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LOS ANGELES � Last week’s plea agreement between federal prosecutors and former Milberg Weiss partner David Bershad highlighted two of the more unusual forms of payment alleged in the government’s ongoing criminal kickback scheme against the firm. Those creative payments included supporting a business venture, a “phony option” to purchase art work and payments disguised as “retainer checks” for consulting work. Prosecutors indicted Milberg Weiss, Bershad and another former partner, Steve Schulman, last year charging that they had received more than $200 million in attorney fees by making secret and illegal payments to lead plaintiffs in their shareholder cases. Last week, Bershad, the senior partner in charge of the firm’s finances, admitted to conspiring to obstruct justice and making false statements under oath. He agreed to forfeit $7.75 million and pay a $250,000 fine. Bershad’s lawyer, Robert Luskin, a partner at Washington’s Patton Boggs, declined to comment specifically about the proceedings. In the plea deal, Bershad admitted that he, along with Schulman and five other senior partners, made illegal payments that allowed them “to secure a reliable source of individuals who were ready, willing, and able to serve as named plaintiffs in Class Actions that Milberg Weiss wanted to bring,” according to court documents filed last week. In some instances, Bershad admitted to paying the named plaintiffs directly in cash; in others, he and the other partners wrote checks to intermediary law firms and lawyers that were disguised as “referral fees” and “professional fees,” according to the plea agreement. But Bershad’s plea agreement highlights some of the more unusual tactics undertaken to make the payments. One case involves Seymour Lazar, a named plaintiff who was indicted in 2005 as part of the government’s criminal case. Milberg Weiss wrote a check in 1979 to a business venture associated with Lazar as payment for him serving as a named plaintiff. “Partner A” told Bershad that “they should satisfy their obligation to Lazar by supporting this business venture and at the same time have an opportunity to make some money.” Lazar has pleaded not guilty. Lazar’s lawyer, Louis Feuchtbaum of San Clemente, Calif.-based Bienert & Miller, did not return calls. In another case involving Steve Cooperman, who is one of three named plaintiffs implicated in the plea agreement, Bershad, “Partner B” and “Partner A” agreed in 1989 that “Partner A” would travel to California to pay Cooperman $175,000 out of his own funds for his work as a plaintiff and disguise the transaction as a refundable “phony option to buy art from Cooperman or overpaying for art purchased from Cooperman.” “Partner A” later declined to exercise the option, which Cooperman refunded. The three lawyers reimbursed Cooperman by making payments to Cooperman’s brother-in-law that were disguised as “retainer” checks for consulting work. Cooperman pleaded guilty last week to conspiracy and obstruction of justice charges. In Cooperman’s plea agreement, the phony art option was reported to be for Pablo Picasso’s “Nude Before A Mirror,” also known as “Reclining Nude.” That painting was among those claimed to be stolen as part of an insurance fraud scam for which Cooperman was convicted in 1999 and served a 30-month prison sentence. Cooperman later cut a deal with prosecutors to provide information about Milberg Weiss. “Partner A” and “Partner B” are believed to be Milberg Weiss senior and founding partner Melvyn Weiss and former partner William Lerach, respectively. Neither has been charged, but both rejected plea deals in recent weeks, according to previous press reports. Weiss’ lawyer, Benjamin Brafman, a partner at New York-based Brafman & Associates, declined to comment. Lerach’s lawyer, John Keker of San Francisco’s Keker & Van Nest, did not return calls. Lerach’s firm, San Diego-based Lerach Coughlin Stoia Geller Rudman & Robbins, recently announced that he would retire this year. Bloomberg News reported last week that Lerach would retire within 60 days, but a spokesman at Lerach Coughlin declined to confirm that information. Cooperman’s lawyer, Russell Gioiella, a partner at Litman, Asche & Gioiella in New York, did not return calls.

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