LOS ANGELES – William Lerach was sentenced Monday to two years in federal prison for conspiring to make secret payments to named plaintiffs in class-action and shareholder derivative lawsuits. In his guilty plea, Lerach agreed to forfeit $7.75 million to the government.
The sentence brings a harsh end to the career of the 61-year-old La Jolla resident who built his law firm into a national powerhouse. Lerach is one of three partners in the firm now known as Milberg Weiss who were charged with paying millions of dollars in secret kickbacks to clients who agreed to be named plaintiffs in more than 150 class-action and shareholder derivative lawsuits.
The firm made more than $250 million in legal fees from this in 20 years, the indictment states.
Lerach pleaded guilty to making the secret payments to named plaintiff Steven Cooperman. The cooperating plaintiffs were promised 10 percent of the firm’s legal fees in their cases; the payments were hidden from the courts, and the plaintiffs who got the kickbacks lied about it under oath, the U.S. Attorney’s Office said.
Former Milberg Weiss partners David Bershad and Steven Shulman have pleaded guilty to the same charges as Lerach, including conspiring to obstruct justices and to make false statements under oath.
Milberg Weiss partner Melvyn Weiss and Paul Selzer, an attorney charged with being a middleman for one of the paid plaintiffs, are scheduled to go to trial in August on federal racketeering charges.