COVINGTON, Ky. — A federal jury acquitted one attorney today of defrauding clients in a diet-drug settlement, but was sent back to deliberate on two others.
Jurors acquitted Melbourne Mills, 77, of conspiracy to commit wire fraud. The panel was given instructions to keep considering the case against attorneys William Gallion and Shirley Cunningham Jr., who face the same charge.
The three were accused of conspiring to defraud clients out of $65 million in a settlement involving the diet drug fen-phen. The case caught the attention of the horse industry because Gallion and Cunningham were the original owners of 2007 Horse of the Year Curlin. They have since sold an 80-percent share of the horse.
The verdict on Mills came in the sixth day of deliberations, just after jurors sent a note to the judge saying that they could not reach a unanimous verdict on all the defendants.
Mills’ attorney, Jim Shuffett, said he was pleased, but said he couldn’t pinpoint what part of his defense had swayed the jury.
“Whatever it was, it sure worked,” Shuffett said.
Mills still faces a civil lawsuit from 414 former clients in state court. Gallion and Cunningham are also defendants in that case. A state judge previously ordered the three men to pay $42 million to their former clients and said a trial will be held at a yet-to-be-set date to determine any punitive damages.
Shuffett said the verdict won’t likely directly impact the civil case but added, “It can’t hurt.”
Prosecutors said in closing arguments that the lawyers were motivated by greed when they took a $127 million payment to settle a 2001 lawsuit in which they should have been paid $60 million. Defense attorneys said the lawyers didn’t commit any crimes and any mistakes in the settlement were unintentional.
Much of the six-week trial focused on how the class-action settlement was handled.
Gallion testified for the defense, at one point telling jurors that he, Cunningham and Mills would have been justified in keeping $170 million of the money.
Also today, Curlin worked seven furlongs over the turf at Churchill Downs, a first step to a possible run in the Arc de Triomphe at Longchamp on Oct. 5, as the 4-year-old colt tries to master the turf the way he has the dirt.
Curlin, the winner of the 2007 Preakness and Breeders’ Cup Classic, is coming off an easy victory in the Stephen Foster Handicap on June 14 at Churchill — his first start since winning the Dubai World Cup in March. The horse is expected to race on the turf in either New York or Chicago on July 12.
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Associated Press Will Graves in Louisville, Ky. contributed to this report.
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