U.S. News

Milberg's Bershad Pleads Guilty in Class Action Kickback Scheme

Associated Press

David J. Bershad, a former partner of the New York law firm Milberg Weiss & Bershad, pleaded guilty to conspiracy Monday in connection with kickbacks the firm paid to plaintiffs in class action and shareholder lawsuits.

Bershad was one of two of the firm's partners indicted in July 2006, along with the law firm, an attorney who prosecutors say accepted kickbacks, and a fourth man accused of laundering funds in the case.

The other partner, Steven Schulman, resigned from the firm in December and has vowed to fight the charges.

Bershad, 67, of Montclair, New Jersey, pleaded guilty in federal court to conspiring to obstruct justice and conspiring to make false statements under oath.

In the plea agreement reached late last week, Bershad also agreed to forfeit $7.75 million, to pay a $250,000 fine and to cooperate in the government's ongoing investigation.

Steven G. Cooperman, who prosecutors say was another of the plaintiffs paid to lend his name to a variety of class action lawsuits, is scheduled to plead guilty to conspiracy on Tuesday, prosecutors said.

A federal grand jury in Los Angeles handed down a 20-page indictment last year against Schulman, Bershad and the firm. Prosecutors allege the defendants secretly paid more than $11 million in kickbacks to get people to take part in more than 150 class action and shareholder lawsuits.

Federal prosecutors contend that secret kickback arrangements allowed the firm to be among the first to file lawsuits on behalf of shareholders and secure the lucrative position as lead plaintiffs' counsel.

Prosecutors allege the firm received more than $200 million in fees from such lawsuits filed over the past 20 years.