Milberg Weiss partner agrees to plead guilty
By Edvard Pettersson, Bloomberg News
Tuesday, July 10, 2007
Los Angeles - Milberg Weiss & Bershad partner David Bershad
agreed to plead guilty to charges related to a scheme to pay
illegal kickbacks to plaintiffs in securities lawsuits, the
Justice Department said in an e-mailed statement Monday.
Bershad, 67, who is on leave from the firm, was indicted last
year by a grand jury with former partner Steven Schulman and the
law firm for making "secret and illegal payments" in cases for
which the firm was paid $216 million.
"This will shake up the investigation," said Laurie Levenson, a
professor at Loyola Law School in Los Angeles and a former
federal prosecutor. "He certainly is an insider, and he may be
exactly what the prosecution needs."
Milberg Weiss, which has recovered more than $45 billion for
investors in securities- fraud litigation, was once the biggest
U.S. investor class-action law firm.
For more than seven years, prosecutors have been probing whether
its lawyers paid kickbacks to clients in exchange for their
signing on to lawsuits.
"I'm not going to say anything," Bershad said when asked about a
possible plea deal.
The law firm and Schulman, 56, who quit in December, denied the
The Daily Journal, a Los Angeles legal newspaper, reported June
28 that Milberg Weiss partner Melvyn Weiss and William Lerach, a
former partner who left in 2004 to form a San Diego law firm,
rejected plea agreements that would have required they serve as
much as four years in prison.
Weiss and Lerach haven't been indicted. They are referred to in
court papers detailing the alleged scheme only as Partner A and
According to the indictment, between 1983 and 2005, Bershad
owned between 10 percent and 18 percent of the firm and his
share of Milberg Weiss' profits totaled about $160.9 million.