August 08, 2005

The W$J reports today:

Federal prosecutors have stepped up their criminal investigation of Milberg Weiss, the nation's largest class-action law firm, granting immunity to two former partners as they intensify their scrutiny of a third, prominent litigator William S. Lerach.

A grand jury in Los Angeles heard secret testimony three weeks ago from one of the former partners given immunity, Alan Schulman, lawyers close to the case said. Mr. Schulman's cooperation is a major development because he worked alongside Mr. Lerach, a former senior partner at Milberg Weiss and one of the nation's most prominent class-action lawyers....

Prosecutors have informed Mr. Lerach and two other former partners, David Bershad and Melvyn Weiss, that they could face indictment for conspiracy, according to lawyers close to the case. The government also is probing payments made by Milberg Weiss to a financial analyst who repeatedly served as an expert witness in the firm's cases [John B. Torkelsen of Princeton, N.J.], apparently taking the investigation in a new direction. Additionally, a new round of subpoenas has been sent to at least a half-dozen firms that were co-counsel with Milberg in securities class-action cases reaching back a decade or more.

Lerach and the Milberg firm deny all wrongdoing, and their defenders are likely to question the motives of Schulman, their former partner, by pointing out that he now works for the class-action firm of Bernstein Litowitz, which regularly competes with Milberg and Lerach for business. Tom Kirkendall also comments. Earlier coverage on this site; Overlawyered Jun. 27 and links from there, Jun. 28.