LINDA GOSNELL FIRING ALLEGEDLY CONNECTED TO FEN PHEN FUNDS.
Nov. 22, 2011
LawReader has confirmed that Fen Phen plaintiff’s lawyer
Angela Ford was ordered to provide an accounting to U.S. District Judge Danny
Reeves by Nov. 9, 2011. The accounting
of her handling of clients funds was requested by the U.S. Attorney’s office.
In December 2010 the
U.S. Attorneys Office obtained a court order from the Jessamine County Circuit
Court setting aside the judicial sale of the home of Fen Phen defendant William
Gallion. The U.S. Attorney’s Office
alleged that Angela Ford bought the Gallion home with money she was holding in
escrow for her clients. The U.S.
Attorney argued successfully that at least twelve of the client’s Ford was
holding money for were not her clients.
Several months ago the U.S. Attorney’s Office sought a
motion for Angela Ford to provide an accounting of the $42 million dollars she
was holding in escrow for her clients.;
Sources close to the Ky. Bar Association have reported to
LawReader that the KBA Chief Ethics Prosecutor, Linda Gosnell, was fired on
Monday Nov. 21, as a result of information
contained in the accounting. (Another
source says the actual firing occurred on Saturday Nov. 19th.)
Gosnell’s name has
been removed from the KBA website which previously listed her as KBA Bar
The Clerk’s Office for the Eastern District of Kentucky
(Covington) reports to LawReader that as of Nov. 22, 2011, Angela Ford has not
complied with that court order to provide the accounting. The Clerk does not
have a copy of the ordered accounting. We are trying to get a copy of that
Another source reports that the U.S. Attorney’s office has a
copy of that accounting and apparently shared the report with officials of the
KBA. The KBA reportedly fired Linda
Gosnell shortly after reading the distribution list of parties who received
payment out of clients funds.
Any further action regarding the release of the financial
accounting must be taken by Judge Reeves, or presumable by the U.S. Attorney’s
It is reported from sources close to the KBA that the
accounting contains a “distribution list” of persons who received
payments from Angela Ford, presumably paid out of client’s money held in
The money held by Angela Ford was seized by her after she
obtained a summary judgment in 2010 in the Boone Circuit Court. That summary judgment was appealed to the
Court of Appeals. The Court of Appeals
reversed the summary judgment, and Ford appealed to the Ky. Supreme Court where
the decision is still being considered.
Under a ancient rule known to every lawyer, no payments may
be made to a plaintiff until the case is final (the finality rule), and as of
the present there is no final judgment in the Fen Phen cases. It is reported by sources close to the Fen
Phen case that Angela Ford has distributed at least some of the $42 million
dollars she has seized in assets of a charity and from William Gallion et
al. Apparently the accounting reveals a
number of persons who received payments from these funds.
The Bar Counsel’s office has known of the actions of Angela
Ford in the handling of clients funds, and no public action has been
revealed. Sources close to William
Gallion report that Angela Ford seized his personal laptop which contained numerous
attorney client communications. She had
the laptop sold at a judicial auction.
Gallion’s family tried to purchase the laptop at the judicial sale, but
she was outbid by Angela Ford. These
sources report that Angela Ford had the hard drive copied and has retained his
attorney client communications.
LawReader is seeking information regarding the handling of
the news reports provided to the Bar Counsel’s office regarding conduct of
Angela Ford regarding her handling of clients escrow funds.
Any investigation of the actions of the Bar Counsel by the
KBA should ask if the Bar Counsel’s Office has hidden behind “confidentiality ”
rules and has not acted on published claims regarding Ford’s improper handling
of clients funds. One thing is clear,
the actions (and failure to act) by the Bar Counsel raise many troubling
questions that the public should be entitled to know. An independent investigation of the Bar
Counsel’s office is clearly warranted.
We further submit that the hiring of a Louisville law firm (Stites and
Harbison) in numerous ethics cases, should be closely examined. The Bar Counsel’s office employs nine full
time lawyers and the question of why outside counsel is needed by the KBA is a
fair question. Why the same Louisville
law firm is being hired should be examined.
We are still trying to confirm reports that relate to this issue.
current Supreme Court Rules (SCR 3.150 Access to
disciplinary information) limit the distribution of information about
ongoing ethics investigations. This
rule allows the Bar Counsel to hide ethics complaints for years.
This rule apparently can be
applied to hide from potential victims, the financial wrongdoing of their
lawyer. If Angela Ford has made a distribution of
seized funds, without a final judgment
to support the judgment ,
then Ford’s clients may be ordered to return any distributions. It is still possible that the Fen Phen
defendants may be retried and have a chance to win their civil case. If that happens and the $42 million has been
distributed, it is unlikely that refund of the money by Ford’s clients would be
It is reported by some sources that Angela Ford may have
distributed up to $13 million dollars to herself and others as attorney
fees. The only basis for Ford to pay
herself is a judgment of the Boone Circuit Court which has been reversed and
remanded for a new trial.
Until the accounting ordered by Federal Judge Danny Reeves
is released, the public and the Fen Phen plaintiffs and defendants will not
know what happened to the millions held by Angela Ford.