Economist John Torkelsen, a star expert witness for Milberg Weiss in many cases, declared in a sworn deposition that he was working for an hourly fee in a case in which he estimated damages to class clients to be more than $165 million in one of Milberg’s cases against casino operator Lakes Entertainment. In reality, Torkelsen had a concealed contingency fee arrangement with Milberg that helped ensure his incentives would be lined up in favor of a high damages estimate. Now Lakes wants its settlement back with treble damages, saying it would never have offered such a high settlement had Torkelsen’s true relationship to the law firm been disclosed (cross-posted from Point of Law).
Posts Tagged ‘John Torkelsen’
May 6 roundup
- Raelyn Campbell briefly captured national spotlight (“Today” show, MSNBC) with $54 million suit against Best Buy for losing laptop, but it’s now been dismissed [Shop Floor; earlier]
- Charmed life of Florida litigators Stanley and Susan Rosenblatt continues as Miami judge awards them $218 million for class action lawsuit they lost [Daily Business Report, Krauss @ PoL; earlier here, here, and here]
- Lerach said kickbacks were “industry practice” and “everybody was paying plaintiffs”. True? Top House GOPer Boehner wants hearings to find out [NAM “Shop Floor”, WSJ law blog]
- It’s Dannimal House! An “office rife with booze, profanity, inappropriate sexual activity, misuse of state vehicles and on-the-job threats involving the Mafia” — must be Ohio AG Marc Dann, of NYT “next Eliot Spitzer” fame [AP/NOLA, Adler @ Volokh, Above the Law, Wood @ PoL; earlier]
- Sorry, Caplin & Drysdale, but you can’t charge full hourly rates for time spent traveling but not working on that asbestos bankruptcy [NLJ] More: Elefant.
- Fire employee after rudely asking if she’s had a face-lift? Not unless you’ve got $1.7 million to spare [Chicago Tribune]
- Daniel Schwartz has more analysis of that Stamford, Ct. disabled-firefighter case (May 1); if you want a fire captain to be able to read quickly at emergency scene, better spell that out explicitly in the job description [Ct Emp Law Blog]
- As expected, star Milberg expert John Torkelsen pleads guilty to perjury arising from lies he told to conceal his contingent compensation arrangements [NLJ; earlier]
- Case of deconstructionist prof who plans to sue her Dartmouth students makes the WSJ [Joseph Rago, op-ed page, Mindles H. Dreck @ TigerHawk; earlier]
- How’d I do, mom? No violation of fair trial for judge’s mother to be one of the jurors [ABA Journal]
- First sell the company’s stock short, then sue it and watch its share price drop. You mean there’s some ethical problem with that? [three years ago on Overlawyered]
Lerach’s guilty plea
Following up on Walter’s Sep. 18 roundup, Lerach should be proud of his lawyers: his plea deal is for a single count of mispaying Steven Cooperman, drops all of the Torkelsen-related charges, will likely get him out of prison in under two years, requires the government to forgo prosecution of his current law partners, and doesn’t require him to cooperate with the prosecution of Melvyn Weiss. He may well be disbarred afterwards, but he’ll also be a multimillionaire in his late sixties who can retire comfortably even after paying an $8 million fine, and nothing stops plaintiffs’ firms from offering small fortunes to Lerach to act as a “non-legal consultant.” [plea agreement; WSJ; The Recorder; NY Times]
Relatedly, Wired reprints its 1996 “Bloodsucking Scumbag” article.
Squeezing John Torkelsen
Justin Scheck at The Recorder reports that prosecutors are putting a renewed squeeze on John Torkelsen, former star witness for Milberg Weiss, in another sign that the probe of the firm may have considerably farther to run. (“Federal Prosecutors Put Pressure on Milberg Weiss’ Star Expert”, Jun. 9). For our previous coverage of the colorful Torkelsen, who is preparing to serve a five-year federal prison sentence on unrelated charges, see Oct. 10, Nov. 5, and Nov. 18, 2005.
Update: John Torkelsen guilty plea
Josh Gerstein of the New York Sun has details (“Class-Action Expert Pleads Guilty”, Nov. 4). The plea agreement, on charges unrelated to his class-action expert witness testimony, “does not contain any language requiring Torkelsen to cooperate with the inquiry” into Milberg Weiss, reported earlier (see Oct. 10).
John Torkelsen in plea deal
John Torkelsen, once described by Fortune as “the damages expert of choice for the entire plaintiffs side of the securities bar”, is “expected to plead guilty to reporting false information to a government agency in a D.C. federal court Oct. 21.” The charge arises from Torkelsen’s actions in handling a venture capital fund, rather than from his courtroom work. Before now, however, Torkelsen has declined to cooperate with prosecutors, and a change in that posture could give new impetus to the ongoing federal investigation of the law firm of Milberg Weiss Bershad Hynes & Lerach, for whom Torkelsen was a “notoriously effective expert witness … in dozens of securities suits throughout the 1990s,” according to sources interviewed by Law.com. (Justin Scheck, “Charge Against Expert May Spur Probe of Milberg Weiss”, The Recorder, Oct. 10).
For more on Torkelsen and the venture capital controversy, see Barbara Fox, “Unraveling the Torkelsen Case”, U.S. 1, May 7, 2003. Peter Elkind’s Sept. 4, 2000 expose for Fortune (“The King of Pain is Hurting“) reported:
Torkelsen’s calculations of shareholder losses routinely supported the hundreds of millions of dollars Lerach sought — and he was fabulous in front of a jury should a company decide to fight….Over more than 20 years, Torkelsen’s firm, Princeton Venture Research, not only had made tens of millions working for Lerach’s firm Milberg — by far its biggest client — but also had become the damages expert of choice for the entire plaintiffs side of the securities bar….
He sent thousand-dollar gift baskets as baby presents, and he invited his many friends in the plaintiffs’ bar to an annual black-tie Christmas party that was mind-boggling in its extravagance. At one, guests arriving in Torkelsen-provided stretch limos were heralded by buglers and greeted by costumed Disney characters. Entertainment was invariably provided by a big-name act: Little Richard one year, Aretha Franklin another.
For more on the Milberg probe, see Jun. 27, Jun. 28, Aug. 29, Point of Law Aug. 8, etc. On the reliability of Torkelsen’s numbers as submitted to courts, see the Delaware Chancery Court’s memorandum (PDF) in Cinerama v. Technicolor (2004), a non-Milberg case, pp. 10 et seq.