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Lawyer sentenced in kickback scheme

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  • mojo_j_2000
    By JACOB ADELMAN, Associated Press Writer Mon Feb 11, 8:46 PM ET William Lerach, a former partner at a well-known New York law firm, was sentenced Monday to
    Message 1 of 1 , Feb 13, 2008
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      By JACOB ADELMAN, Associated Press Writer
      Mon Feb 11, 8:46 PM ET

      William Lerach, a former partner at a well-known New York law firm,
      was sentenced Monday to two years in federal prison for his role in a
      lucrative kickback scheme involving class-action lawsuits against
      some of the nation's biggest corporations.

      Lerach, 61, was also sentenced to two years probation and 1,000 hours
      of community service. He was ordered to forfeit $7.75 million and pay
      a $250,000 fine.

      "This whole conspiracy corrupted the law firm and it corrupted it in
      the most evil way," U.S. District Judge John Walter said during the

      Authorities said Lerach's former firm, now known as Milberg Weiss,
      made an estimated $250 million over two decades by filing legal
      actions on behalf of professional plaintiffs who received kickbacks.

      The firm paid $11.3 million in kickbacks to people who became
      plaintiffs in lawsuits targeting companies such as AT&T, Lucent,
      WorldCom, Microsoft and Prudential Insurance, prosecutors said.

      Seven people, including three former partners at the firm, have
      pleaded guilty in the case.

      Lerach, whose high-profile legal victories included a $7 billion
      judgment against now-defunct energy giant Enron Corp., pleaded guilty
      in October to one count of conspiracy to obstruct justice and make
      false statements.

      "I pleaded guilty in this case because I was guilty," Lerach said
      before sentencing. "It was, as they say, felony stupid."

      Lerach, who wore a dark suit, sat quietly with his fingers interlaced
      on a desk in front of him as the sentence was read. It was the
      maximum that Lerach had agreed to serve as part of a plea deal with

      Waltersaid he would have imposed a stiffer sentence on his own and
      considered rejecting the plea arrangement because of the gravity of
      Lerach's offense.

      He said Lerach subverted the authority of judges by misleading them
      and deprived legitimate class-action plaintiffs of their fair share
      of settlements from lawsuits.

      The judge said he ultimately decided to accept the deal out of
      deference to prosecutors and because he believed Lerach's most
      meaningful punishment was his disbarment.

      "The most significant fact is that Mr. Lerach is not going to be able
      to go into his office and practice law," Walter said. "Never again
      will he do something which he was obviously so good at."

      Walter ordered Lerach to begin his prison term in April.

      The first person to be sentenced in the case was Seymour Lazar, a
      retired attorney who was sentenced last month to six months home
      detention and two years probation. He also was fined $600,000.

      Federal prosecutors said Lazar, 80, was paid about $2.6 million to be
      a professional plaintiff and help the law firm, previously known as
      Milberg Weiss Bershad & Schulman, in its pursuit of the lawsuits.

      Lazar pleaded guilty in October to obstruction of justice,
      subscribing to a false tax return and making a false declaration to
      the court.

      The kickback scheme allowed the firm's attorneys to be among the
      first to file litigation and secure the lucrative position as lead
      plaintiffs' counsel, according to court documents.

      The firm dominated the industry in securities class-action lawsuits,
      which involve shareholders who claim they suffered losses because
      executives misled them about a company's financial condition.

      Along with Lerach, other former partners who have pleaded guilty were
      Steven Schulman and David Bershad.

      Schulman pleaded guilty to a racketeering conspiracy charge. He
      agreed to forfeit $1.85 million to the government and to pay a
      $250,000 fine.

      Bershad pleaded guilty to conspiracy and agreed to cooperate with the

      Firm co-founder Melvyn Weiss has pleaded not guilty to one count each
      of conspiracy, mail fraud, money laundering and obstruction of
      justice in a revised indictment.

      The Milberg Weiss firm itself has pleaded not guilty to two counts of
      conspiracy and one count each of obstruction of justice and making
      false statements
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