LAWFUEL – US Law Firm News – A Connecticut man has agreed in papers filed today to plead guilty to conspiring with the Milberg Weiss law firm and several of its senior partners to obstruct justice and make false statements in class actions handled by the firm.
Steven G. Cooperman, 64, of Fairfield, Connecticut, has agreed to plead guilty to a conspiracy charge in United States District Court in Los Angeles. Under the agreement, Cooperman, who told investigators about the kickback scheme after being convicted of staging the theft of two prominent artworks, will admit that he received secret payments from Milberg Weiss to serve as lead plaintiff in numerous class actions filed on behalf of shareholders against publicly traded companies.
Cooperman and several relatives and associates served as named plaintiffs in approximately 70 class actions and shareholder-derivative actions brought by Milberg Weiss across the United States from 1988 until 2003. According to court documents filed this morning, Milberg Weiss obtained more than $133 million in attorneys’ fees as a result of these lawsuits and secretly paid Cooperman more than $6.4 million in kickback payments.
Cooperman concealed the kickback arrangement with Milberg Weiss by, among other things, falsely stating under oath in numerous courts that he would not receive any additional compensation, other than the same amount of money available to all class members, for serving as a named plaintiff in the lawsuit, according to the documents filed today. In truth, the secret kickback arrangement allegedly gave Cooperman payments that were, in some cases, more than 5,000 times greater than any recovery he would have received as a class member. For example, in litigation involving the Cetus Corporation in federal court in San Francisco, Cooperman’s pro rata share of the class recovery was $35.28, but he secretly received a $178,506 kickback payment from Milberg Weiss, which represented approximately 10 percent of the firm’s fee in the case.
Milberg Weiss allegedly concealed the kickbacks to Cooperman by paying them to Cooperman in cash and by disguising them as payments to several of his attorneys and associates. One of those lawyers, Richard Purtich, pleaded guilty last year to a tax charge for funneling Milberg Weiss kickback payments to Cooperman (see: http://www.usdoj.gov/usao/cac/pr2006/065.html).
In 1999, Cooperman and another attorney, James Tierney, were convicted of staging the theft of two of Cooperman’s paintings – a Monet and a Picasso – from Cooperman’s then-residence in Brentwood, California. According to the criminal information, Cooperman used money from the Milberg Weiss kickbacks to compensate Tierney for stealing the paintings.
After being found guilty of 18 federal charges in the insurance fraud case, Cooperman entered into a cooperation agreement with the government and provided information concerning his participation in the Milberg Weiss kickback conspiracy. However, while serving a 30-month prison sentence from 2001 into 2003, Cooperman committed additional crimes, which breached his cooperation agreement.
Cooperman is expected to make his first court appearance in the new case on April 2.
Another named plaintiff in several class actions litigated by Milberg Weiss – Howard J. Vogel, 62, of Aventura, Florida – pleaded guilty last year to making a false declaration to a court, admitting that he lied under oath to conceal the existence of his secret kickback arrangement with Milberg Weiss.
Last year, a federal grand jury in Los Angeles indicted the Milberg Weiss law firm and two of its senior partners for allegedly participating in a scheme to pay secret kickbacks to Cooperman and other named plaintiffs in class actions and shareholder derivative actions (see: http://www.usdoj.gov/usao/cac/pr2006/061.html). The defendants in that case are scheduled to go on trial in January 2008. Milberg Weiss and the other defendants in that case have pleaded not guilty to the charges.
The case is the subject of an ongoing investigation by the United States Postal Inspection Service and the Internal Revenue Service.
CONTACT: Assistant United States Attorney Douglas A. Axel
Assistant United States Attorney Robert J. McGahan
Assistant United States Attorney Richard E. Robinson
Release No. 07-014