[MSN] Former Lead Plaintiff's Guilty Plea May Spell Trouble for Lawyer Lerach

[Museum Security Network Mailinglist]

Former Lead Plaintiff's Guilty Plea May Spell Trouble for Lawyer Lerach

Matthew Hirsch
The Recorder
February 1, 2007
Printer-friendly Email this Article Reprints & Permissions
 

Superstar plaintiffs lawyer William Lerach has remained outside the reach of
investigators looking at a kickback scheme at his former firm, Milberg
Weiss, but a guilty plea in the case on Wednesday might change that.

Steven Cooperman, a former ophthalmologist previously convicted of insurance
fraud, admitted to taking payments for serving as lead plaintiff in class
actions filed by Milberg Weiss over 12 years.

Court documents filed Wednesday detail Cooperman's role and also appear to
put "Partner B," long believed to be Lerach, at the heart of the lucrative
kickback scheme.

Though the charging documents don't identify Lerach by name, one source
close to the investigation said Wednesday, "If you look at it, there's an
awful lot of facts in there about Bill Lerach."

That Cooperman has helped prosecutors build their case against Milberg Weiss
is nothing new. He has been cooperating since its beginning. In fact, he's
the one who first told prosecutors about the kickbacks and fingered Lerach.

The problem for the U.S. Attorney's Office has been that Cooperman has a
major credibility problem. He offered to cooperate in the Milberg
investigation only after he was convicted and sent to prison for
orchestrating an insurance scam by claiming some fine art in his Beverly
Hills home had been stolen. Because of his past, anything Cooperman could
say in trial about Lerach, or anyone else linked to Milberg Weiss, could
look like an attempt to escape another stint in the slammer.

But on Wednesday, Cooperman's credibility may have become less of a problem.
His plea -- to conspiring with Milberg Weiss and several of its senior
partners to obstruct justice and make false statements in class actions --
shows that he's not cutting a deal to get off entirely scot-free.

With the plea, he faces up to five years in prison, with three years of
supervised release, plus a fine of either $250,000 or twice the amount he
gained in the Milberg scheme.

Generally, a plea deal by a witness with baggage can help the government,
but only if prosecutors can independently corroborate the testimony, said
Jeffrey Bornstein, a former Assistant U.S. Attorney.

"Why should a jury believe a witness who admits as part of his guilty plea
that he lies under oath in other proceedings?" said Bornstein, a partner at
Kirkpatrick & Lockhart Preston Gates Ellis.

While Cooperman's credibility may remain questionable, the detailed
allegations introduced Wednesday in a 50-page charging document in U.S. v.
Cooperman, CR 06-776(A), suggest prosecutors are closing in on Lerach.

Court documents filed in the U.S. District Court for the Central District of
California Wednesday are rife with details about the role "Partner B" played
in the alleged kickback scheme at Milberg Weiss. Among other things,
prosecutors claim that "Partner B" directly paid Cooperman in cash to
conceal the scheme.

Neither Lerach, of Lerach Coughlin Stoia Geller Rudman & Robbins, nor his
attorney, John Keker of Keker & Van Nest, returned calls on Wednesday.

COOPERMAN COOPERATES

Cooperman first agreed to cooperate with federal prosecutors in August 2000
after he was found guilty of 18 federal charges in the insurance fraud case.
But, while serving time for the insurance fraud convictions, Cooperman
committed unspecified "additional crimes" that breached his cooperation
agreement with prosecutors, according to a release from the Central District
U.S. Attorney's Office.

Cooperman's attorney, Russell Gioiella, of New York's Litman, Asche &
Gioiella, confirmed Wednesday that his client was nailed by prosecutors for
forging his doctors' signatures on health insurance forms while in prison
for the fraud convictions.

"It was an error in judgment, but he didn't intend to or cause any financial
harm to anyone," Gioiella said.

Though Cooperman's guilty plea has no explicit cooperation provision,
Gioiella said his client will continue to cooperate if asked by prosecutors.

"He's been 100 percent truthful with the government as to Milberg Weiss,"
Gioiella said. "Nothing has changed in that respect."

Not everyone agrees that Cooperman's plea deal helps federal prosecutors in
their case against Milberg.

Joseph Russoniello, who was a U.S. Attorney for eight years until 1990, said
the deal might just cause more problems for the government.

"It's kind of a two-edged sword in many ways," said Cooley Godward Kronish's
Russoniello. "The conviction puts the onus on a cooperating defendant to be
very open, forthcoming and obviously honest, because any perjury or false
statements can significantly jeopardize how the court would view [his]
cooperation.

"What it does do," he continued, "is it may remove one incentive to give
false testimony -- that is, to avoid prosecution -- and substitute a second
motive or bias, which is to avoid a long jail term."

Cooperman isn't the first former lead plaintiff tied to Milberg Weiss to
plead guilty in the conspiracy probe. Howard Vogel, a retired mortgage
broker from Florida, entered a guilty plea last April, just one month before
federal prosecutors in Los Angeles indicted the Milberg firm and partner
David Bershad and former partner Steven Shulman. 

http://www.law.com/