Kentucky attorney, two others charged in drug case
LOUISVILLE, Ky. —Seth J. Johnston got hired for a small piece of a big case — to help collect $42 million from four now-disbarred attorneys accused of bilking their clients out of a massive settlement stemming from the diet drug fen-phen.
The money hasn't been collected and now Johnston sits in a jail cell. Johnston, his fiancée and his brother have been caught in a tangled web involving a synthetic marijuana ring and accusations of witness tampering and attempted evidence destruction.
Federal agents arrested Johnston, 32, on Feb. 8, after a federal grand jury charged him with conspiring with eight co-defendants to distribute synthetic cannabis and with lying to FBI and Drug Enforcement Administration agents by denying involvement when he had invested $100,000. Johnston also is charged with attempting to corrupt a potential witness by encouraging him not to cooperate with law enforcement.
The allegations against the Lexington attorney and taped jailhouse phone calls were enough for U.S. Magistrate Judge Robert Wier to order Johnston held pending trial on the drug charges, finding he "would go to any length to save himself."
"He, a licensed attorney and court officer, does this through a deceptive blend of cajoling, misrepresenting legal principles, offering improper inducements (such as help with defense costs), and personal appeals," Wier wrote in February.
Prosecutors charged his fiancée, Stacey Birden of Lexington, and his brother, Benjamin Johnston, on Tuesday with conspiracy to destroy documents subpoenaed by a federal grand jury.
Along with the drug case, court records show that the FBI has been investigating allegations that Johnston misused money from a client, Lexington lawyer Angela Ford, and whether he improperly took money from the estate of another client.
Ford hired Johnston hired to help collect the multi-million dollar judgment from attorneys Shirley Cunningham Jr., William Gallion and Melbourne Mills Jr. The three were ordered to pay former clients who had sued over injuries from the diet drug fen-phen. Ford, who won the judgment, has sued Johnston over his handling of that case, too.
Ford alleges he stole money from her and two companies she owns. The suit doesn't specify how much was taken or how Johnston got his hands on the money. Johnston has filed a counterclaim, which has been sealed.
The court records do not specify if there is a connection between Johnston's alleged $100,000 investment and the fen-phen judgment. U.S. Attorney's spokesman Kyle Edelen declined to comment on anything not in the court records.
FBI Special Agent Joseph Moutz said in two criminal complaints that Johnston spoke multiple times with his fiancee, Birden, by phone when he was in the Fayette County Detention Center. The criminal complaint includes partial transcripts of the calls on March 28 and March 30. In those calls, Birden discussed being subpoenaed by a federal grand jury to produce checkbooks from one of Ford's companies as well as checkbooks from Johnston's former law firm, Miller Wells, as well as any documents "in your possession."
Johnston, who has pleaded not guilty to the drug charges, told Birden not to dump the checkbooks in the household trash, but get rid of them "in a public disposal."
"We have to draw a very careful distinction between documents that are 'in your possession'," Johnston told Birden on March 28.
"Oh," Birden replied.
"They just (inaudible) electronically stored information as well. We might have to deal with that. Does that make sense?" Johnston said.
"Yeah," Birden answered.
Two days later, Birden and Johnston spoke again in a call recorded at the jail.
"Did Ben tell you what to do with the stuff in the subpoena?" Johnston asked.
"Yeah," Birden answered.
"Is that OK?" Johnston said.
"Yeah," Birden said.
Moutz wrote that the checkbooks and other subpoenaed financial documents were found in a trash bin at a self-storage facility where Birden and Benjamin Johnston had a unit.
"Written on top of one of the boxes, in black magic marker, are the words 'do not produce'," Moutz wrote. "I then collected the files."
Birden and Benjamin Johnston have yet to make initial appearances in federal court in Lexington.
The lawsuit and indictment are the twists in a saga that started a dozen years ago, when famed Cincinnati lawyer Stan Chesley helped Gallion, Cunningham and Mills negotiate a $200 million settlement from what is now Wyeth, maker of the diet drug that was withdrawn from the market when it was shown to cause heart-valve damage.
A judge in 2006 found that the Lexington lawyers improperly kept the settlement amount secret from their clients and passed out "money to themselves and others like it was theirs to do as they wished."
The Kentucky Court of Appeals later reversed the judgment and the case is now at the state Supreme Court, Cunningham and Gallion were convicted of fraud in a federal criminal trial and are serving sentences of 20 and 25 years, respectively. Mills was acquitted.
All four lawyers have been permanently disbarred. Another attorney and a former judge have also been disbarred.
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Follow Associated Press reporter Brett Barrouquere on Twitter: http://twitter.com/BBarrouquereAP
The money hasn't been collected and now Johnston sits in a jail cell. Johnston, his fiancée and his brother have been caught in a tangled web involving a synthetic marijuana ring and accusations of witness tampering and attempted evidence destruction.
Federal agents arrested Johnston, 32, on Feb. 8, after a federal grand jury charged him with conspiring with eight co-defendants to distribute synthetic cannabis and with lying to FBI and Drug Enforcement Administration agents by denying involvement when he had invested $100,000. Johnston also is charged with attempting to corrupt a potential witness by encouraging him not to cooperate with law enforcement.
The allegations against the Lexington attorney and taped jailhouse phone calls were enough for U.S. Magistrate Judge Robert Wier to order Johnston held pending trial on the drug charges, finding he "would go to any length to save himself."
"He, a licensed attorney and court officer, does this through a deceptive blend of cajoling, misrepresenting legal principles, offering improper inducements (such as help with defense costs), and personal appeals," Wier wrote in February.
Prosecutors charged his fiancée, Stacey Birden of Lexington, and his brother, Benjamin Johnston, on Tuesday with conspiracy to destroy documents subpoenaed by a federal grand jury.
Along with the drug case, court records show that the FBI has been investigating allegations that Johnston misused money from a client, Lexington lawyer Angela Ford, and whether he improperly took money from the estate of another client.
Ford hired Johnston hired to help collect the multi-million dollar judgment from attorneys Shirley Cunningham Jr., William Gallion and Melbourne Mills Jr. The three were ordered to pay former clients who had sued over injuries from the diet drug fen-phen. Ford, who won the judgment, has sued Johnston over his handling of that case, too.
Ford alleges he stole money from her and two companies she owns. The suit doesn't specify how much was taken or how Johnston got his hands on the money. Johnston has filed a counterclaim, which has been sealed.
The court records do not specify if there is a connection between Johnston's alleged $100,000 investment and the fen-phen judgment. U.S. Attorney's spokesman Kyle Edelen declined to comment on anything not in the court records.
FBI Special Agent Joseph Moutz said in two criminal complaints that Johnston spoke multiple times with his fiancee, Birden, by phone when he was in the Fayette County Detention Center. The criminal complaint includes partial transcripts of the calls on March 28 and March 30. In those calls, Birden discussed being subpoenaed by a federal grand jury to produce checkbooks from one of Ford's companies as well as checkbooks from Johnston's former law firm, Miller Wells, as well as any documents "in your possession."
Johnston, who has pleaded not guilty to the drug charges, told Birden not to dump the checkbooks in the household trash, but get rid of them "in a public disposal."
"We have to draw a very careful distinction between documents that are 'in your possession'," Johnston told Birden on March 28.
"Oh," Birden replied.
"They just (inaudible) electronically stored information as well. We might have to deal with that. Does that make sense?" Johnston said.
"Yeah," Birden answered.
Two days later, Birden and Johnston spoke again in a call recorded at the jail.
"Did Ben tell you what to do with the stuff in the subpoena?" Johnston asked.
"Yeah," Birden answered.
"Is that OK?" Johnston said.
"Yeah," Birden said.
Moutz wrote that the checkbooks and other subpoenaed financial documents were found in a trash bin at a self-storage facility where Birden and Benjamin Johnston had a unit.
"Written on top of one of the boxes, in black magic marker, are the words 'do not produce'," Moutz wrote. "I then collected the files."
Birden and Benjamin Johnston have yet to make initial appearances in federal court in Lexington.
The lawsuit and indictment are the twists in a saga that started a dozen years ago, when famed Cincinnati lawyer Stan Chesley helped Gallion, Cunningham and Mills negotiate a $200 million settlement from what is now Wyeth, maker of the diet drug that was withdrawn from the market when it was shown to cause heart-valve damage.
A judge in 2006 found that the Lexington lawyers improperly kept the settlement amount secret from their clients and passed out "money to themselves and others like it was theirs to do as they wished."
The Kentucky Court of Appeals later reversed the judgment and the case is now at the state Supreme Court, Cunningham and Gallion were convicted of fraud in a federal criminal trial and are serving sentences of 20 and 25 years, respectively. Mills was acquitted.
All four lawyers have been permanently disbarred. Another attorney and a former judge have also been disbarred.
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Follow Associated Press reporter Brett Barrouquere on Twitter: http://twitter.com/BBarrouquereAP
http://www.courierpress.com/news/2013/apr/05/kentucky-attorney-two-others-charged-in-drug/
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