Posted on 06/07/2006 5:46:14 AM PDT by Liz
Investors whom indicted class-action law firm Milberg Weiss paid to sue some of America's biggest companies were willing patsies who snapped up stocks the firm targeted as ripe for a fall, according to an attorney who worked with the firm. Milberg, in hot water with federal authorities for allegedly paying an investor $2.4 million to act as a plaintiff in dozens of lawsuits, actively coordinated its efforts to invest in companies that were likely to have a major stock-price decline.
When these companies reported an operational or financial decline, this allowed Milberg to have a willing plaintiff for an initial claim within hours of the event.
The serial plaintiff, retired mortgage broker Howard Vogel, was lead or co-lead plaintiff in more than 40 class-action lawsuits through 2005. Vogel is alleged to have broken the law by taking payment from two Milberg partners, since indicted.
One class-action lawyer who worked with Milberg on three suits over the past decade....."One [Milberg] lawyer told me that they tracked companies with a history of heavy debt loads, bad management and the like. He said that they had a network of 'pigeons' owning these shares."
(Excerpt) Read more at nypost.com ...
ping
We shouldn't be surprised if this is true. It's a natural and almost clever extension of ambulance chasing.
No argument there, but I would change your characterization just slightly by saying thiat it's a natural and inevitable extension of shareholder lawsuits. "Your stock went down so we're suing you."
BACKSTORY: FEDS TARGET LEGAL EAGLES By RODDY BOYD May 6, 2006
Capping a five-year investigation, two of its name partners, Steven Schulman and David Bershad, are allegedly complicit in a multi-year scheme to direct kickbacks to a California mortgage broker who acted as a plaintiff in dozens of class action suits against publicly traded companies.
The mortgage broker, Howard Vogel, pleaded guilty to taking $2.4 million in kickbacks from Schulman and Bershad for letting family members act as plaintiffs in 40 separate class action suits from 1991-2005.
As a plaintiff under the 1995 securities reform act, Vogel and other plaintiffs had to declare that they were not paid to file suit (filed fraudulent official documents).
The firm had previously insisted that any fees paid to Vogel and other plaintiffs were so-called "finder's fees." Not named in the suit was firm chief Melvyn Weiss, or his longtime law partner, San Diego-based William Lerach.
http://www.nypost.com/business/68094.htm
Many Democrats Received Funds From Law Firm Targeted By Grand Jury: Partners and staff of renegade law firm Milberg Weiss, under investigation by federal prosecutors, have been major contributors to a number of Democratic
candidates. If guilty, that means money earned fraudulently by the law firm flowed directly to those candidates’ campaigns. We believe Independent Sources is first with this story of the links between the troubled law firm and key Democrats. In a post yesterday, Fraud-Tainted Law Firm Is #1 Source of Law Biz Contributions
To Barbara Boxer, we wrote about the expanding federal criminal probe of Milberg Weiss. According to published reports, three former partners of the firm, notorious for its shareholder class action suits against companies with falling stock prices, face indictment for conspiracy. But Boxer is only the sixth largest recipient of funds tainted by the firm’s illicit activities. Senator Charles Schumer (D-NY) is #1, receiving over $50k from the firm and / or its affiliates during the 2001-2004election cycles. John Kerry and John Edwards are high on the list as well. Here are the top 15:
Rank Contribution Contributor
1 $50,750 Schumer, Charles E
2 $50,000 Democratic Senatorial Campaign Cmte
3 $41,900 Kerry, John
4 $37,500 DNC Services Corp
5 $32,250 Edwards, John
6 $31,500 Boxer, Barbara
7 $28,315 Democratic Congressional Campaign Cmte (plus #10?)
8 $26,000 Nelson, Bill
9 $20,400 Blue, Daniel Jr
10 $20,000 DCCC/Non-Federal Account 5 (same as #7?)
11 $20,000 Democratic Executive Cmte of Florida
12 $17,500 Gephardt, Richard A
13 $15,250 Feingold, Russell D
14 $15,000 Biden, Joseph R Jr
15 $14,999 New Jersey Democratic State Cmte
Source: Independent Sources analysis of data from OpenSecrets.org. You can download a detailed spreadsheet we made by right-clicking on these words and choosing “save file to desktop” or the equivalent. If the firm commited fraud, or worse, in the process of collecting its fees, then distributed those ill-gotten gains to the firm’s partners (or employees, as bonuses), any contributions they made are tainted. We ask Senator Schumer et al the same question we want Barbara Boxer to answer: if Milberg Weiss or any of its partners are indicted, will they return the tainted contributions? Or better yet, get them back to the shareholders of the companies Milberg Weiss shook down?
SOURCE: http://independentsources.com/2005/08/16/milberg-weiss-2-democratic-contributions/
Of course, merely identifying such companies did Milberg no good. They needed a stockholder who was willing to step forward and be a plaintiff. So, the scheme that is described in this article is perfectly plausible -- pay a co-conspirator under the table to invest in the identified companies so that as soon as the detritus hits the fan, they have a plaintiff ready to go.
If you wanted to analogize this to the more traditional ambulance chaser arena, picture a plaintiffs lawyer who hires someone to go out in a car and come to an abrupt stop the second any traffic light turns yellow. Inevitably this driver will be rear-ended, and, bingo, the lawyer has a plaintiff.
The web site INSURANCEFRAUD.COM CHRONICLED STAGED ACCIDENTS AND OTHER RUSSIAN CRIMINAL FRAUDS.
Russian gangs are the kingpins of staged auto accidents in New York City, investigators say. Russians have amassed a monopoly that has cost auto insurers up to $500 million (that means we pay more). Eight large Russian rings have been busted over the last three years. The kingpins paid cocaine-addled drivers----Mexican illegals helped over the border by drug cartels---- as little as $200 each to crash cars into hundreds of innocent drivers on busy roads.
Often the crooked drivers targeted elderly motorists, or drivers who were distracted while using cell phones. The Russians removed the bulbs from their rear brake lights, darted in front of the target car, put the cars in neutral and then slammed on the brakes, according to an FBI investigation dubbed Operation Allcons.
Russians created as many as 1,000 phony medical clinics to treat fake injuries of passengers who rode with the crashers. Russian mobsters forced some passengers to get succesive treatments they didn’t need for months and months. One Russian-operated law firm in Brooklyn signed up 3,000 clients from staged accidents, generating up to $30 million in bogus medical claims. Medicare was ripped off to the tune of hundreds of millions of dollars, which law-abiding citizens pay for; and also pay more for auto insurance b/c of these scams.
A FReeper posted she was involved in a "staged accident" with Mexicans, and while doing the interview with her insurance company, he toldher that illegal Mehicans have lawyers who advertise in the Spanish newspapers here explaining what to do IF they get into an accident and what they can expect to get. But what they are really doing is giving them instructions on how to make some quick money.
The staged accident scam is a huge con game---crooked Russians have perfected "stoop and squat" staged auto accidents. They and crooked doctors and lawyers reap billions from it---ripping off auto insurance companies, Medicare, etc.
Russian criminals are hiring illegals to participate in their billion dollar frauds---staged auto accidents, Medicare/Aid fraud, insurance fraud, ID theft, securities fraud......you name the crooked activity and they are involved.
Using phony SS#'s, forged documents, and multiple IDs the invaders collect multiple $4500-$5400 EICs from the IRS by declaring several names/jobs - just by going $1 over the income limit. They also line up for EINs, ITINs, Child Tax Credit, Additional Child Tax Credit, welfare and food stamps. Taxpayers are subsidizing invaders' daily food intake, housing, reduced mortgages, free medical care, free education, reduced in-state tuition and out of state tuition. We also foot the legal bills when they start suing if we don't provide these goodies pronto......etc., etc, ad infinitum, ad nauseaum.
Ask your Congressman or US Senator to give you the informaton from GAO reports, Congressional Record articles, and the like, that have statistics on Russian and Mexican immigration, and lists the benefits allotted under so-called "political asylum" laws. And tell them the Russian and Mexican gravy train must be stopped, once and for all.
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