Joined: 18 Aug 2004
|Posted: Wed Jun 21, 2006 11:44 am Post subject:
A law firm is indicted, and now Mel Weiss and Bill
Lerach, the kings of securities class actions, are
feeling the pressure.
By Robert Lenzner and Daniel Fisher
|William Lerach and Melvyn Weiss have maintained they're not the targets of the criminal investigation that has thus far yielded indictments of the Millberg Weiss law firm and two of its name partners. That may be true -- for now. But with each new court filing, the government draws another bead of sweat on the brows of these two kings of securities class actions.
In May a Los Angeles grand jury asserted in an indictment that law firm Milberg Weiss Bershad & Shulman, and partners David Bershad and Steven Schulman, directed millions of dollars in illegal kickbacks to people who agreed to serve as plaintiffs in the firm's lucrative securities suits. The three defendants deny the charges. Such payments are illegal because they might induce a named plaintiff to sell his fellow plaintiffs down the river in a settlement that yields a large sum for the lawyers and a pittance for each injured shareholder. The case is bolstered by guilty pleas from mortgage broker Howard Vogel, who was a plaintiff in 40 cases, and lawyer Richard Purtich, who served as an intermediary in the alleged scheme. (Opening paragraphs of the story beginning at p. 48)
Listen to the NPR report of May 19/06 by Ari Shapiro, Law Firm Allegedly Paid Kickbacks to Plaintiffs.
View the Central California U.S. District Attorney's news release of May 18/06 regarding the law firm's indictment.
View the full indictment at Findlaw. Here's an excerpt:
|48. To further conceal and disguise the kickbacks paid to the Paid Plaintiffs in cash:
a. MILBERG WEISS, BERSHAD, Partner A, and others known and unknown to the Grand Jury obtained and caused to be obtained the cash in a manner that made the payments difficult to trace, including from casinos;
(From p. 34 of 105)
...So much for the argument that brick and mortar casinos provide better transaction records than Internet gambling operations.
Track the indictment at WSJ.com's excellent Law Blog beginning at the June 21/06 post, Competitors Question Lerach Coughlin’s Fitness as Lead Counsel, by Peter Lattman.