Class-action attack dogs William Lerach and Melvyn Weiss were once described by The New York Times as “creative, belligerent, grasping, innovative, wily and unrelenting.” Now another characteristic — getting off easy — should be added to the description of Lerach, who, with Weiss as his longtime mentor, became wealthy by suing others for their alleged failings. What else can be said of the penalty exacted of a man who, according to an official spokesman, “played an integral role” in a long-running criminal scheme exposed in the Justice Department’s 20-count indictment? The scheme paid $11.8 million in kickbacks to lead plaintiffs and witnesses for favoring Milberg Weiss in hundreds of liability and class-action securities lawsuits. The scheme helped generate more than $250 million for the firm over a 25-year period. After pleading guilty to one count of obstruction of justice — a felony — Lerach faces two years in federal prison, at most, and forfeiture of $8 million. As part of his plea bargain, Lerach won’t have to cooperate with the government as it continues to investigate his avaricious cronies.
When Lerach departs prison to return to his lavish San Diego mansion in a year or two, he will find it still stuffed with fine furniture and décor, his fancy cars will remain in the driveway, his substantial investments will continue fattening his wallet and, despite losing his law license, he will be a highly sought and well-paid speaker, consultant and media expert. That’s some punishment for admitting to being a key player in a long-running fraud upon the American people and their legal system. Lerach’s fraud ultimately cost thousands of people their jobs, ruined the reputations of countless honest executives, and deprived millions of investors of deserved returns.
Lerach’s sentence must be considered in light of the criminal enterprise in which he participated. He conceded the truthfulness of the massive case against him, his former partners and law firm; the official spokesman confirmed to The Examiner that Lerach was indeed one of two unnamed partners in the government’s original indictment. David Bershad, the former Milberg Weiss partner who oversaw the firm’s accounting systems and kept a stash of kickback cash in a safe in his office, admitted guilt earlier this year. Another former partner, Steven Schulman, accepted a deal last week in which he pleaded guilty to racketeering and participating in the kickback scheme.
Earlier this year, Beverly Hills ophthalmologist Steven Cooperman pleaded guilty and admitted that he, as well as some of his relatives and associates, were paid by Milberg Weiss in at least 70 cases. Something else will be waiting for Lerach when he returns home to San Diego — the last laugh.