FEDS TARGET LEGAL EAGLES (kickback scheme to file suit)

May 6, 2006 — The class action law firm of Milberg, Weiss, Bershad & Schulman is bracing for the ultimate nuisance suit: The federal criminal indictment of two of its name partners, according to published reports.

Steven Schulman and David Bershad are likely to be indicted “In the coming days and weeks,” according to CNBC.

Capping a five-year investigation, the pair is allegedly complicit in a multi-year scheme to direct kickbacks to a California mortgage broker who acted as a plaintiff in dozens of class action suits against publicly traded companies.

Also, the report gave “a 50-50 chance” of the firm being indicted, a move almost certain to prove fatal to its lucrative class action franchise.

The mortgage broker, Howard Vogel, pleaded guilty last week to taking $2.4 million in kickbacks from Schulman and Bershad for letting family members act as plaintiffs in 40 separate class action suits from 1991-2005.

As a plaintiff under the 1995 securities reform act, Vogel and other plaintiffs had to declare that they were not paid to file suit.

The firm had previously insisted that any fees paid to Vogel and other plaintiffs were so-called “finder’s fees.”

Not named in the suit was firm chief Melvyn Weiss, or his longtime law partner, San Diego-based William Lerach. According to reports, earlier this year, the Los Angeles- based federal prosecutors spearheading the investigation determined that Vogel dealt exclusively with Schulman and Bershad.

A Milberg, Weiss spokeswoman declined comment.

Weitz & Luxenberg, P.C.
Sheldon Silver, Of Counsel
Address: 180 Maiden Lane
New York, NY 10038-4925

Phone: (212) 558-5500
Toll-free (800) 476-6070
Fax: (212) 344-5461

April 29, 2006

POST First guilty plea in Milberg Weiss investigation Howard Vogel has pled guilty to perjury for falsely representing he hadn’t been paid kickbacks to serve as a lead plaintiff in securities class action litigation; his plea agreement acknowledges receiving $2.5 million from “a New York law firm.” Vogel and family members were Milberg Weiss’s clients and lead plaintiff in forty securities class actions, and the firm confirms to the Times that it’s the one in the agreement.

According to Vogel, kickbacks were funneled through an intermediary law firm or distributed with envelopes of cash (in which case the firm would pay him less because he could hide the cash from taxes).

LINKS TO ARTICLES AT SITE:
Nathan Koppel, “Ex-Client Ties Old Milberg Firm In Kickback Plea” Wall Street Journal, Apr. 29

Julie Creswell, “Case Turns Toward Law Firm”, New York Times, Apr. 29 (posted above)

My goodness Sheldon Silvers law firm…
There is much more to come..

Fraud-Tainted Law Firm Is #1 Source of Law Biz Contributions To Barbara Boxer

At the same time renegade law firm Milberg Weiss and its partners were raking in tens of millions of dollars allegedly conjuring fraud-tainted shareholder suits, they were using the proceeds to fund Senator Barbara Boxer’s 2004 re-election campaign.

The Center for Responsive Politic’s opensecrets.org website shows that for the 2004 election cycle, the firm Milberg Weiss and / or its partners and employees donated $31,500 to Boxer (D-Marin County) — making them her sixth largest contributor.

Milberg Weiss is infamous for shaking down companies with slumping stock prices, usually claiming that management misled shareholders.

But the Los Angeles Times noted “Its ability to find clients and launch class action lawsuits almost immediately — sometimes within hours of bad financial news — also had raised questions.” It now appears those questions will be answered by Federal prosecutors, who are far along in an investigation of whether Milberg Weiss illegally paid plaintiffs in suits brought by the firm.
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Update: Boxer is not the only Democrat tainted by Milberg Weiss’ ill-gotten contributions — Charles Schumer, John Edwards, and John Kerry, among others, also took money from the firm’s partners and affiliates. See our follow-up post here.

Update 2: For another embarrasing Boxer revelation, see our “Barbara Boxer’s Halliburton Connection”. We have an entire collection of posts about our least favorite Senator here.

Factoid: Milberg Weiss partners and employees made a total $429k in political contributions during the 2003-2004 cycle; we could not find a single Republican recipient.

More on California’s lightweight junior Senator here.

Birds of a feather, flock together….