A lawyer fresh out of law school in 2001 testified Wednesday that he received a $3 million bonus – and a new car – for working on a $200 million settlement for people sickened by the diet drug fen-phen.
The testimony came from David Helmers, the first witness in the trial of Lexington lawyers Shirley Cunningham Jr., William Gallion and Melbourne Mills. Each is facing up to 20 years in prison, plus millions of dollars in restitution if found guilty of conspiracy to commit wire fraud.
The defendants were entitled to about $60 million in fees from the settlement, according to federal prosecutors.
But authorities said the three kept an additional $45 million, and another $20 million that they placed in a charitable trust from which each was paid $5,000 a month to manage.
Helmers, 39, said Gallion also got a new car from the settlement money. It was a Porsche.
Gallion’s attorney, O. Hale Almand of Macon, Ga., has called Helmers “the principal architect” of diverting extra money from the settlement to the lawyers. Helmers described himself as just a junior member of the firm who was following orders.
Helmers testified that he started clerking for Gallion’s firm while attending law school at the University of Kentucky. He became a junior associate after graduation and was making $50,000 a year when the fen-phen settlement was reached in May 2001.
That was before a $25,000 raise and the $3 million bonus. He left the firm a year later and is in solo practice in Lexington.
One of his roles was to distribute the settlement money to 40 of the 440 people who had sued the defunct American Home Products in Kentucky, claiming that the diet pill the company made had damaged their hearts.
Helmers testified that he offered those people less money than they were entitled to under the settlement agreement. He also said Gallion specifically told him not to tell the plaintiffs that the suit was settled for $200 million.
Helmers, who said he wasn’t offered immunity in exchange for his testimony, is set to be cross-examined today.
Retired Boone County Circuit Judge Joseph “Jay” Bamberger is among those expected to testify. He presided over the class action lawsuit and resigned rather than face the possibility of removal.