Friday, June 29, 2007
The Los Angeles Daily Journal is reporting that prosecutors offered a plea deal to leading class action attorneys Melvyn Weiss and William Lerach related to allegedly illegal kickbacks paid to representative plaintiffs. The report also indicates that former Milberg Weiss name partner David Bershad is cooperating in the investigation of his former firm, which was indicted along with him and another firm partner in 2006. The investigation of the firm has been tortuous, to say the least, having lasted now since about 2000. At one point, Weiss and Lerach were identified as targets, but then in February 2006 the U.S. Attorney's Office in Los Angeles apparently notified them they were no longer targets (see earlier post here). Now they may be back on the list, and indeed much more than mere targets but the principle focus of the case. If Bershad does plead guilty, there is little the firm can do to fight the charges, and it may be in the interest of the remaining partners to end the prosecution with some type of settlement agreement.
One hang-up with the reported plea offer is that it would have required Weiss and Lerach to serve a term in prison, which neither is amenable to at this point. When prosecutors make plea offers this far into an investigation after securing the cooperation of another defendant, it may well be a sign that the government will move against the two lawyers in the near future. A Reuters story (here) discusses the Daily Journal report (which is available only by subscription). (ph)