Why Your Attorney Can’t “Give” You Money When You “Offer” Him Your Case
LOS ANGELES - On Monday, February 11, the Associated Press reported that a former partner at a prestigious New York law firm was sentenced 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.
He was also sentenced to two years probation, fined $250,000 and ordered to complete 1,000 hours of community service.
“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 hearing.
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.
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.”
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.
Tags: kickbacks, unethical lawyers