Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘Milberg Weiss’

Arrest of NYC litigator Marc Dreier (bumped and updated)

[Originally published in the early hours of Dec. 7. Bumped Monday afternoon to reflect new developments and reader interest; updated Tuesday morning.]

News accounts are still piecing together the strange story of high-powered New York litigator Marc Dreier and his arrest by Canadian officials on charges of “impersonation”. Allegedly, Dreier posed as an official of the Ontario Teachers’ Pension Plan to support his pretense that he had a guarantee for a $50 million investment he was seeking from a hedge fund. (Sinclair Stewart, Paul Waldie and Timothy Appleby, “From $50-million deal to $100,000 bail – in a N.Y. minute”, Toronto Globe and Mail, Dec. 6). The blog Above the Law broke the story and has been on top of later developments (Dec. 4, more posts). Dreier LLP, a 250-person law firm that is said to have been owned outright by Dreier rather than run as a partnership, was “one of several firms that hired refugees from Milberg Weiss after that firm was indicted”. (Nate Raymond, “Arrest of Dreier Founder Clouds Firm’s Future”, American Lawyer, Dec. 5; NYLJ, Dec. 8; NYT, Dec. 5).

More: Huge developments on Monday:

Marc Dreier, the owner of a prominent New York law firm who was arrested last week, was hit Monday with criminal charges and civil complaints alleging he defrauded investors of about $100 million by selling them phony financial instruments.

Federal prosecutors on Monday unsealed charges of one count each of securities and wire fraud, describing a bizarre scheme to bilk hedge funds. [U.S. Complaint at ClusterStock] The Securities and Exchange Commission filed a civil suit making largely the same allegations against the 58-year-old Mr. Dreier….

The criminal and civil complaints released Monday offer the following account of events: Mr. Dreier fabricated promissory notes by an unnamed New York real-estate developer — identified as Solow Realty by a person with knowledge of the situation — and sold them to hedge funds, when in fact such notes were never issued. He fabricated supporting financial statements, and letters from an accounting firm using the firm’s logo, that purported to audit the statements. The SEC complaint says $113 million in phony notes was deposited to an account in the name of the law firm.

Scott Greenfield has more on reports circulating of missing escrow accounts and is stunned at the magnitude of the allegations: if true, “the firm is now at the epicenter of perhaps the greatest instance of lawyer dishonesty ever.” [Updated Tuesday morning to replace breaking-news WSJ account with paper’s most recent version; see comments section regarding an apparent inaccuracy in earlier version.]

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Microblog 2008-11-04

  • Quoting normally Republican friend, early in day: “Already have buyer’s remorse and he hasn’t even won yet.” [@asymmetricinfo] #
  • “Milk. Allergy warning: Contains milk” [Flickr; h/t @petewarden] #
  • Deer-vehicle collision at Connecticut & M, one of downtown D.C.’s busiest intersections? [Wood, ShopFloor] #
  • Milberg case, highest-profile law firm prosecution ever, finally winds up; 11 convictions, $100 million givebacks [WSJ law blog] #
  • Even expecting to disagree w/ many of his policies, it’s a great day when America can elect a black president [Megan McArdle] #

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November 3 roundup

  • M.D.s and J.D.s in cahoots: when neuroradiologists over-read MRIs in search of “disc herniations” and “cord compression” [ER Stories]
  • Lawyer burns his Harvard law diploma, and stop with that joking in the back row about whether there’s some way to burn all of them [ABA Journal]
  • Latest lawsuit arising from fad for photos of “Hot Chicks with Dorky Men” (that’s a paraphrase) [TMZ, QuizLaw, earlier]
  • Kid draws scary Hallowe’en mask, and next thing you know the police are called [Savannah Morning News]
  • Great moments in international human rights: “Modern European navies are now so mindful of the legal loopholes they face in tackling pirates that they often instruct commanders to simply let them go.” [Telegraph; earlier here, here]
  • China has four times the number of people we have in the U.S., while we have seven times the number of lawyers [Elefant]
  • “Vaccine injury” lawyer Clifford Shoemaker fails in effort to curtail public access to fee information, so we get to learn more about his $211,663.37 bill to the government [Seidel, Neurodiversity; related here and here]
  • More about that Milberg basketball team and its 6′ 8″ ringer [Supreme Dicta]

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October 27 roundup

  • NYC judge tosses injury suit against Lawyers Athletic League filed by a player on Milberg’s team [NYLJ]
  • Kentucky fen-phen lawyers Gallion and Cunningham disbarred [Lexington Herald-Leader]
  • Worker’s comp doc claims he noticed abnormal lab result and told patient to check with his primary doc. Patient didn’t and harm ensued. Malpractice? [CalLaw Legal Pad, KevinMD, Happy Hospitalist]
  • Federalist Society publishes text of Judge Dennis Jacobs’s speech on pro bono, but Chemerinsky digs in rather than apologize [PoL]
  • Are HIPAA privacy rules suspended during emergencies? No, and what lovely situations that’s likely to cause [HIPAA blog, more]
  • One of the more unusual personal injury lawyer websites is “like a touchy-feely hybrid of Myst and The Office” [Above the Law]
  • Gold-collar criminal defense work? McAfee decides $12 million too rich a sum for defending CFO Prabhat Goyal [Bennett & Bennett, Greenfield]
  • Sounds promising: “Texas Supreme Court decision could end peremptory strikes in jury selection” [SE Texas Record]

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June 21 roundup

  • Sure enough, former Milberg lawyers sue the convicted ex-Milberg lawyers for breach of fiduciary duty. I was wondering when that was going to happen. [WSJ Law Blog; NYLJ/law.com; earlier]
  • Why file grievance against a fellow attorney who’s only stolen $200,000 from clients? Colleagues wonder [Las Vegas Review-Journal via ABA]
  • Judge: No evidence of wrongdoing by Kenneth Pasternak. Too bad he can’t get his three years back. Meanwhile SEC keeps bringing enforcement cases on same repeatedly rejected theory of liability. [WSJ; Law Blog]
  • “What the AP and The New York Times’ Hansell don’t seem to realize is how hostile an act it is to send lawyer letters to individuals.” [Jarvis via Patterico]
  • “When judges act like politicians, the judicial selection process – elected or appointed – becomes increasingly political. Action and reaction. The politicization of the court led to the politicization of the elections for justices. … When justices arrogate political policymaking to themselves, they should not be surprised when they are held to the same standards as politicians.” [Wisconsin Policy Research Institute via American Courthouse; I said that, too]
  • Even Susan Estrich finds the Alex Kozinski web site mini-to-do as evidence of media bias. [Estrich; Patterico link roundup]
  • Senator McCaskill shows her ignorance on the Anheuser-Busch merger and corporate officer duties. [Hodak]
  • A clever attorney will already have a fill-in-the-blanks product liability complaint drafted against Lego. [Childs]
  • Hugo Chavez expropriates wealth to consolidate dictatorship. American lawyer helps. Somehow I don’t think we’ll see an Alien Tort Claims Act suit against his law firm. [AmLaw Daily]

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Milberg settles

Jonathan D. Glater reports that the former Milberg Weiss will pay $75 million over five years; the government will release a statement saying no current attorneys committed wrongdoing. (“Firm to Settle Class-Action Case for $75 Million”, NY Times, Jun. 17; also W$J). The W$J says the firm will admit that it committed wrongdoing in the past, but will not actually plead guilty–i.e., the same sort of deferred prosecution agreement that the NY Times recently condemned in the context of business. (To be clear: I’m not objecting to a deferred prosecution agreement here. Felony convictions for entities are usually effectively death sentences, and that is pointless if the guilty parties have actually left the building.)

Read On…

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June 13 roundup

  • High school graduation got rained out in Gilbert, Ariz., and a dad wants $400 from the school district for that [Arizona Republic]

  • Happens all the time in one-way fee shift awards, but still worth noting: lawyer in police-misconduct case “billed 22 hours at $480 an hour — a total of $10,560 — just to figure out how much his fees are going to be” [Seattle Times]

  • We get to decide and that’s that: New York judge orders that salaries of New York judges including his own be raised [PoL, Bader] Also at Point of Law: white-shoe Clifford Chance throws a party for New York lefties, should anyone be surprised? outsourcing of interrogation to profit-minded private contractors is bad when it’s Blackwater, good when it’s Motley Rice; tax break for trial lawyers said to be blocked for now.

  • One firefighter killed in Boston restaurant blaze had sky-high .27 blood alcohol level, the other traces of cocaine, which probably won’t impede the inevitable lawsuit against the restaurant and other defendants [Globe, background]

  • Writing again on U.S. exceptionalism, Adam Liptak contrasts our First Amendment with Canadian speech trials; James Taranto thinks he’s siding with the Canadians, but the piece looks pretty balanced to me [NYTimes, WSJ Best of the Web]

  • Milberg said to be on verge of deferred prosecution agreement deal with feds involving $75 million payment and admissions of wrongdoing [NLJ]

  • Courts in Australian state of Victoria, emulating a model tried in Canada, will resort more to mediation of intractable disputes [Victoria AG Rob Hulls/Melbourne Age]

  • Great moments in international human rights: KGB spy on the lam sues British government for confiscating royalties he was hoping to make from his autobiography [five years ago on Overlawyered]

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Client-chasing roundup

  • Screening firm hired by Beaumont, Tex.’s Provost Umphrey to do mass silicosis x-rays at Pennsylvania hotels is fined $80,500 for breaking various state rules, like the one requiring that a medical professional be on hand [Childs]
  • Milberg Weiss’s special way of obtaining perfectly pliant clients — that is to say by bribing them under the table — harmed other class members by increasing fees but not settlement sums, suggests a new study by St. John’s lawprof Michael Perino for Ted’s project at AEI [Carter Wood @ PoL]
  • Time for Texas to join many other states in requiring lawyers to inform clients when practicing without professional liability insurance [SE Texas Record; earlier here, here and here]
  • Lawyers, in concert with their public pension fund allies, jockey for control of securities case against Bear Stearns [Gerstein/NY Sun]
  • Another court, this time in California, rules that a screw maker can’t sue a law firm on the claim that its solicitation of potential claimants wrongly portrayed the company’s products as defective; amicus brief from state trial lawyers group and Sen. Sheila Kuehl says relevant provisions of state’s “SLAPP” law were “meant to protect plaintiffs groups, not companies” [The Recorder via ABA Journal; earlier case from Tennessee]
  • Most lucrative Google AdSense words still dominated by asbestos and other personal injury practice, the top terms being “mesothelioma treatment options” ($69.10 per click, and the point of obtaining the click is not to provide treatment options), “mesothelioma risk” ($66.46), and “personal injury lawyer michigan” ($65.85) [CyberWyre via NAM “Shop Floor”; more here, here, etc.]

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“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.

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