LAWFUEL – William S. Lerach, a former name partner in the law firm now known as Milberg Weiss, was sentenced today to two years in federal prison after pleading guilty last year to a federal conspiracy charge and acknowledging that he and others concealed secret payment arrangements that Milberg had with named plaintiffs in class-action lawsuits.
Lerach, a 61-year-old resident of the La Jolla section of San Diego, California, was sentenced today by United States District Judge John F. Walter. During the hearing, Judge Walter emphasized the seriousness of Lerach’s criminal conduct, stating that Lerach’s conduct “corrupted the law firm and it corrupted it in the most evil way.”
Lerach pleaded guilty last September to conspiring to obstruct justice and to make false statements under oath. As part of his guilty plea, Lerach agreed to forfeit $7.75 million to the government, to pay a $250,000 fine, and to accept a sentence of up to two years in prison.
The case against Lerach is part of an investigation that led to the indictment of Milberg Weiss and three of its name partners for allegedly participating in a scheme in which several individuals were paid millions of dollars in secret kickbacks in exchange for serving as named plaintiffs in more than 150 class-action and shareholder derivative-action lawsuits. The indictment alleges that the firm received over $250 million in attorneys’ fees from these lawsuits over the past 20 years.
“Mr. Lerach manipulated the court system for his own personal gain,” said United States Attorney Thomas P. O’Brien. “Now, after telling lies – and encouraging others to lie – to federal judges across the country, he will pay the price by spending two years in federal prison.”
In his plea agreement, Lerach acknowledges making secret payments to Cooperman, and acknowledges that other plaintiffs received payments from other partners of Milberg Weiss. These individuals were generally promised 10 percent of the attorneys’ fees received by Milberg Weiss. The payments were kept secret from the courts overseeing the class actions, and the named plaintiffs who received the kickbacks made false statements under oath concerning the payments.
“As law enforcement, it is our responsibility to preserve the integrity of our nation’s judicial system. We remain committed to the investigation of those who violate that system for their own personal gain,” said B. Bernard Ferguson, Inspector in Charge of the Los Angeles Division of the U.S. Postal Inspection Service.
Former Milberg Weiss partners David J. Bershad and Steven G. Shulman pleaded guilty to the same charge as Lerach – conspiring to obstruct justice and to make false statements under oath. The remaining defendants in the case – the Milberg Weiss firm, name partner Melvyn I. Weiss and Paul T. Selzer, an attorney who allegedly served as an intermediary for the one of the paid plaintiffs – are scheduled to go on trial in August on racketeering and other federal offenses.
The case against Lerach, Milberg Weiss and the other defendants is the result of an investigation by the United States Postal Inspection Service and IRS – Criminal Investigation.
CONTACT: Assistant United States Attorney Robert J. McGahan
Assistant United States Attorney Richard E. Robinson
Assistant United States Attorney Douglas A. Axel
Release No. 08-012