Most of the facts contained in this article can be found in the following books: Descent of Angels by Mitchel Scanlon,Fallen Angels by Mike Lee, and Angels of Darkness by Gav Thorpe
Lexicanum articles referenced in this article are:
http://wh40k.lexicanum.com/wiki/Cypher /// http://wh40k.lexicanum.com/wiki/Dark_Angels /// http://wh40k.lexicanum.com/wiki/Luther /// http://wh40k.lexicanum.com/wiki/Lion_El%27Jonson /// http://wh40k.lexicanum.com/wiki/Lion_Sword
All I have done is to compile them into one article, in what I believe to be an easily understandable way. That is the only thing I take credit for.
Instigation of this Article's Creation
I came across a post in the 40K background forum inquiring about the Fallen of the Dark Angels. I answered it with the below synopsis, and didn't want to waste my "work". I hope to use this article as a reference for any questions or fact checking regarding the story, history, or current situation dealing with the Dark Angel's darkest secret. I encourage you to do the same, and please feel free to edit the article with missing information, or to correct any mistakes.
A Summary of the story of the Fallen Angels
Before the Emperor
Lion El' Johnson was warped to Caliban when the ruinous powers scattered the Primarchs across the galaxy. He lived a few years in the jungles of Caliban which was know as a death world (the same as Catachan, meaning that this world was inimically ruthless to live on a global level.) For Caliban it was it's jungles and it's monsters that earned it this label when it was found by the Imperium. I say that to show why Luther was so stunned to find a human surviving on the jungles alone. Though he appeared to be an adult he was only around 10 though Luther immediately recognized his importance to Caliban and took him back to the fortress of the Order.
The Lion and Luther grew very close as the Lion rose through the ranks of the orders on Caliban, eventually uniting them and all knightly orders excepting one incidentally the house from which Cypher originates (also making him older than Bjorn the Fell Handed, sorry space wolves) and beginning an extermination of the jungle's beasts. This quest was successful and it was not long after this that the Emperor found his son. The Lion readily joined the Emperor and assumed command of the 1st legion: the Dark Angels.
After the Emperor
With the coming of the Emperor, so too did the rest of the legion. When the Lion assumed command and joined the great crusade there began an almost imperceptible schism among the battle-"brothers". Those from Terra felt themselves to be above the Calabanites. They treated them as... not quite inferiors, but suffice to say they didn't think the Calabanites were as civilized as they. Squads generally consisted of only Terrans or only Calabanites, and it was common for the sergeants of the different squads to squabble among each other.
This came to a head when the Lion and Luther assaulted a Saroshi ship while crusading. The Lion and Luther became separated. Luther came across a bomb aboard the ship that would kill the Lion. Luther's initial instinct was driven by his jealousy of the Lion which had recently become Luther's internal issue. For a moment he thought of leaving the ship without disabling the bomb and letting the Lion die. It was not long before this instinct passed though, and Luther and a Dark Angels Librarian by the name of Zahariel defused the bomb saving themselves and the Lion.
The Banishment of the Calabanites
Luther came to blame himself for his initial instinct, and somehow the Lion could sense it. The Lion ordered Luther, along with most of the battle-brothers that were Calabanites back to Calaban to "oversee recruitment and training".
At first the Calabanites did their duty with no remorse. They missed the front and longed to join their primarch, but nothing more. That changed as years passed. Eventually the Lion wouldn't even answer messages sent to him inquiring as to the progress of the campaigns, and wondering when the Calabanites might be able to return to his side. Doubt and frustration, jealousy and eventually hatred of what the Calabanites perceived as their banishment began to warp their view of their primarch. (It is pertinent to mention here that the Calabanites who resided on Caliban's distrust of the Terrans was fueled most when they discovered a group of Terran battle-brothers on Caliban were in fact a cult of daemon-worshipers. This cult was in the process of summoning an ancient evil deep within the planet itself (the source of the dangerous nature of the planet's jungles). The cult was eventually destroyed, but it was this encounter which peaked Luther's interest in the Warp. He began reading the books left behind by the cult, and studying and implementing some of the knowledge contained within.)
(It is important to note that while most of the marines that were "banished" were Calabanites, this is not true of ALL of them. By that same token, most of the marines that were NOT banished were terran, however, this is not true of ALL of them, which is to say that some Calabanites were not sent back to Calaban, and remained with the Lion [example: Zahariel].)
The Return of the Lion
When the Lion eventually returned to Calaban, he was not greeted with open arms. There is debate on who fired the first shots (According to a captured and interrogated Fallen Angel by the name of Astelan, it was the Lion who betrayed the legion. According to the current Dark Angels it was the Fallen who immediately attacked them upon their return to Calaban, with no word what-so-ever beforehand.) , but brothers died fighting brothers and Calaban was all but destroyed. Only The Tower of Angels remains of the planets surface. It is now the space-fairing bastion of the Dark Angels and their citadel. (Their flag-ship is known as The Rock)
At the climax of the fighting Luther and the Lion fought. The Lion hurt but refused to kill his dear friend. Luther however had no such reservations. He sent a powerful spell surging towards the Lion which resulted in a mortal wound. At that exact moment lucidity returned to Luther and he realized how far he had fallen. He knelt next to the Lion's body and wept. This is how the pair was found.
It is a closely guarded secret that Luther is now held in a dungeon deeper than any other in the Tower of Angels. Some state that he is kept in cryo-stasis, some state that he lives in a maddened stuppor, but either way it is known that upon each subsequent Chapter Master of the Dark Angel's "induction" they interrogate him with the purpose of hearing him repent. He only begs for the Lion's forgiveness, but alas, he receives none.
The Lion's body now dwells in an inaccessible chamber beneath the Tower of Angels. There he slumbers, alone with the Watchers in the Dark. There is speculation that he is healing, and that he will rise at a time when Humanity and his chapter need him most.
The Fallen Now
As for the rest of the Fallen, at the moment of their defeat the Chaos Gods spared them, after a fashion. Each surviving Calabanite was warped away from Calaban and cast through space and time. They now travel the universe; most are alone while others lead bands of marauders. Some fight for Chaos. Some fight against the Imperium. Some simply fight. But, according to the Lexicanum, most realize their actions prior to their fall were wrong, and they continue to fight the enemies of the Imperium to atone for their betrayal. It is suspected that there are between 100 and 150 remaining Fallen
There is a sect of the chapter which will chase any rumor of a sighting of a member of the Fallen (the Deathwing, consisting of terminators only. They are the chapter's first company). They try their utmost to capture them alive. These captives are then turned over to chaplians within the chapter which have been trusted with the chapter's darkest secret: Interrogator-Chaplains. It is the duty of the Interrogator-Chaplains to interrogate these Fallen. To interrogate and torture them until they repent. If they do repent they are given a clean death. If they do not, however, they are held as prisoners in the Tower of Angels, continually tortured until they do. For each Fallen a Chaplain convinces to repent he is given a black pearl to wear.
Chief among the Fallen is Cypher. It is not known whether that is his true name, or if that is name of the positions he held before he "fell". It is true that such a position existed. The holder of it was responsible for keeping the secrets and traditions of the legion. The last known cypher was a battle-brother who joined the order and was later found to be a former Knight of Lupus, and was using a false name. In any event, Cypher is the one who possesses the broken pieces of the Lion Sword. He never draws it, instead choosing to use an ornate bolt pistol and a similarly ornate plasma pistol. That is his signifying trait.
Cypher's intentions are unknown. It is not even known if he is against the Imperium at all. Whenever he does show his face he generally attacks imperial forces, but only to goad them into reinforcement or to otherwise draw attention to where it is needed most resulting in the Imperium winning whatever will befall it. It is true that these occurrences seem to be getting closer and closer to Terra. Some say that Cypher wishes to reforge and present the Lion Sword to the Emperor as an apology for what the Fallen did. Others argue that he will reforge it and use it to kill the Emperor. Still others say that he will indeed kill the Emperor, but it will continue his pattern of helping the Imperium through unconventional ways by allowing the reincarnation of the Emperor as the next Star Child.
Only once has Cypher been captured. He was captured by the Black Templars and held on a battle-barge. The Black Templars proceeded to let the Dark Angels know that they appeared to have captured an individual wearing ancient space marine armor bearing no markings and wielding a bolt and plasma pistol. The Dark Angels told this battle-barge to meet them at a certain location in space. They met and Cypher was transferred to the Dark Angel's battle-barge. Nothing more was ever heard from the Black Templar ship, nor from anyone who had been on it. Some take this to mean the Dark Angels covered the tracks of their dirty secret. In route back to the Tower of Angels the prisoner was to be interrogated. When the Dark Angels went to fetch him from his cell he had disappeared without a trace. No one knows how.