09/12/2008 12:00AM

Trial date set for fen-phen pair


A U.S. District Court judge in Covington, Ky., on Thursday set Nov. 17 as the new trial date for two Lexington lawyers and horse owners accused of defrauding their clients out of tens of millions of dollars in a 2002 diet-drug settlement.

The two lawyers, William Gallion and Shirley Cunningham Jr., pleaded not guilty to one charge of conspiracy and eight charges of wire fraud at an arraignment on Thursday. Through Midnight Cry Stables, Gallion and Cunningham own 20 percent of 2007 Horse of the Year Curlin, though that stake has been put in receivership as a result of a separate civil-court judgment against the two.

Following the arraignment, Gallion posted a $2.5 million bond and was released from jail. Cunningham was released on Aug. 27 after posting a similar bond.

Gallion, Cunningham, and a third lawyer, Melbourne Mills Jr., were tried earlier this year on one count each of conspiracy to commit wire fraud. Mills was found not guilty by the jury, but the case against the other two was declared a mistrial after the jury could not agree on a verdict.

The lawyers are accused of defrauding more than 200 clients out of $94 million as part of a $200 million settlement with the manufacturer of the diet-drug combination fen-phen.