Class-action attorney Lerach agrees to plea deal over kickbacks

The San Francisco Chronicle reports:

Attorney William Lerach, once a titan among shareholder class-action lawyers who won billions in courtroom battles with companies such as Enron and was the bane of Silicon Valley's high-tech industry, has agreed to plead guilty to a federal conspiracy charge and admit deceiving the courts through a criminal kickback scheme.

Lerach, 61, acknowledged in a proposed plea agreement that he and other partners in his former firm Milberg Weiss made secret payments to plaintiffs in securities cases, the U.S. Attorney in Los Angeles announced Tuesday. According to wider charges filed by prosecutors against other defendants, the law firm concealed millions in such payments in more than 150 lawsuits during a period roughly from 1981 to 2002.

The Milberg Weiss firm dominated the field of shareholder suits, often by beating other law firms to the courthouse to file the first action against a company accused of fraud or other unlawful conduct affecting stockholders. The swift filings often qualified Lerach's firm as lead counsel in consolidated class actions - a lucrative prime mover advantage that increased its share of attorneys' fees. Federal prosecutors claim Milberg Weiss maintained a stable of individuals who were willing to serve as plaintiffs in multiple suits in exchange for secret payments.

Lerach's plea agreement marks the downfall of "one of the giants of the field," said Stanford Law School Professor Joseph Grundfest, a former commissioner of the Securities and Exchange Commission and founder of the Stanford Securities Class Action Clearinghouse. Lerach was one of the major record-holders in terms of the size and number of cases brought, and the amounts recovered for shareholders, he said.

"All of these records will now go under the books with an asterisk," Grundfest said.

If a judge accepts the plea deal, Lerach would plead guilty to a single felony count of conspiring to obstruct justice and to make false statements under oath. He would accept a sentence of one to two years in federal prison, forfeit $7.75 million to the government and pay a $250,000 fine. No date has been set for his arraignment.

Lerach cuts himself a decent deal.No word yet from John Edwards on this one.