According to the Wall Street Journal, former Ohio lawyer and class-action kingpin Stanley Chesley has been ordered by a Kentucky court to payback millions of dollars that he and associates bilked from their clients. In 2001 Mr. Chesley and his team of attorneys negotiated a $200 million settlement against a diet supplement manufacturer. Two attorneys in the case later went to jail for cheating their own plaintiffs out of all but $46 million (23%) of that award. While Mr. Chesley reaped $20 million off the settlement, he was granted immunity in the federal trial. He also initially obtained a dismissal from a civil suit brought on behalf of 382 of the clients, which in 2007 resulted in a $42 million judgment against other attorneys.
In 2013 the Kentucky Supreme Court disbarred Mr. Chesley over his role in the scandal. The opinion held that he had “knowingly participated in a scheme to skim millions of dollars in excess attorney’s fees from unknowing clients.” That ruling tipped the iceberg and Boone County, Kentucky Judge James Schrand relied upon court’s findings as one reason to hold Mr. Chesley jointly and severally liable for the $42 million civil judgment. Chesley is potentially on the hook for everything beyond the $17 million of the $42 million that has so far been collected—plus tens of millions more in interest. He also faces possible punitive damages.
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