LAWFUEL – The Legal Newswire – William S. Lerach, formerly a name partner in the law firm now known as Milberg Weiss, has agreed to plead guilty to a federal conspiracy charge and acknowledge that he and others agreed to conceal from judges in federal courts Milberg Weiss’ secret payment arrangements with named plaintiffs in class-action lawsuits.
Lerach, a 61-year-old resident of Rancho Santa Fe, California, was charged in a criminal information filed this morning in United States District Court with conspiring to obstruct justice and to make false statements under oath. In a plea agreement also filed this morning, Lerach agreed to plead guilty to the conspiracy charge, to forfeit $7.75 million to the government, to pay a $250,000 fine, and to accept a sentence ranging from one year to two years in federal prison.
The case against Lerach is part of an ongoing investigation that last year led to the indictment of Milberg Weiss and two 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 well over $200 million in attorneys’ fees from these lawsuits over the past 20 years.
Earlier this year, former Milberg Weiss partner, David J. Bershad, a 67-year-old resident of Montclair, New Jersey, pleaded guilty to the same charge as Lerach – conspiring to obstruct justice and to make false statements under oath. One of the named plaintiffs who received kickbacks from the Milberg Weiss conspiracy – Steven G. Cooperman, 64, of Fairfield, Connecticut – also pleaded guilty to a conspiracy charge.
The remaining defendants in the case – the Milberg Weiss firm, former firm partner Steven G. Schulman, alleged paid plaintiff Seymour M. Lazar and attorney Paul T. Selzer – are scheduled to go to trial in January. In August, United States District Judge John F. Walter denied the defendants’ motions to dismiss which cleared the case for trial. A status conference in the case is set for Friday afternoon.
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.
“William Lerach’s plea can be credited to the thoroughness of this investigation and the dedication of the investigative team, to ensure that justice is done,” said Postal Inspector in Charge Pete Zegarac. “The U.S. Postal Inspection Service remains committed to the investigation of a conspiracy until each and every perpetrator has been brought to justice.”
Lerach will be summoned to appear in court for an arraignment in the coming weeks.
The case against Lerach is the result of an ongoing investigation by the United States Postal Inspection Service and IRS Criminal Investigation.
CONTACT: Assistant United States Attorney Richard E. Robinson
Assistant United States Attorney Robert J. McGahan
Assistant United States Attorney Douglas A. Axel
Release No. 07-114