Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Superstar plaintiff lawyer William Lerach has remained outside the reach of investigators looking at a kickback scheme at his former firm, Milberg Weiss, but a guilty plea in the case on Wednesday might change that. Steven Cooperman, a former ophthalmologist previously convicted of insurance fraud, admitted to taking payments for serving as lead plaintiff in class actions filed by Milberg Weiss over 12 years. Court documents (.pdf) filed Wednesday detail Cooperman’s role and also appear to put “Partner B,” long believed to be Lerach, at the heart of the lucrative kickback scheme. Though the charging documents don’t identify Lerach by name, one source close to the investigation said Wednesday, “If you look at it, there’s an awful lot of facts in there about Bill Lerach.” That Cooperman has helped prosecutors build their case against Milberg Weiss is nothing new. He has been cooperating since its beginning. In fact, he’s the one who first told prosecutors about the kickbacks and fingered Lerach. The problem for the U.S. attorney’s office has been that Cooperman has a major credibility problem. He offered to cooperate in the Milberg investigation only after he was convicted and sent to prison for orchestrating an insurance scam by claiming some fine art in his Beverly Hills home had been stolen. Because of his past, anything Cooperman could say in trial about Lerach, or anyone else linked to Milberg Weiss, could look like an attempt to escape another stint in the slammer. But on Wednesday, Cooperman’s credibility may have become less of a problem. His plea � to conspiring with Milberg Weiss and several of its senior partners to obstruct justice and make false statements in class actions � shows that he’s not cutting a deal to get off entirely scot-free. With the plea, he faces up to five years in prison, with three years of supervised release, plus a fine of either $250,000 or twice the amount he gained in the Milberg scheme. Generally, a plea deal by a witness with baggage can help the government, but only if prosecutors can independently corroborate the testimony, said Jeffrey Bornstein, a former assistant U.S. attorney. “Why should a jury believe a witness who admits as part of his guilty plea that he lies under oath in other proceedings?” said Bornstein, a partner at Kirkpatrick & Lockhart Preston Gates Ellis. While Cooperman’s credibility may remain questionable, the detailed allegations introduced Wednesday in a 50-page charging document in U.S. v. Cooperman, CR 06-776(A), suggest prosecutors are closing in on Lerach.
Probing the Milberg Weiss ProbeFederal prosecutors have it in for the ailing class action leviathan. Follow our complete coverage of the kickback investigation.

Court documents filed in the U.S. District Court for the Central District of California Wednesday are rife with details about the role “Partner B” played in the alleged kickback scheme at Milberg Weiss. Among other things, prosecutors claim that “Partner B” directly paid Cooperman in cash to conceal the scheme. Neither Lerach, of Lerach Coughlin Stoia Geller Rudman & Robbins, nor his attorney, John Keker of Keker & Van Nest, returned calls on Wednesday. COOPERMAN COOPERATES Cooperman first agreed to cooperate with federal prosecutors in August 2000 after he was found guilty of 18 federal charges in the insurance fraud case. But, while serving time for the insurance fraud convictions, Cooperman committed unspecified “additional crimes” that breached his cooperation agreement with prosecutors, according to a release from the Central District U.S. attorney’s office. Cooperman’s attorney, Russell Gioiella, of New York’s Litman, Asche & Gioiella, confirmed Wednesday that his client was nailed by prosecutors for forging his doctors’ signatures on health insurance forms while in prison for the fraud convictions. “It was an error in judgment, but he didn’t intend to or cause any financial harm to anyone,” Gioiella said. Though Cooperman’s guilty plea has no explicit cooperation provision, Gioiella said his client will continue to cooperate if asked by prosecutors. “He’s been 100 percent truthful with the government as to Milberg Weiss,” Gioiella said. “Nothing has changed in that respect.” Not everyone agrees that Cooperman’s plea deal helps federal prosecutors in their case against Milberg. Joseph Russoniello, who was a U.S. attorney for eight years until 1990, said the deal might just cause more problems for the government. “It’s kind of a two-edged sword in many ways,” said Cooley Godward Kronish’s Russoniello. “The conviction puts the onus on a cooperating defendant to be very open, forthcoming and obviously honest, because any perjury or false statements can significantly jeopardize how the court would view [his] cooperation. “What it does do,” he continued, “is it may remove one incentive to give false testimony � that is, to avoid prosecution � and substitute a second motive or bias, which is to avoid a long jail term.” Cooperman isn’t the first former lead plaintiff tied to Milberg Weiss to plead guilty in the conspiracy probe. Howard Vogel, a retired mortgage broker from Florida, entered a guilty plea last April, just one month before federal prosecutors in Los Angeles indicted the Milberg firm and partner David Bershad and former partner Steven Schulman.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.