William Lerach won billions of dollars in attorney’s fees in liability and securities lawsuits he filed against some of the Fortune 500’s biggest names during the last two decades, and he used his resulting fame and riches to become one of the Democratic Party’s most powerful donors. He also became a symbol of abuses by the tort bar.
Just this last Friday, he was featured in the “Rogues’ Gallery” portion of The Examiner’s “Lawyers Gone Wild” series. Now he is headed to federal prison in a plea bargain with the government in connection with the Justice Department’s 20-count indictment of Milberg Weiss, his former law firm in New York, and several of its principals and partners.
Assuming the court accepts the plea deal, Lerach will serve up to two years in prison after agreeing to plead guilty to one count of conspiracy as part of an alleged kickback scheme. He will also pay a fine of $250,000 and forfeit $7.75 million.
Lerach’s guilty plea will be the fifth so far in the government’s case alleging that Milberg Weiss illegally paid millions of dollars to clients who were lead plaintiffs in potentially lucrative class-action lawsuits. Firms representing lead plaintiffs usually win hefty fee awards in successful lawsuits whether they are settled in or out of court.
Until he split from Milberg Weiss and formed his own California-based firm in 2004, Lerach was one of the stars at Milberg Weiss. He and Melvyn Weiss are widely reported to be the “Partner A” and “Partner B” referred to throughout the government’s indictment of the firm.
Earlier this year, David Bershad, another former Milberg Weiss partner, pleaded guilty to conspiracy and agreed to cooperate with federal prosecutors. Bershad, who was the partner responsible for the firm’s accounting systems, kept a safe in his office filled with cash used to pay off clients, according to the government.
Another defendant, former Beverly Hills ophthalmologist Steve Cooperman, also pleaded guilty and admitted that he cooperated with the two unnamed partners and others in Milberg Weiss in an estimated 70 fraudulent class-action lawsuits filed by the firm.
The key point here is that the Milberg Weiss case likely represents only the tip of the iceberg. Liability lawsuit abuse costs more than $859 billion annually, according to the Pacific Research Institute. It’s about time more faces from the Rogues’ Gallery showed up behind bars.