WKYT | Lexington, Kentucky | News

Federal Appeals Court Rules 3 Attorneys Can Remain In Jail

By BRETT BARROUQUERE
Associated Press Writer

LOUISVILLE, Ky. (AP) - Three attorneys accused of bilking their clients out of millions of dollars from a diet drug settlement will remain in jail until they give the trial judge enough financial information to decide if they are flight risks, an appeals court ruled.

To have a chance at getting bail, William Gallion and Shirley Cunningham Jr., the original owners of Breeders' Cup Classic champion Curlin, and a third lawyer, Melbourne Mills Jr., must turn over financial information to U.S. District Judge William Bertelsman.

"The district court has properly ordered the defendants detained until he can determine if there are appropriate conditions of release," the 6th U.S. Circuit Court of Appeals wrote in an order issued Tuesday.

Bertelsman jailed the three lawyers in August after granting their request to delay their trial until January on charges they stole millions from clients. But Bertelsman told the lawyers they must turn over financial information to it could be determined if there were any hidden funds the men could use to flee.

Cunningham, Gallion and Mills, who are in the Boone County Jail in northern Kentucky, have refused to turn over the financial information, saying Bertelsman didn't have the authority to ask for it and that turning over the information could violate their rights against self-incrimination. Prosecutors argued that the men should have to turn over the information if they want bail.

The three-judge appeals panel said Bertelsman made the correct decision because the lawyers face up to 20 years in prison and their law licenses have been suspended. The judges said Cunningham, Gallion and Mills could gain their freedom by giving Bertelsman copies of statements showing their assets and cash flow from January 2001 through the present.

Along with the criminal case, the three attorneys also have been ordered in a civil case to repay their clients at least $42 million plus interest. The attorneys face an unscheduled trial in state court to decide if they must pay damages to more than 400 former clients.

A state judge ordered Cunningham's and Gallion's assets turned over to the 418 plaintiffs to satisfy the judgment.

Cunningham, 52, and Gallion, 56, bought Curlin for $57,000 as a yearling through their Midnight Cry Stable. They sold controlling interest in the horse in February for a reported $3.5 million to a group composed of Jess Jackson, founder of Kendall-Jackson wines; Satish Sanan's Padua Stables; and George Bolton, an investment banker.

Mills had no stake in Curlin.

Curlin was third in the Kentucky Derby and second in the Belmont Stakes.

(Copyright 2007 by The Associated Press. All Rights Reserved.)


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