04/07/2009 11:00PM

Gallion, Cunningham ordered to return $50M


A jury that last week convicted two disbarred Lexington lawyers and horse owners of eight counts of conspiracy and wire fraud ruled on Tuesday that the former lawyers should forfeit $30 million, according to reports.

The jury also said that William Gallion and Shirley Cunningham Jr. should turn over $20 million from a non-profit corporation the two set up after winning a $200 million settlement with the manufacturer of the diet-drug combination fen-phen on behalf of 440 clients in 2001.

The criminal verdict is the second against the two lawyers, who were accused of misappropriating the money from the settlement. Last year, a civil-court ruled that Gallion, Cunningham, and a third lawyer, Melbourne Mills Jr., should repay the clients $42 million, but the former clients have been unable to collect the bulk of that judgment while criminal charges were still pending.

Gallion and Cunningham own 20 percent of Curlin, the 2007 and 2008 Horse of the Year who now stands at Lane's End Farm outside of Lexington. They also own Einstein, the winner of the 2009 Santa Anita Handicap. Einstein's earnings from the Big Cap have not been distributed because of a lien placed by attorneys representing the former clients.

Gallion and Cunningham face 20 years each on each count of their convictions, though the actual sentence will likely be far lighter. Sentencing has been scheduled for July 27. Mills was acquitted in the criminal case last year.

According to the Lexington Herald-Leader, attorneys for Gallion and Cunningham have said that they will likely appeal the criminal charges.