Former Milberg Plaintiff to Plead Guilty in Probe

By Edvard Pettersson
Bloomberg.com
January 31, 2007

 

A former eye doctor agreed to plead guilty to taking more than $6.4 million in secret payments from New York law firm Milberg Weiss & Bershad in exchange for serving as the lead plaintiff in class-actions, prosecutors said.

Steven Cooperman, 64, of Fairfield, Connecticut, some of his relatives and associates served as named plaintiffs in about 70 securities-fraud class-actions and other shareholder suits, the U.S. Attorney's Office in Los Angeles said today in a statement. Milberg Weiss earned more than $133 million in fees from the suits, the statement said.

Milberg Weiss and two of its partners, David Bershad and Steven Schulman, were indicted in May on charges they illegally paid clients to sue companies for securities fraud. The firm and the two men pleaded not guilty in July. Federal prosecutors have been investigating the firm for seven years, after Cooperman first informed them of the alleged payments in exchange for a more lenient sentence in an unrelated art-theft case.

``This new plea bargain demonstrates Mr. Cooperman's willingness to say anything for a shorter sentence and the government's willingness to urge him to do so,'' Milberg lawyer William Taylor said in an e-mailed statement.

Prosecutors didn't say whether Cooperman will testify against the defendants. Cooperman, scheduled to appear in Los Angeles federal court April 2, is a former ophthalmologist who previously lived in Brentwood, California, court documents show.

Cooperation

``The fact that it isn't spelled out in the plea agreement that he will cooperate doesn't necessarily mean that he won't cooperate,'' said Laurie Levenson, a professor at Loyola Law School in Los Angeles. ``I don't know how much his cooperation will be worth given his prior criminal history.''

Cooperman has cooperated with the Milberg Weiss investigation in the past on the condition he wouldn't be prosecuted for his role, Assistant U.S. Attorney Richard Robinson said. Since Cooperman committed additional crimes while serving a prison sentence, that cooperation deal was invalidated, he said.

Robinson declined to comment on whether Cooperman is still cooperating.

Russell Gioiella, a lawyer for Cooperman, didn't return a call seeking comment.

Losing Partners

Milberg Weiss has been losing partners and closing offices since the firm was indicted. Earlier this month, the two partners who headed its antitrust practice left for another firm. Their departure followed that of Schulman, one of the two partners indicted in the kickback investigation.

In December, a federal judge removed Milberg Weiss as the lead counsel in an antitrust case against carmakers.

The law firm closed its Washington office in July when the partner there, Reuben Guttman, left to open a Washington office for New York's Wolf Haldenstein Adler Freeman & Herz. The firm also said in July that it would close its Boca Raton, Florida office.

The case is U.S. v. Milberg Weiss Bershad & Schulman, U.S. District Court, Central District of California, 05-CR-587.

[ RGM Short Selling Home page ]