Monday, July 9, 2007
What had been rumored for a few weeks has finally come to pass -- former Milberg Weiss name partner David Bershad entered into a plea agreement with federal prosecutors and will cooperate in the investigation of the firm. According to a press release (available below) issued by the U.S. Attorney's Office for the Central District of California, Bershad will plead guilty to one count of conspiracy. The plea agreement requires him to forfeit $7.75 million and pay a $250,000 fine. The plea agreement (available below) puts the Sentencing Guidelines range at 27-33 months, but there is also a 5K1.1 provision allowing the government to move for a lower sentence based on Bershad's cooperation.
With Bershad's guilty plea, the law firm is likely to be the next defendant to settle because it has no real defense to the charges now that one of its partners admitted guilt. The key issue is whether former Milberg Weiss leaders Melvyn Weiss and William Lerach will be charged. The statement of facts (available below) filed with the plea agreement refers to Milberg Weiss partners A, B, E, F, and G being involved in the payments to class action plaintiffs -- presumably Bershad and co-defendant Steven Schulman were C and D on that list. Whether Weiss and Lerach are among the unidentified partners remains to be seen, but they are certainly targets of the investigation. Bershad played a major role in the firm's finances, and has extensive knowledge of how payments were structured and the involvement of other partners in the firm's class action cases. His cooperation may well be a key turning point in the case. (ph)