Prosecutors Recommend One Year of Probation for Milberg Kickback Defendant

Amanda Bronstad

The National Law Journal

Federal prosecutors in the criminal kickback case against securities firm Milberg are recommending that Richard Purtich, a Los Angeles lawyer who was one of the first to plead guilty in the case, be sentenced to one year of probation, according to a sentencing memorandum filed by the government last week.

In court papers, prosecutors cited his "substantial assistance to law enforcement in the investigation and prosecution of another person who committed an offense." Purtich, an insurance lawyer, is scheduled to be sentenced on Aug. 11.

In April 2006, he agreed to plead guilty to a tax charge, admitting that he failed to report to the IRS about $900,000 in payments he accepted from Milberg that he passed on to Steve Cooperman, a lead plaintiff in several of the firm's cases. The next month, federal prosecutors indicted the firm, then called Milberg Weiss, and two of its partners, David Bershad and Steve Schulman, alleging they obtained more than $200 million in attorney fees by paying kickbacks to lead plaintiffs in their cases.

Prosecutors claimed that Cooperman, who pleaded guilty to a federal conspiracy charge last year, frequently received payments from William Lerach, a former partner at Milberg who left in 2004 to start his own firm, now called Coughlin Stoia Geller Rudman & Robbins. Lerach pleaded guilty last year to a federal conspiracy charge and is serving a prison sentence of two years.

According to last week's sentencing memorandum, Purtich faced 21 to 27 months under the advisory sentencing guidelines.

Federal prosecutors recommended probation, without a prison sentence or home confinement, because Purtich cooperated in the case while his career as a successful lawyer floundered.

"Purtich was in the prime years of his career as a lawyer when, as a result of his offense conduct, he largely destroyed the professional success he had achieved," prosecutors said in the memorandum.

During his career, for example, Purtich, a "devoted husband and father," earned up to $700,000 per year. But in 2002, after the government's investigation became public, Purtich lost his job. In December 2006, after he pleaded guilty, the State Bar of California suspended his license to practice law. He now works as an "independent contractor paralegal," prosecutors said in the memo.

Prosecutors also noted that the kickbacks occurred several years ago.

Cooperman, or his relatives, served as lead plaintiffs for Milberg from 1988 to 1999. Purtich began working with him in 1992.

"Of course, Purtich's role as intermediary in the Milberg Weiss kickback scheme was also quite serious. However, as the Probation Office properly recognized, Purtich's conduct 'pales in comparison to the Milberg Weiss expansive scheme that involved a repeated fraud upon the Court system,'" prosecutors summarized. "With regard to the defendants sentenced to date, Melvyn Weiss, William Lerach, and Seymour Lazar, none of them cooperated with the government's investigation or prosecution. Each are clearly deserving of much harsher sentences than Purtich because of their central roles in the kickback scheme, including their obstruction of the courts." Weiss, co-founding partner of Milberg, pleaded guilty to a federal racketeering charge and is scheduled to begin serving a 30-month prison sentence next month. Lazar, a lead plaintiff in several Milberg cases, pleaded guilty to three counts, including obstruction of justice, and, given his ailing health, was sentenced to two years of probation, including six months of home detention.

For Purtich, federal prosecutors also recommended a $50,000 fine. The probation office had recommended a $200,000 fine.

Purtich's lawyer, William Genego, a partner at Santa Monica, Calif.-based Nasatir Hirsch Podberesky and Genego, did not return a call for comment.