Arledge’s sentence toughest allowed|[10/12/07]

Published 12:00 am Friday, October 12, 2007

JACKSON — Although not labeled an organizer of the operation, former Vicksburg attorney Robert Arledge, who was convicted on seven counts of conspiracy and mail and wire fraud, was sentenced to 6 1/2 years in federal prison Thursday, the most severe punishment thus far for defrauding a national fund established by the maker of a diet drug that contained fen-phen.

Arledge, whose attorneys said his conviction and sentence will both be appealed, is to surrender before noon Jan. 7, 2008, to begin serving time. The federal prison where he will serve his sentence has not been determined. His prison time will be followed by three years of supervised release.

While as many as 20 people, most of them Jefferson County residents, have admitted guilt or been convicted of wrongdoing in the same scam, Arledge is the only attorney indicted. At the time, he reportedly headed the mass tort division of the Jackson firm Schwartz and Associates.

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Other defendants dealt with in the case include Regina Green, Deborah Hadley, Eva Johnson, the Rev. Gregory Warren and Flo Wyatt. U.S. District Judge David Bramlette said in court Thursday that Green had been sentenced to house arrest and Johnson was handed a 31-month sentence.

Hadley, Warren and Wyatt have yet to be sentenced, but Assistant U.S. Attorney Marc Perez, who prosecuted Arledge’s case, said he doesn’t expect their punishments to be as harsh as what Arledge was handed.

Perez explained that due to the amount of false claims for which Arledge is responsible, $6,710,344.90 as stated by Bramlette in court Thursday, his potential sentence according to the federal sentencing guidelines was increased 18 levels. That’s in addition to the base level of six and another two levels for abusing a position of trust. Arledge’s total of 26 qualified him for 63 to 78 months in prison. Bramlette gave him the maximum.

Along with 6 1/2 years of prison time, Arledge was also ordered to immediately pay $375,000.

“I feel this is a reasonable sentence,” Perez said. “Any time the judge hands down a sentence that’s within the federal guidelines I feel that it’s fair.”

However, Amy Adelson, one of Arledge’s attorneys, said the defense will “definitely” appeal both the sentence and conviction.

“We feel that this sentence was quite harsh,” Adelson said. “It seems disproportionate when compared to what the others have been sentenced.”

Also unsatisfied was Betty Arledge, the defendant’s wife.

“We’re not happy with anything right now because he is innocent,” she said after the sentencing.

Bramlette additionally ordered Arledge, 50, to appear before the court again Dec. 12 for further orders on repaying the nearly $7 million Arledge received in fees.

The conviction was March 23 after eight days of testimony from more than a dozen government witnesses, including some who had already pleaded guilty to fraudulently saying they had taken the prescription drug later linked to heart ailments. Jurors aquitted Arledge of 17 counts of money laundering.

The defense called no witnesses and maintained that Arledge didn’t know the information clients provided was false.

His sentencing date had been delayed twice. Originally set for Aug. 6, it was postponed after discussions arose about sentencing guidelines, specifically, to determine the total amount of losses for which Arledge is responsible and establish whether he was an “organizer” of the illegal operation.

Also debated was how a Nov. 1, 2001, amendment to federal sentencing guidelines would play into Arledge’s sentencing. Bramlette said he found some of the illegal activities, including conspiracy, to have occurred after that date, but also noted in court Thursday this amendment played no part in deciding Arledge’s sentence.

The sentencing date was then rescheduled for Aug. 27, but was postponed again. No specifics were given regarding that delay, but it had been reported that Marcie Koch, the wife of Arledge’s lead attorney, Karl Koch, died nine days earlier in Tucson, Ariz.

Arledge’s indictment listed goods and services it says he bought using an estimated $8 million in funds obtained fraudulently from a settlement trust. That trust was designed for American Home Products, now Wyeth, to settle claims for damages regarding people who were harmed by using drugs it manufactured and sold under the names Pondimin and Redux. Those drugs were used in a combination called fen-phen that was prescribed to treat obesity. The drugs were pulled from the market in 1997 after research revealed they could cause heart problems.

Attorneys who processed claims to the fund were paid a percentage of settlements of about $250,000 each. After making millions in the case, Arledge built and furnished a mansion in Vicksburg’s Turning Leaf subdivision and made an unsucessful bid to be elected judge of Warren County Court and Warren County Youth Court. The house has been listed for sale.

U.S. Attorneys have not said whether investigations into other possible wrongdoing in the settlements have ended.