed a motion to dismiss the case because of objections to the prosecution's use of an informant who was one of Mills's assistants. According to the attorneys, the assistant took notes during meetings between the indicted lawyers and their attorneys. The attorneys contend that the meetings should have been subject to attorney-client privilege.

The prosecution has argued that they did not use evidence gathered from those meetings in their case. Judge Bertelsman has said that he will allow both sides to present their arguments on the objection at the Nov. 20 hearing.

The scheduled date for the criminal trial is Jan. 7. Attorneys for Cunningham and Gallion have asked the judge to move the case from Covington, Ky., to Ashland, Ky., because of pre-trial publicity.