Milberg Kickback Partner Gets Six Months

Ex-Milberg Lawyer Bershad Sentenced to Six Months 
Bloomberg by Edvard Pettersson

Oct. 27 (Bloomberg) -- Former Milberg law firm partner David Bershad, who pleaded guilty last year to conspiracy for his part in a scheme to pay plaintiffs illegal kickbacks in shareholder suits, was sentenced to six months in prison. U.S. District Judge John Walter, at a hearing today in Los Angeles, rejected a request by Bershad's lawyers for a probationary sentence as well as a request by prosecutors for three months in prison and three months of community confinement. Bershad, 68, also was ordered to pay a $250,000 fine. He already has forfeited $7.75 million. "I personally take responsibility for what I did,'' Bershad said before Walter read the sentence. Bershad was indicted two years ago together with the New York firm, then called Milberg Weiss Bershad & Schulman, and former partner Steven Schulman. Prosecutors said they secretly paid clients to file shareholder class-action lawsuits that brought in $251 million in attorney fees. Schulman, 57, pleaded guilty after Bershad and will be sentenced later today. Prosecutors sought a more lenient sentence against Bershad than against former Milberg partners Mel Weiss and Bill Lerach, who were sentenced to 2 1/2 years and 2 years, respectively. Bershad was the first senior lawyer at Milberg to plead and his cooperation helped the government to get guilty pleas from Weiss and Lerach, Assistant U.S. Attorney Richard Robinson said at today's hearing.

`Uphill Battle'

"We thought he had legitimate arguments for probation,'' Bershad's lawyer, Cristina Arguedas, said after the hearing. ``We knew we would be standing here in an uphill battle.'' Bershad was ordered to start serving his sentence Jan. 5. His lawyers asked he be sent to a minimum-security prison camp in Otisville, New York. Milberg in June agreed to pay $75 million to settle the charges. The firm faced extinction if convicted of secretly paying three clients more than $11 million to serve as lead plaintiffs. The tactic, dating back to 1979 and continuing to as recently as 2005, helped the firm file cases faster than rivals, ensuring a bigger share of settlements, prosecutors said. "He was one of the architects of the scheme,'' Walter said, in rejecting Bershad's request for probation. ``With the exception of Weiss and Lerach, there was no partner who had more intimate knowledge of the scheme than Mr. Bershad.'' The case is U.S. v. Milberg Weiss, 05-00587, U.S. District Court, Central District of California (Los Angeles). To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.