Legal News

Expert?s Plea Brings Out . . . . Another Lawyer!

By Dan Slater

That was quick.

Yesterday, we blogged on a WSJ story reporting that the plea agreement of former expert witness John Torkelsen — who agreed to plead guilty to perjury for lying to a federal court — cited several instances where he, with the knowledge of the plaintiffs law firm he was working with, submitted to federal courts inflated bills for his services. The plea papers say the firm was a New York firm which, a person familiar with the matter says, was what is now known as Milberg Weiss. (See the documents here and here.)

Fairly predictable, perhaps, but now a defense lawyer — Towle Denison’s Martin Washton, formerly of Gibson Dunn — who helped craft a securities class action settlement in 2000, is disputing the validity of Torkelsen’s fees. Here’s the NLJ story.

“What they were doing was falsifying claims to reimbursement so as to further take money out of the settlement that then wasn’t available for distribution of the class,” said Washton. That behavior, he added, “calls into question whether or not their damages analysis was correct, since the damages analysis was performed by Torkelsen without disclosing that he was biased.”

In the plea deal, prosecutors allege that the law firms that retained Torkelsen told the court that Torkelsen was working as an independent expert, when, in fact, he was being paid on a contingency basis. The firms would hide his contingency status by requesting reimbursement for fees that were never paid to Torkelsen in order to make up for other cases in which he had not been paid.

In Washton’s case, according to Torkelsen’s plea agreement, the “New York Law Firm” — said to be Milberg — falsely told the court that it had paid Torkelsen $146,223.97 in expert fees. The settlement in the case, in which Washton represented the former owner of the Stratosphere hotel and casino in Las Vegas, was about $10 million. Washton reportedly acknowledged the limitations in vacating a settlement, and that re-opening the case would involve “a considerable amount of money,” but he left both options open.

Full post as published by Law Blog - WSJ.com on March 07, 2008 (boomark / email).