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On my first day at voiceofsandiego.org, back in those innocent, hazy days of 2005, I was asked to type up a quick snippet on the legal woes of one William S. Lerach, a very prominent San Diego attorney.
I must confess that, at the time, I was rather baffled about what Lerach’s troubles were all about.
This article in today’s Los Angeles Times has done a great job filling me in as to the details of the case against Lerach and others.
The story focuses on David Bershad, an ex-partner at Milberg-Weiss, a New York-based firm that, according to the Times, made more than $45 billion for investors in large shareholder class action lawsuits. The firm is accused of running a huge kickback scheme.
On Monday, Bershad reportedly made a plea agreement. According to the Times, Bershad’s guilty plea could spell trouble for Lerach and Milberg-Weiss co-founder Melvyn I. Weiss:
Bershad’s plea in Los Angeles federal court “makes it practically inevitable” that the prosecutors will indict Lerach and Weiss, said John C. Coffee, a Columbia Law School professor.
“This is playing out with the slow inevitability of a Greek tragedy,” Coffee said.
Here’s what the Milberg-Weiss lawyers are accused of doing:
Milberg’s enormous success was attributable in part to the fact that the firm often was the first to file a lawsuit against a company and thus became the lead lawyers in a class action against it. Prosecutors have alleged that Milberg won the race to the courthouse and a larger share of legal fees because it kept a stable of plaintiffs on standby to whom it paid kickbacks, often through intermediaries.
The Times reports that Bershad told the court Monday that he and two other individuals, (identified only as Plaintiff A and Plaintiff B but “widely believed” to be Lerach and Weiss), pooled money into a fund kept in Bershad’s office that was used to supply cash for secret payments to be paid to plaintiffs and others.
Here’s a bit more on Lerach from the story:
Lerach, 61, is planning to retire this year as head of his firm, Lerach Coughlin Stoia Geller Rudman & Robbins, according to reports published Monday. Dan Newman, a spokesman for the firm, said Lerach hadn’t set a date for his departure, but “he’s promised to retire before he will allow the Milberg Weiss matter to become a distraction to this firm.”
The remaining defendants’ trial is scheduled to begin Jan. 8, the Times reports.