Legal News

Breaking News: Bill Lerach Gets Two Years in Prison

By Ashby Jones

Update: We’ve got more in store for Milberg Weiss watchers. Our dear Peter Lattman, ex-law-blogger who departed last week to cover private equity, in a legal-beat swan song interviewed Bill Lerach recently from his La Jolla, Calif. home. In a wide-ranging talk with Lattman, here, Lerach looks back at his career and the case, and ahead to prison and his life after it. See excerpts from the interview here. Thanks, Bill, and glad to have you in the house, Peter!

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This just in: Famed plaintiffs lawyer Bill Lerach received a two-year sentence today for his role in the alleged kickback scheme at Milberg Weiss. Lerach, 61, 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.

Lerach pleaded guilty last fall to a felony count of conspiring to obstruct justice and to submit false testimony in federal judicial proceedings.

To recap, prosecutors have claimed that Milberg shared legal fees with clients to induce them to quickly file securities class actions. Lerach has acknowledged making secret payments to former client Steven Cooperman. For an overview of the case and its players, click here.

Other indicted lawyers must still await their fate. Former Milberg partners David Bershad and Steven Schulman, who have pleaded guilty and are cooperating with the government, have yet to be sentenced. Melvyn Weiss, one of Milberg’s founders, has pleaded not guilty, as has the Milberg Weiss law firm. They have vowed to fight the charges.

Prosecutors had sought a a two-year prison term, but in a filing made Friday Lerach asked for six months in prison and six months of home confinement.

Here’s how a couple prominent folks are summing up the Lerach saga. First, T.J. Rodgers, the founder and chief executive of Cypress Semiconductor: “He’s getting what he deserves,” Mr. Rodgers said from a speaker phone on his floating desk in his outdoor hot tub overlooking his Silicon Valley vineyard. “I once likened Lerach to low life form, somewhat below pond scum. Thank goodness he’s met my highest expectations.”

On the flip side, here’s the take of Ralph Nader: “Given the corporate crimes that Mr. Lerach has brought to justice during his long career, his crimes pale by comparison. His success is partially a reflection of the repeated failure of government enforcement agencies to protect millions of defenseless investors from fraud.”

Law Blog readers, what do you think of the sentence? Too light? Too harsh? Perfecto?

Full post as published by Law Blog - WSJ.com on February 11, 2008 (boomark / email).