Lerach Gets Two Years for Kickback Scheme

Bill Lerach was sentenced Feb. 11 to two years in federal prison for his role in an alleged kickback scheme at his former firm. Lerach, as a partner in plaintiffs' firm Milberg Weiss, made a name for himself representing defrauded shareholders in high-profile class actions, notably leading Enron shareholders to a $7 billion judgment against the former energy giant.

Prosecutors say Lerach participated in Milberg Weiss' scheme to pay roughly $11.3 million in kickbacks to people so they would become plaintiffs in class actions against companies like WorldCom, Microsoft and AT&T.

Lerach left Milberg Weiss in 2004 to found his own firm, now known as Coughlin Stoia Geller Rudman & Robbins. He resigned from that firm in October 2007, just days before pleading guilty to one count of conspiracy. As part of a plea deal, Lerach agreed to forfeit $7.75 million to the government.

In recent weeks, Lerach's lawyers requested that letters from supporters asking for clemency be sealed from the public. However, nearly all of the letters have been made public, revealing high-profile supporters such as Ralph Nader, Sen. Carl Levin [D-Mich] and Ben Stein. Lerach had requested six months in prison and six months of home confinement.

In addition to the two-year prison term, Lerach faces two years of probation, a $250,000 fine and 1,000 hours of community service.

Two other former Milberg Weiss partners, David Bershad and Steven Schulman, have pleaded guilty to fraud charges in connection with the scheme and await sentencing. A trial against the firm and its founding senior partner Melvyn Weiss is scheduled for August. Weiss is charged with orchestrating the scheme, which he denies.

Associate Editor

Melissa Maleske

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