Legal News

Former Milberg expert witness pleads guilty to perjury

By Jason Siegel

John B. Torkelsen, a former expert witness in hundreds of shareholder derivative and class action cases for Milberg Weiss, pleaded guilty on Thursday to perjury charges.

Torkelsen, who is serving a prison sentence in West Virginia on an unrelated charge, could face up to five more years in federal prison.

Torkelsen ran two companies, Princeton Venture Research Inc. and Equity Valuation Advisors Inc. From 1985 to 2003, he was retained by several law firms to provide expert testimony for plaintiffs on damages and settlements.

One of the firms that retained him was Milberg Weiss, now called Milberg, which, along with seven of its partners, was charged with generating $250 million in attorney fees by paying illegal kickbacks to name plaintiffs.

Under his plea agreement, which was reached earlier this year, Torkelsen admitted that he lied to a federal judge in San Jose, Calif., while testifying in a 1999 securities class action case.

Specifically, he told courts that he was an independent witness even though the law firms that hired him, including a "New York law firm," secretly paid him on a contingency basis. To maintain that secrecy, the firms would seek reimbursement for fees purportedly paid to Torkelsen. Torkelsen would write-off fees in unsuccessful class actions or request inflated fees for work he didn't actually do.

In all, Torkelsen charged class action law firms more than $60 million in bills from 1993 to 1996. More than $7 million of those fees were written off or inflated, of which $4 million involved the "New York law firm."

Sentencing is set for Aug. 5.

The plea deal was negotiated with federal prosecutors for the U.S. Attorney's Office in the Eastern District of Pennsylvania and the Central District of California.

-- Amanda Bronstad

Full post as published by Legal Pad | LA on May 02, 2008 (boomark / email).