Posted Jun 28, 2007 09:14 pm CDT
Updated: Famed plaintiff securities lawyers Melvin Weiss and William Lerach reportedly have said no deal to a plea deal offered by federal prosecutors in a criminal kickbacks case against the New York City law firm Weiss founded and two partners there.
The rejected plea deal, offered weeks ago in the fraud and obstruction of justice case, would have imposed several-year prison terms on Weiss and Lerach, according to Reuters, which cites a report in the Daily Journal, a Los Angeles legal newspaper, that relies on unnamed sources.
Neither Weiss nor Lerach has been charged, and Reuters could not reach their lawyers for comment. Lerach formerly headed the West Coast operations of Milberg Weiss & Bershad, before forming his own firm. He recently decided to retire, as Fortune reported May 30.
Milberg Weiss and two of its senior partners, David J. Bershad and Steven G. Schulman, were indicted last year for allegedly paying more than $11 million in secret kickbacks to class-action plaintiffs, in a claimed effort to win desired lead counsel status and control the litigation. The firm and both partners have pleaded not guilty, and a trial is not expected to begin before next year. The case has been controversial, particularly because it potentially destroys an entire law firm for misconduct allegedly committed by only a few of its attorneys, as the ABA Journal reported in a December 2006 cover story. Currently, Bershad is on a leave of absence and Schulman is no longer with Milberg Weiss.
Plea discussions with Weiss and Lerach were sparked, the Daily Journal (sub. req.) says, by the cooperation of Bershad, a former managing partner of Milberg Weiss. Prosecutors recently met with Bershad’s attorney, Cristina Arguedas, who practices in Berkeley, and Bershad “is close to signing an agreement that will remove the threat of prison time,” the newspaper writes, citing unnamed lawyers and saying that Arguedas did not comment.
Benjamin Brafman, a New York attorney who represents Weiss, spoke with the Daily Journal and refused to confirm or deny that Weiss rejected a plea offer. “I don’t want to really go into any discussion of what [prosecutors] have or have not done,” Brafman told the newspaper. “I don’t want to go there.”
John Keker, a San Francisco who represents Lerach, declined to comment, and Weiss and Lerach did not return the Daily Journal’s phone calls.
Originally posted 12:46 p.m.