Monday, November 7, 2005
John Torkelsen worked extensively as an expert witness in class action suits brought by the Milberg Weiss firm, and his recent guilty plea to fraud charges has raised questions whether he will cooperate in the government's investigation of the firm's lawyers for making secret payments to named plaintiffs and perhaps others. Torkelsen pled guilty to making a false statement to the Small Business Administration in connection with a loan application, and prosecutors agreed to recommend a 70-month sentence. An article in The Recorder (available on Law.Com here) indicates that there is no specific reference to Torkelsen cooperating in any federal investigations, but that does not necessarily exclude the possibility that he will cooperate in the probe by a Los Angeles grand jury into the conduct of Milberg Weiss and one of its former partners, William Lerach, who split off from the firm in 2004. Torkelsen's plea hearing before U.S. District Judge Reggie Walton took place right before the arraignment of I. Lewis Libby in the same courtroom.
One indictment has already been returned in the case, naming a former named plaintiff in a number of Milberg Weiss cases who allegedly received undisclosed payments. None of the cases were filed after the mid-1990s, however, when Congress changed the procedures for appointment of the lead plaintiff and primary counsel in federal securities law class actions in the Private Securities Litigation Reform Act. If Torkelsen is cooperating, his contribution will have to come quickly because the statute of limitations is ticking away, unless the government has already obtained an indictment and it has been sealed for some reason. (ph)