Milberg Partner Pleads Guilty to Kickback Scheme

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David Bershad, once a top partner at the Milberg, Weiss, and Bershad law firm, has pleaded guilty to participating in a kickback scheme. He will forfeit millions of dollars and cooperate with prosecutors. The law firm is one of the busiest when it comes to suing corporations on behalf of investors.

JOHN YDSTIE, host:

A former partner in one of the nation's most powerful law firms has pleaded guilty to conspiracy. Prosecutors say the lawyer and his firm paid illegal kickbacks to clients in class action lawsuits.

NPR's Scott Horsley reports.

SCOTT HORSLEY: The Milberg, Weiss, and Bershad law firm is one of the busiest in the country when it comes to suing corporations on behalf of money-losing investors. Over the last two decades, the firm's collected more than $200 million in legal fees for representing clients who claim to be victims of corporate fraud.

Federal prosecutors say one reason the law firm was able to file so many suits so quickly was that it paid secret and illegal kickbacks to people who agree to serve as lead plaintiffs. Some of the payments were made in cash, others through third parties disguised as professional fees.

Prosecutors say at least seven Milberg Weiss partners agreed to the scheme. But so far only two had been named. One of those, David Bershad, pleaded guilty yesterday and agreed to forfeit nearly $8 million.

Bershad also agreed to cooperate in the ongoing investigation. Then court documents suggest he could be a damaging witness. He was the senior partner who oversaw Milberg Weiss's financial affairs, and cash for the alleged kickbacks was collected in Bershad's own office.

One prominent partner, Bill Lerach, left Milberg Weiss three years ago to start his own law firm in San Diego, but he continues to be dogged by the investigation. Both his firm and Milberg, Weiss said yesterday their work will not be affected by the government's probe.

Scott Horsley, NPR News, San Diego.

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