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Fen Phen Lawyer Indicted….AGAIN

We have followed the fen phen fiasco since day one and have written about the civil case as well as the previous criminal indictments against the lawyers. Well, one of them has been indicted over statements he made to his legal malpractice insurance company.  

According to the Lexington Herald-Leader, “Disbarred lawyer Melbourne Mills Jr., who represented clients in a multimillion-dollar diet drug settlement, was indicted Tuesday on a fraudulent insurance acts charge by a Fayette County grand jury. The felony count stems from an incident on or about Aug. 11, 2003. The indictment alleges that Mills knew that a statement made to an insurer, board of claims or agent for the purpose of obtaining, renewing or replacing an insurance policy contained false, incomplete or misleading information Fayette Commonwealth’s Attorney Ray Larson said he could not comment on the case. The name of the insurer, board of claims or agent was not listed in the indictment. Mills has been involved in a federal court case with Continental Casualty Co., which issued a liability policy to his firm and paid for his defense in a lawsuit against him by his former fen-phen clients. Senior U.S. District Judge Joseph Hood said in March that Mills committed “material misrepresentations or omissions of fact” in a 2003 application to the company. In 2006, a judge ruled that Mills and lawyers William Gallion and Shirley Cunningham had to pay $42 million to clients whom they had swindled in the diet drug settlement. Mills was acquitted of criminal charges in the case, but the state bar association voted to disbar him”

All of the above stems from an application for legal malpractice insurance Mills’ completed and submitted to his insurance company during the fen-phen fiasco.  According to Judge Hood, in adeclaratory judgment action filed by Mill’s insurance company, “Mills’s 2003 Application for insurance, which resulted in Continental issuing the Policy of insurance, contained misrepresentations or omissions which satisfy at least one of the three criteria found in KRS 304.14-110. When asked in question 4 of the 2003 Application if any attorney had been “disbarred, suspended, formally reprimanded or subject to any disciplinary inquiry, complaint or proceeding for any reason other than nonpayment of dues during the expiring policy period,” (emphasis added) Mills answered “NO.” Mills’s answer to question number 4 is clearly a misrepresentation or omission. Mills knew that a bar complaint had been filed against him in early 2002, and he admitted that as of the date he signed and certified the 2003 Application, the KBA’s investigation was ongoing. Not only was Mills aware that an investigation was ongoing, his attorney attended a hearing held by the KBA Inquiry Commission, which resulted in Mills being served with a subpoena duces tecum requesting records related to the Fen- Phen Action.”  

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