Posted on 10/31/2006 8:43:50 AM PST by dighton
For decades, few things have inspired as much fear and loathing in the executive suites of corporate America as the law firm of Milberg Weiss and the two outsized personalities who ruled the place, Mel Weiss and Bill Lerach. Through creativity and ruthlessness, they transformed the humble securities class-action lawsuit into a deadly weapon.
Always, Milberg Weiss cast itself as the champion of the little guy. In media interviews Lerach has spoken evocatively about fighting for the honest, struggling blue-collar worker who, through no fault of his own, had lost his hard-earned savings to corporate perfidy. The firm boasts of having collected $45 billion for cheated investors since its founding in 1965.
But somewhere along the way, the work made its ruling partners a little like the CEOs they sued. In an especially profitable year, both Weiss and Lerach personally made more than $16 million. Weiss, 71, is a high roller at casinos who collects Picassos, owns a five-acre waterfront estate on Oyster Bay, Long Island, and has a vacation condo in Boca Raton.
The Brillo-haired Lerach, 60, who bitterly split with Weiss in 2004, taking Milberg’s San Diego-based West Coast operation along with him in a new firm, owns a home in Rancho Santa Fe, Calif., and vacation properties in Steamboat Springs, Colo., and Hawaii. Lerach travels the country in a chartered jet, says his exercise is drinking Scotch, and will be married this month for the fourth time, to a partner at his firm.
Weiss and Lerach have also found themselves in the cross hairs of federal prosecutors. In the most extraordinary federal case now afoot in the land, Milberg Weiss has been indicted for allegedly paying three plaintiffs $11.4 million in illegal kickbacks in about 180 cases spanning 25 years - and then repeatedly lying about it to the courts.
The government says Milberg kept paying kickbacks into 2005, long after the firm knew it was under investigation. Name partners David Bershad, 66, and Steven Schulman, 55, have also been charged. (Both have pleaded not guilty, as has the firm.) The criminal probe has triggered an exodus of lawyers and clients. Once a veritable lawsuit factory - the firm averaged more than one new case a week during 2005 - Milberg has filed just a handful of suits in the five months since the bombshell landed.
And the feds are far from finished: Prosecutors have advised the presiding judge that there is “a significant chance” of a new indictment naming other defendants. Although both Weiss and Lerach insist they have done nothing illegal, the Justice Department has formally notified both that they are targets of the criminal probe. The two appear throughout the 102-page indictment as “Partner A” and “Partner B.”
Even as its empire crumbles, Milberg Weiss has fired back, belittling the government’s evidence, wrapping itself in legal principle, charging partisan politics by the trial-lawyer-hating Bush administration, and accusing the Justice Department of gross overreaching. But the truth is that Milberg Weiss is hemorrhaging from self-inflicted wounds: greed, hubris, lies, conflicts of interest, and shockingly poor governance - the very sort of venality and dysfunction that make for a juicy class-action lawsuit.
It makes for a wild yarn too - one with important implications for how our companies and courts do business. From a defrocked ophthalmologist with a taste for insurance scams to a retired speculator once known as Seymour the Head, Milberg Weiss’s downfall is an improbable saga of deceit and payback. Our story begins, as one law enforcement official puts it, “with a b**** slap.”
You know what they say about PAYBACK...
Couldn't happen to a nicer group. Thank you God!
One in nine lawyers faces the discipline board every year. The most common reason is stealing clients' money (from escrows, by commingling funds, etc). The discipline boards are run by lawyers and very, very rarely exact any meaningful punishment. (It's true that some lawyers never face the board and some are back there dozens of times... which itself speaks for the profession's standards).
While we're talking about standards, literally hundreds of members of the Bar in my state got their law degrees while in prison on felony charges, up to and including child rape and murder. (My tax dollars in dubious action). None of those characters has ever been denied admittance to the bar. Heck, they probably raised the moral standard of that unclean institution.
d.o.l.
Criminal Number 18F
Never did have much use for these guys...
What a story. Pride before the fall...
Talk about product placement.
I hope they make an example of these dung heaps. The "disgorgement" part will be especially pleasant for the greedy filth.
One law firm down, only a hundred thousand to go!
-ccm
Long and well worth reading. Will make a great book.
Loved Labib Labib, the Egyptian room service waiter who sued Weiss over the dog bite.
Thanks for posting.
Awesome article... worth reading the whole thing.
BTW, friends of the Clintons.
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