Melbourne Mills’s defense that he was too drunk to know what was going on when he and two other attorneys stole tens of millions of dollars appears to have created reasonable doubt in the mind of a Kentucky jury.  Mills may have been helped by the revelation that his two co-counsel tried to hide $50 million from him, too, permitting his attorney to more plausibly blame the scheme on others.   Or the jury may have believed the argument of Mills’s attorney that the three attorneys were too stupid to understand the settlement agreement and didn’t intend to steal any money (though they transferred a lot of money from their personal account to their clients when they learned the bar was investigating, and lied to the bar about how much money their clients received).  (Jim Hannah, “One cleared in diet drug case”, Cincinnati Enquirer, Jul. 2; Beth Musgrave, “Fen-phen lawyer Mills is found not guilty”, Lexington Herald-Leader, Jul. 2; Beth Musgrave, “Jury hears closing arguments in fen-phen trial”, Lexington Herald-Leader, Jun. 24; AP/Kentucky Post, Jun. 23).  The jury, today in its seventh day of deliberations, claims a deadlock on the other two attorneys, no doubt confused by why Judge Jay Bamberger and co-counsel and Democratic bigwig Stanley Chesley have not also been indicted. Defendants Cunningham and Gallion have sought to blame the tens of millions they stole on the fact that Bamberger (who was indirectly paid millions) judicially approved the settlement and Chesley (who was directly paid tens of millions) was allegedly the architect of the settlement that ensured lawyers would get far more than their contracts with their clients provided. Since there is no dispute that those two were indeed intimately involved in the scheme, the jury isn’t the only one confused why the Kentucky fen-phen three are being treated differently than the judge, the judge’s former law partner, and Stan Chesley, who all profited mightily.

We hadn’t previously mentioned the testimony of American Home Products defense attorney Jack Vardaman that Stan Chesley tried to induce him to provide false testimony in the civil case, something else Chesley has suffered no consequences for.  (Jim Warren, “Witnesses detail fen-phen settlement”, Lexington Herald-Leader, June).  And we missed this fascinating negative pregnant exchange in Chesley’s cross-examination:

Gallion’s attorney, O. Hale Almand, asked Chesley if he believed he broke any law or rule of ethics.

Chesley said, “I certainly don’t know of any criminal law of the United States that I violated or that I’m guilty of.”

Nice dodge of the question about legal ethics, though the press doesn’t indicate if there was a follow-up question.  (Brett Barrouquere, AP/Lexington Herald-Leader, Jun. 18).  Chesley was given immunity to testify and promptly told the jury that it was appropriate for the defendants to withhold money from their clients in case new claimants came forward.  He also apparently lied in claiming not to be present at a settlement conference before Judge Bamberger where the fees were discussed.

And welcome readers of the Lexington Herald-Leader, which says, “Legal blogs and Web sites such as www.overlawyered.com have used the case to attack the legal profession as a whole.”  (Brandon Ortiz and Art Jester, “Jury still out on legal profession”, Jul.2). Of course, the Kentucky bar has done a perfectly good job of demonstrating itself worthy of attack for simply suspending attorneys that stole tens of millions of dollars from clients.  And Stan Chesley has faced no disciplinary consequences, much less criminal ones, for his role in the fraud, demonstrating the failure of legal disciplinary authorities to address the systematic problem of fraud in the plaintiffs’ bar.  When crime pays, one is justified in noting the problem of criminal behavior.

Filed under: ethics, feeing frenzy, Kentucky fen-phen settlement fraud, legal discipline, Melbourne Mills Jr., scandals, Stan Chesley