FEDS SENTENCE LEXINGTON ATTORNEY TO 20 YEARS FOR MISHANDLING FEN PHEN FUNDS

 

Sept. 22, 2014

A former Lexington attorney was sentenced Monday to 20 years in prison for defrauding more than 250 victims out of $4 million through various schemes, one of which involved the notorious fen-phen diet drug case.

Seth J. Johnston, 35, pleaded guilty in October 2013 to charges of wire, mail and tax fraud and to obstruction of justice and distribution of synthetic marijuana.

U.S. senior District Judge Joseph M. Hood also imposed three years of supervised release once Johnston gets out of prison.

“Mr. Johnston relentlessly pursued a course of criminal conduct that is breathtaking in both its scope and audacity,” said Kerry B. Harvey, U.S. attorney for the Eastern District of Kentucky. “He seemingly missed no opportunity to defraud those with whom he dealt; often abusing his status as an attorney to do so. The sentence imposed today is just punishment for reprehensible conduct that victimized so many who placed their trust in Mr. Johnston.”

Johnston must serve 85 percent of his prison sentence under federal law.

Johnston’s fraud included the following.

■ Responsible for collecting money for plaintiffs in a civil lawsuit as part of a settlement regarding the diet drug fen-phen. Johnston diverted $14,963 of the collected money for his own use. According to the U.S. Attorney’s Office, “Angela Ford, the Lexington attorney representing the plaintiffs in the lawsuit, hired the law firm where Johnston worked to garnish assets of the defendants in that lawsuit, William Gallion, Shirley Cunningham and Melbourne Mills, Jr. This fraud scheme started in 2008 and continued through 2010.”

■ Johnston diverted a significant amount of $3.5 million of Ford’s money that she wanted held in multiple corporate accounts. Johnston admitted to taking the money for his personal use and to buy property for other clients.

■ He diverted about $1.1 million that should have gone to heirs of an estate for which he worked.

■ He used $100,000 to buy synthetic marijuana to be distributed in Lexington.

■ He told witnesses to destroy documents investigators wanted.

■ He reported taxable income in 2011 of $26,372 when his income was $208,950.
Read more here: http://www.kentucky.com/2014/09/22/3442158_former-lexington-attorney-sent.html?rh=1#storylink=cpy

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