William Gallion and Shirley Cunningham Jr., the suspended lawyers and 20% owners of Preakness Stakes (gr. I) winner Curlin, along with suspended attorney Melbourne Mills Jr. pleaded not guilty June 21 in U.S. District Court to charges of conspiracy to commit wire fraud against more than 400 plaintiffs in a lawsuit over the diet drug fen-phen.
In a previous civil case before Boone County Circuit Court senior judge William Wehr, the lawyers were found to have breached fiduciary responsibility in the $200-million fen-phen settlement. They could be sentenced to up to 20 years in prison if convicted on the wire fraud charges.
U.S. District Judge William Bertelsman entered not guilty pleas on the men’s behalf and ordered them to surrender their passports and not travel outside their home states before their trial, which was set for Oct. 15, the Associated Press reported. The defendants attended the arraignment but declined to comment on the charges.
Prosecutors have said they’ve obtained more than 85 boxes of evidence during a search in the investigation.
“I understand there are a lot of records,” said Hale Almand, who represents Gallion. “It’ll take a little time to figure it out.”
The case has captured the attention of the racing industry due to a possible seizure of the lawyers’ other assets, which doesn’t appear to exclude their interest in Curlin, runner-up to Rags to Ritches in his last start, the June 9 Belmont Stakes (gr. I). Gallion and Cunningham purchased the 3-year-old son of Smart Strike at Keeneland’s 2005 September yearling sale for $57,000 and resold 80% of him following his maiden win to a group of investors--Jess Jackson’s Stonestreet Stables, Satish Sanan’s Padua Stables, and George Bolton--for a reported $3.5 million.
According to an indictment from a U.S. District Court in Eastern Kentucky, the attorneys will be required to forfeit six bank accounts to the United States in addition to their relinquishment of $46 million. Also according to the indictment, “It is the intent of the United States to seek the forfeiture of any other property in which the defendants have an interest in, up to the value of the currency” should the attorneys fail to comply with the order.
During the June 21 meeting, Bertelsman read a list of assets that could be forfeited but made no direct mention of Curlin, according to the Associated Press. The assets consisted of a list of checking accounts and certificates of deposits, but it was unclear if those accounts include Curlin’s winnings.