Metropolitan News-Enterprise


Thursday, February 1, 2007


Page 1


Guilty Plea Agreed to in Milberg Weiss Kickback Scheme


By a MetNews Staff Writer


A former Brentwood resident yesterday agreed to plead guilty in federal court in Los Angeles to conspiring with the class action plaintiffs’ law firm of Milberg Weiss and several of its senior partners to obstruct justice through an illegal kickback scheme.

Steven G. Cooperman, 64, allegedly agreed, along with relatives and associates of his, to serve as a named plaintiff in numerous class actions and shareholder derivative actions brought by Milberg Weiss in exchange for secret kickback payments from the firm, according to a one-count information filed yesterday by the U.S. Attorney’s Office in the U.S. District Court for the Central District of California.

The arrangement allegedly began around 1988 and lasted through at least 1999, and covered approximately 70 lawsuits filed nationwide that generated over $133 million in fees for Milberg Weiss, and $6.4 in kickback payments to Cooperman.

Cooperman and several Milberg Weiss partners, including David J. Bershad and Steven G. Schulman—Schulman is no longer listed as a partner on the firm’s web site—allegedly misled courts in order to initiate and maintain their class action lawsuits. Among other illegal acts, Cooperman allegedly concealed the kickback scheme by lying under oath that he had never received and did not expect to receive any bonus payment for serving as a named plaintiff.

The firm allegedly attempted to hide the kickbacks by either paying Cooperman in cash or disguising the money as payments to several of his lawyers, including now-suspended Century City attorney Richard Purtich. Purtich pled guilty last year to concealing from the IRS the fact that Cooperman received over $879,000 in income from Milberg Weiss in 1993, and also admitted falsely reporting to the IRS that several millions of dollars he received from Milberg Weiss from 1992 through 1996 were payments for legal work—in fact, they were moneys received on Cooperman’s behalf.

The Cooperman-Milberg Weiss kickback scheme allegedly affected numerous actions in California, including suits against Sun Microsystems, Columbia Savings & Loan, First Executive and Cineplex Odeon.

The U.S. Attorney’s Office noted that in some cases, Cooperman received payments that were more than 5,000 times greater than any recovery he would have received as a class member.

“[A]s a result of their secret and illegal kickback arrangements, they had a greater interest in maximizing the amount of attorneys’ fees awarded to Milberg Weiss than in maximizing the net recovery to the absent class members or shareholders,” the information charged.

It added that the New York-based firm, which also has an office in downtown Los Angeles, improperly favored the financial interests of Cooperman and his associates over those of absent class members or shareholders of the publicly traded companies being sued.

Cooperman served a prison sentence from 2001 to 2003 after being convicted in 1999 of committing insurance fraud by staging a phony theft of two paintings from his then-residence in Brentwood.  In cooperation with now-resigned attorney James Tierney, Cooperman allegedly staged the fake theft of the works in order to obtain insurance money and used funds he received from Milberg Weiss to compensate Tierney.

Cooperman, who now resides in Connecticut, is set to make his first court appearance in this case on April 2.

He faces a maximum sentence of five years’ imprisonment, three years of supervised release, and fines of up to $250,000, prosecutors said.

Florida resident Howard J. Vogel, 62, another named plaintiff in several of the class actions Milberg Weiss litigated, pled guilty last year to lying under oath to conceal his kickback scheme with the firm.

The Milberg Weiss firm, Bershad and Schulman were indicted last May in connection with the kickback scheme, and have pled not guilty.


Copyright 2007, Metropolitan News Company