Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘Melvyn Weiss’

Ignatius on trial bar scandals; New Yorker on Scruggs

“At its worst, the system is close to legalized extortion. … It would be nice if the class-action lawyers reformed themselves, but if not, someone should file a lawsuit.” But op-ed columnist David Ignatius regards Melvyn Weiss and Dickie Scruggs as “good guys” gone wrong and says what occasioned their downfall “was a system in which the money just got too big”. This suggests their practices were more honest and aboveboard at an earlier stage in their careers when the stakes were smaller, but Ignatius does not offer evidence for this view, and I wonder whether he has any (“Reining In the Kings of Tort”, Washington Post, Jun. 5).

Relatedly, the New Yorker published a big article last month on the Scruggs scandal by correspondent Peter Boyer. (“The Bribe”, May 19, abstract; PDF at WSJ law blog). David Rossmiller, unsurpassed chronicler of that scandal, does an excellent job explaining why the article is, not wrong, exactly, but disappointing (May 27).

Filed under: , ,

“The paid plaintiffs and their corrupt attorneys”

Judge Walter, pronouncing sentence, wasn’t buying any of the “victimless crime” spin from the Mel Weiss camp:

The wrongdoing, which included submitting false statements to courts overseeing the lawsuits, “strikes at the core — at the heart of the judicial system,” the judge said. …

Judge Walter said he was dubious of arguments that the conspiracy was a “victimless crime” because the firm, best-known simply as Milberg Weiss, vigorously represented investors in the cases that were brought. “In effect, the absent class members were at the mercy of the paid plaintiffs and their corrupt attorneys in this invidious scheme,” the judge said. The lead plaintiffs taking the secret payoffs may have been more interested in boosting Milberg’s fees than in getting the maximum recovery, the judge said.

Josh Gerstein at the Sun has more on the sentencing, including hints as to the curious role of a Denver, Colorado lawyer named Gary Lozow. (“Lawyer Weiss Gets 30-Month Sentence for Kickbacks”, Jun. 3).

Filed under:

“Mother Teresa, move aside”

Mel Weiss — yes, that Melvyn Weiss, of Milberg Weiss, the one who ran a corrupt but lucrative kickback scheme premised on systematic lies to judges over decades, then stonewalled its disclosure through years of investigation — “deserves recognition as ‘one of the greatest humanitarians of our time,’ according to a sentencing memo his lawyer filed Friday.” (Ben Hallman, “Urging Leniency, Big Names Go to Bat for Mel Weiss”, American Lawyer, May 28).

Included were more than 240 supportive letters filed by friends and well-wishers of the famously piratical class-actioneer. It’s hard to read the WSJ law blog’s excerpts from these letters without shedding a tear of admiration:

“Donald Kempf, the former chief legal officer at Morgan Stanley says that after an unexpected on-the-street encounter, Weiss offered to help Kempf find a certain kind of watch. “And he did.”

According to a letter submitted by a friend and art dealer in Sun Valley, Idaho, in a “spontaneous” gesture while in Vienna, Weiss bought the art dealer’s wife an expensive pair of boots.

(WSJ law blog, May 27). The roster (PDF) of character vouchers and pleaders for leniency includes many names familiar to readers of this site, including Stephen Susman, Benedict Morelli (president of the New York State Trial Lawyers Association), David Boies, Stan Chesley, Edward Labaton, and Christopher Seeger; the list is headed by lawprof and frequent Milberg Weiss expert witness Arthur Miller. We commented in February on the similar batch of letters on behalf of Weiss’s felonious collaborator Bill Lerach.

Filed under: , , , ,

“My client is being framed”, cont’d

Our weekend post questioning defense attorney John Keker’s assertions of the innocence of client Dickie Scruggs (“prosecutors have concocted a ‘manufactured crime’ in which his client had no part”) drew a couple of comments from readers who saw Keker’s statements as no more than the zealous advocacy we should expect of a defense attorney. They’ve also been discussing the issue over at the WSJ law blog, where they quote defense attorney Benjamin Brafman’s rapidly disproved boast that his client Mel Weiss “will be fully exonerated,” as well as Monroe Freedman, the Hofstra legal ethicist and regular antipode of views expressed on this site, who

says that generally speaking, he doesn’t see problems with a lawyer making aggressive statements to the press in defense of his client. “We don’t know what the client told the lawyer when the lawyer made the statements,” he says. “We don’t know what Scruggs told his lawyer. We don’t know if Scruggs said I did it, but I want to fight it or something else entirely.”

George Sharswood’s Essay on Professional Responsibility, the standard American text on legal ethics before the modern period, contains the following assertion (pp. 99-100 of Google Books digitized version):

…no counsel can with propriety and good conscience express to court or jury his belief in the justice of his client’s cause, contrary to the fact. Indeed, the occasions are very rare in which he ought to throw the weight of his own private opinion into the scales in favor of the side he has espoused. If that opinion has been formed on a statement of facts not in evidence, it ought not to be heard — it would be illegal and improper in the tribunal to allow any force whatever to it; if on the evidence only, it is enough to show from that the legal and moral grounds on which such opinion rests.

Read On…

Filed under: , , , , ,

Quoted in today’s Times

I’m quoted on the Melvyn Weiss guilty plea, and on the way certain crooks have successfully been passing themselves off as white knights in press coverage of shareholder and consumer litigation. (Jonathan D. Glater, “High-Profile Trial Lawyer Agrees to Guilty Plea”, New York Times, Mar. 21). For more on Weiss’s plea, see yesterday’s post.

More Weiss reactions include a NY Sun editorial:

Mr. Weiss and his partners made their careers, and their fortunes, casting those they were suing — insurance and tobacco executives, Swiss bankers — as crooks. Some of them may have been, though many were not. Now these lawyers are admitting to the court that they are crooks, too. … Congress has already acted to reform the class-action system from the “first-to-file” system that engendered the Milberg Weiss abuses. But until Congress and the state legislatures act further to reform the civil litigation system, the costs of Weiss’s career will be borne by all of us.

Interviewed by the L.A. Times, Columbia lawprof Jack Coffee (who’s done a lot of work for Milberg, right?) thinks Mel Weiss got a “uniquely good deal” in the plea. Similarly: Greenfield.

Filed under: , , , ,

Mel Weiss to plead guilty

WSJ: “Melvyn Weiss, the onetime powerhouse shareholders lawyer, has struck a deal to agree to plead guilty in a case alleging improper kickbacks, according to a person familiar with the investigation.” We’ve been covering the Milberg Weiss scandals on this site since they broke; my WSJ op-ed “Inside Milberg’s Credenza” is here. More:

According to a statement released Thursday by the defense lawyer, Benjamin Brafman, Mr. Weiss will plead guilty to participating in a criminal conspiracy to pay a share of legal fees to plaintiffs in shareholder suits brought by Milberg Weiss. Such kickbacks are improper because they give plaintiffs representing a class of all shareholders an incentive to accept a deal that might not be best for the class.

Under the terms of the plea agreement, Mr. Weiss faces a sentence of up to 33 months in prison. Mr. Weiss has also agreed to pay a total of $10 million in fines and penalties, according to the statement.

(Jonathan Glater, NYT). More at WSJ law blog (Weiss: “I deeply regret my conduct”) including a copy of the plea agreement and government statement, both PDF.

The firm of Milberg Weiss, formerly Milberg Weiss Bershad & Schulman LLP, famous for shedding indicted names as an ecdysiast sheds clothes on stage, is now down to plain old Milberg LLP, and will presumably be able to stop there, the Milberg after whom it was named being nearly twenty years deceased. (Bumped 1:50 p.m.)

And: World-class chutzpah morsel from the NYLJ: “If Mr. Weiss had proceeded to trial, his defense was expected to argue that he was so preoccupied with humanitarian and charity work during the charged period that Messrs. Bershad and Schulman had been able to carry on the kickback scheme without his knowledge.” In the plea agreement, Weiss stipulates that he was in effective control of the firm and its operations and party to the conspiracy, and agrees to forfeit a sum of nearly $10 million which he acknowledges is less than what he gained from the illegal conduct.

Plus: Portfolio:

Weiss made staggering profits from the kickback scheme. According to the indictment, his share of the law firms profits from 1983 to 2005 amounted to more than $209 million. …

Sanford Dumain, a member of the Milberg L.L.P. executive committee, said, “Having previously believed former leaders’ assurances of their innocence, the firm is now seeking to find a fair and appropriate resolution of remaining issues so that we can continue to work on behalf of injured investors and consumers.”

The firm added in a statement: “Milberg L.L.P. apologizes to all judges, lawyers, clients, and class members, who deserve full and complete adherence to all legal and ethical norms.”

Portfolio also reports that the Milberg firm is intent on obtaining a deferred prosecution agreement: “If the firm pleaded guilty to a federal criminal offense, it is highly unlikely that a judge would approve the law firm to serve as lead counsel for the plaintiff in a class action.” More on the firm’s renaming: Lat. And Carter Wood at NAM notes the silly encomia with which Weiss’s lawyer is still attempting to gild his crooked client.

Filed under: , ,

Exclusive: New details in Milberg Weiss obstruction of justice case

The government accuses Mel Weiss of withholding a fax responsive to a subpoena that would have corroborated Hillel Cooperman’s claims of kickbacks hidden as options to purchase art. From the National Law Journal ($):

Prosecutors claim that Bershad, in response to the government’s 2002 subpoena, called Weiss to his office after discovering the fax and other documents in his desk drawer. “Weiss took them from Bershad, falsely stating, ‘David, you had nothing to do with the art option,'” prosecutors claimed in their recent motion. “Weiss then put the documents in his safe, concealing them from Milberg Weiss’ document custodian who was searching for documents responsive to the subpoena.”

Weiss then allegedly locked the documents in his safe. David Bershad has pled guilty, and is presumably the source for this conversation. Given the role of fundraising the law firm plays in Democratic politics (including for the two leading contenders for the Democratic nomination, Hillary Clinton and Barack Obama, and for John Edwards), one wonders why the only coverage of the ongoing scandal is in for-subscription legal papers. We have uploaded the government’s brief in opposition to Milberg Weiss’s motion to dismiss the obstruction-of-justice charge:

Read On…

Filed under: , , , , ,

February 6 roundup

  • Calling it “oppressive”, committee chair in Mississippi legislature vows to defeat proposal to ban restaurants from serving obese patrons [AP/Picayune-Item; earlier]

  • Latest in whales vs. sub sonar: judge deep-sixes Bush’s attempt to exempt Navy from rules against bothering marine mammals [CNN; earlier]

  • Much-criticized opener of ABC’s new series Eli Stone aired last Thursday, and Orac takes a scalpel to the vaccine-scare script [Respectful Insolence, which also covers new autism studies]

  • Scary proposal approved by California assembly would strong-arm larger private foundations — and businesses that deal with them — into “diversity” numbers game [Lehrer/Hicks @ L.A. Times]

  • New Dutch study finds thin people and nonsmokers cost health system more in long run than obese and smokers — theories behind Medicaid-recoupment litigation are looking more fraudulent every day, aren’t they? [AP]

  • Late, but worth noting: blogger nails John Edwards’s demagoguery on Nataline Sarkisyan case [Matthew Holt @ Spot-On, via KevinMD; more here, here, and from Ted here]

  • Puff piece on food-poisoning lawyer William Marler [AP/KOMO]

  • Ready, set, all take offense: Sen. McCain likes to tell lawyer jokes [WSJ law blog]

  • In suit charging UFCW with “racketeering”, Smithfield cites as an underlying offense union’s having lobbied city councils to pass resolutions condemning the meatpacker; company has hired Prof. G. Robert Blakey, who denies the RICO law he drafted is a menace to liberty [Liptak, NYT; some earlier parallels in federal tobacco suit]

  • Golden age of comic books was 1930s-1950s, but golden age of comic book litigation is now [NLJ]

  • New at Point of Law: Hillary’s “disastrous” mortgage scheme; Qualcomm sanctions ruling could curb discovery abuse; if Mel Weiss has been kind to you, why drop him down memory hole?; new academic theory on uniformity of contingency fees; the trouble with patenting tax avoidance strategies; and much more [visit][bumped Wed. a.m.]

Filed under: , , , , , , , ,

Milberg Weiss scandal: plaintiff-for-pay sentenced

Elderly (80) and ailing, retired entertainment lawyer Seymour Lazar drew an unusually light sentence of six months home detention after having “pled guilty to taking secret payments from Milberg Weiss for helping to bring dozens of securities lawsuits by serving as a plaintiff or arranging for his relatives to do so. Three former Milberg partners, William Lerach, David Bershad, and Steven Schulman, have also pled guilty in the scheme,” while the law firm itself and founder Mel Weiss continue to fight the charges and are expected to face trial later this year. “According to a statement from the prosecution, [federal judge John] Walter said he would have sentenced Lazar to a substantial prison term if he were younger and healthier.” (Josh Gerstein, New York Sun, Jan. 29).

Filed under: , ,