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San Francisco-There may not be a literal platter involved, but federal prosecutors in the nation’s capital, who have spent five years struggling to indict former plaintiffs’ firm Milberg Weiss Bershad Hynes & Lerach and its partner William Lerach, have apparently produced a juicy head for their Los Angeles colleagues. That head belongs to John Torkelsen, a notoriously effective expert witness for Milberg Weiss-since split into two firms-in dozens of securities suits throughout the 1990s. He’s expected to plead guilty to reporting false information to a government agency in a Washington federal court on Oct. 21. The single count against Torkelsen was filed last month by Washington prosecutors and relates to a venture capital fund he managed-and funded in part with money from Lerach and other plaintiffs’ lawyers. In the past year, the U.S. Small Business Administration has filed civil suits accusing Torkelsen and his associates of using the fund to bilk the SBA out of millions of dollars. Reading the signals The criminal charge against Torkelsen follows a plea deal between the Washington prosecutors and Torkelsen’s wife on related charges that was unsealed earlier this year. While no plea agreement between Torkelsen and prosecutors has been made public, the way in which Torkelsen was charged-through a criminal information, which bypasses the grand jury process-is used when a plea deal is in place, say former federal prosecutors. “It typically signals that the two sides have worked out a guilty plea and the defendant has waived his right to be investigated by a grand jury,” said Patrick Robbins, a partner at New York-based Shearman & Sterling and a former San Francisco assistant U.S. attorney. Torkelsen’s lawyer, Ralph Caccia, a partner at Atlanta’s Powell Goldstein, did not return phone calls last week. A spokesman for the Washington U.S. attorney’s office said local court rules prohibit comments on pleas before they are filed. Lawyers with knowledge of the Torkelsen investigation say his long history of financial ties with Lerach and other plaintiffs’ lawyers, and the persistent accusation that he was paid illegally on a contingent basis-a charge Torkelsen seemed to acknowledge in a 1998 deposition-have made him a coveted witness for prosecutors. But until now, Torkelsen had never cooperated with prosecutors. That began to change earlier this year, when his wife, Pamela, entered a guilty plea on charges relating to the venture fund and agreed to cooperate in ongoing investigations. Since the charges against John Torkelsen became public, the Los Angeles prosecutors have signaled a renewed interest in him. In recent weeks, the team, led by Assistant U.S. Attorney Richard Robinson, has called securities defense lawyers seeking documents related to Torkelsen, said lawyers familiar with the case. Meanwhile, prosecutors have recently been interviewing former lead plaintiffs in Milberg Weiss suits. Torkelsen’s cooperation could signify a broadening of the investigation, which originated in 2000 when Steven Cooperman-a convicted felon and former Milberg lead client-told prosecutors that he received illegal kickbacks from the firm. Lawyers for Milberg Weiss and Lerach have denied wrongdoing. Their attorneys declined to comment. Allegations of kickbacks have continued to be the prosecutors’ focus, say lawyers familiar with the probe. With Cooperman’s credibility in question, they have spent years trying to bolster their case with a handful of other former clients. Earlier this year, they indicted Palm Springs, Calif., lawyer and former Milberg client Seymour Lazar-and his former attorney-for allegedly taking such kickbacks, a move that was widely seen as an attempt to pressure Lazar into testifying.

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