- The Washington Times - Wednesday, September 19, 2007

LOS ANGELES — Pioneering class-action attorney William S. Lerach agreed to plead guilty to a federal conspiracy charge involving a kickback scheme, prosecutors said yesterday.

The deal came after a seven-year federal investigation into charges that Mr. Lerach’s former law firm paid people to sign on as plaintiffs in more than 150 lawsuits against major corporations including AT&T, Lucent Technologies and WorldCom.

Prosecutors say the firm netted more than $200 million in fees over 20 years.

Mr. Lerach agreed to plead guilty to conspiring to obstruct justice and making false statements under oath, according to the U.S. attorney’s office in Los Angeles.

He will forfeit $7.75 million to the government, pay a $250,000 fine and accept a sentence ranging from one year to two years in federal prison, prosecutors said.

An arraignment will be held at a later date.

“I have always fought for my clients aggressively and vigorously in order to hold powerful corporations responsible when their actions harmed people, however, I regrettably crossed a line and pushed too far,” Mr. Lerach said. “For my actions, I apologize and accept full responsibility for my conduct.”

The case against Mr. Lerach is part of a continuing federal probe that led to last year’s indictment against New York law firm Milberg Weiss Bershad & Schulman and two of its partners.

Prosecutors accused the firm of secretly paying more than $11 million in kickbacks to get people to take part in shareholder lawsuits, allowing its lawyers to be among the first to file litigation on behalf of shareholders and secure the lucrative position as lead plaintiffs’ counsel.

Mr. Lerach and the firm’s co-founder Melvyn Weiss weren’t named in the 20-count indictment claiming the firm paid clients kickbacks, so it could become the leader in class-action litigation and therefore win a larger share of legal fees.

Mr. Weiss has not been charged.

The firm now known as Milberg Weiss and a former partner, Stephen Schulman, pleaded not guilty to fraud and conspiracy charges. The trial is scheduled for January.

Another former partner, David Bershad, pleaded guilty to conspiracy in July and will be sentenced early next year. Former physician Steven G. Cooperman also pleaded to a federal conspiracy charge for his role in the reputed kickback scheme.

Mr. Lerach, 61, and Mr. Weiss targeted some of the nation’s largest companies in litigation, including AT&T, Lucent, WorldCom, Sears Roebuck, Microsoft, Prudential Insurance and Lincoln Savings & Loan.

When he formed his own firm in San Diego, Mr. Lerach took much of the Milberg Weiss securities litigation with him, including shareholder suits against Enron.

Mr. Lerach resigned last month from the firm now known as Coughlin Stoia Geller Rudman & Robbins.

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