Legal News

Former senior Milberg Weiss partner asks for no prison time in kickback case

By Jason Siegel

David Bershad, a former senior partner at Milberg Weiss, now called Milberg, is asking for no prison time as part of the government's kickback case against the law firm, even though the U.S. Probation Office is recommending 18 months, according to sentencing papers filed on Monday.

Federal prosecutors, who also filed sentencing papers on Monday, have asked a federal judge to give Bershad six months in prison.

In a plea deal reached last year, Bershad admitted to conspiring to obstruct justice and making false statements under oath. He also agreed to pay $7.75 million in forfeitures and a $250,000 fine.

He is scheduled to be sentenced on Oct. 27.

In court papers, federal prosecutors say the U.S. Probation Office recommendation does not take into account the assistance Bershad provided to the investigation, which resulted in charges against co-founding partner Melvyn Weiss and former partner William Lerach.

"Bershad gave the government the most complete view of the nature, scope, and history of the conspiracy that the government obtained from any source," prosecutors said in court papers. Specifically, the papers say, he identified paid plaintiffs in Florida and bonuses that were used to reimburse partners for their contributions to those kickbacks. He also provided information regarding Weiss's behavior during the government's investigation that lead to an obstruction of justice charge against him. As the "money man" at the firm, Bershad also provided critical information about how the kickbacks were made.

As a result, prosecutors recommend that he serve six months in prison, including three months of community confinement, followed by two years of supervised release and including a fine of $250,000.

A lawyer for Bershad, the first attorney at the firm to plead guilty, emphasized in court papers how her client broke with his senior colleagues, many of whom waited to plead guilty or declined to cooperate with the government's investigation.

"In the tragedy that was the Milberg Firm, many impressive men fell from power to disgrace," wrote Cristina Arguedas, a partner at Arguedas, Cassman & Headley in Berkeley, Calif. "Of these men, only David Bershad came forward to acknowledge unambiguously that he had lost his way and that he alone was responsible for his misconduct."

His assistance was "the critical development" that resulted in the investigation's end, she said. In the months after Bershad pleaded guilty, Weiss was indicted and Lerach negotiated his plea deal.

Twice divorced, with four children, Bershad also has donated generously to his own family members and to others. Attached to his sentencing memorandum are dozens of letters from his legal adversaries, fellow plaintiffs' attorneys and former partners and staff at the firm. Other letters come from family members and friends.

"After a great deal of soul searching, I realized that I had not only broken the law but my solemn oath to uphold it," Bershad wrote, in his own letter to U.S. District Judge John Walter of the Central District of California, who is overseeing the case. "My wrongful acts were in direct conflict with my own values of honesty and integrity."

Steve Schulman, who also is scheduled to be sentenced on Oct. 27, filed his own sentencing papers earlier this month.

Schulman, who argued he was not as involved in the firm's affairs as were Bershad, Lerach and Weiss, is asking for six months in prison. He said he is the primary financial support for his three young daughters.

In a letter to Walter, Schulman said: "I wish to express my profound remorse and contribution for the criminal conduct in which I engaged. I enlisted in a wrongful scheme, failed to disengage or extricate when I should have and participated in concealing the wrongful acts that facilitated the scheme. These were sins of omission no less than commission for which I take full responsibility. By these actions, I violated the law and my enhanced duties as an attorney."

Dozens of other letters were filed on his behalf.

Federal prosecutors are seeking a year in prison for Schulman, who pleaded guilty to one count of racketeering conspiracy and agreed to pay $1.85 million in forfeitures.

The U.S. Probation Office is recommending 15 months in prison.

Both Schulman and Bershad note that, as a result of the investigation, they surrendered their law licenses and have been sued by Milberg and other firm partners for millions of dollars, including their share of the $75 million settlement Milberg reached with prosecutors this year. Unlike Weiss and Lerach, who received financial settlements from their firms, Bershad and Schulman note that Milberg and its partners did not provide them with capital contributions, severance payments or reimbursement for legal representation.

-- Amanda Bronstad

Full post as published by Legal Pad | LA on October 22, 2008 (boomark / email).