By Brett Barrouquere
The Associated Press
New York Lawyer
October 30, 2007
LOUISVILLE, Ky. -- A $1 million endowed chair at Florida A&M Law
school could become central to the trial of three Kentucky lawyers
on wire fraud charges that they bilked clients out of millions in a
settlement over the diet drug fen-phen.
Federal prosecutors said they may use evidence that attorney
Shirley Cunningham Jr., a co-owner of Breeders' Cup Classic winner
Curlin, used money taken from clients to endow the chair, which is
the subject of a separate investigation.
Cunningham, William Gallion and Melbourne Mills Jr. are currently
in jail awaiting trial on charges of conspiring to commit wire
fraud. A state court judge has ruled that the three men owe more
than 440 clients at least $42 million.
The motions concerning Florida A&M were among a flurry of filings
as the case moves toward a trial scheduled for January.
Assistant U.S. Attorney Laura Voorhees said in one motion that
evidence would show the $1 million gift came from fen-phen funds
from clients.
"Therefore, it is relevant evidence of the execution of the
fraud," Voorhees wrote.
Voorhees hasn't said definitively if the Florida A&M allegations
will be raised at trial, only noting in a motion that she would like
the option of doing so.
Cunningham's lawyer, Steven Dobson, is seeking to keep references
to Florida A&M out of the fen-phen trial.
"The federal investigation of Shirley A. Cunningham Jr., is not
applicable to the case at bar because no charges were ever filed,"
Dobson wrote in a motion.
Cunningham gave the money to Florida A&M in January 2002 with the
condition that the school grant him the position at a
$100,000-a-year salary. The school fired Cunningham in 2005 after
interim FAMU president Castell Bryant said there was no evidence
Cunningham had done any work at the law school.
Federal prosecutors investigated Cunningham, but have not filed
charges. The Florida Attorney General's Office said it is reviewing
the arrangement.
Cunningham and Gallion bought Curlin for $57,000. They sold
controlling interest of the colt 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.
Other issues pending before U.S. District Judge William
Bertelsman in the case are whether prosecutors violated the three
men's attorney-client privilege when a legal assistant to one of
them recorded conversations and whether references to civil
litigation and actions by the Kentucky Bar Association against the
attorneys can be brought up at trial.
Bertelsman has a pretrial hearing set for December, but has not
ruled on any of the issues.