A plea deal by a Los Angeles attorney has added another item to prosecutors’ list of alleged activity by the New York-based Milberg Weiss Bershad Haynes & Lerach LLP law firm: to pay off persons to serve as plaintiffs in shareholder class action law suits.
Richard R. Purtich, 53, pleaded guilty to a felony tax offense at U.S. District Court in Los Angeles. Among the charges, Purtich confessed to concealing $879,868 in income he was paid by Milberg Weiss in 1993.
He could serve as much as three years in prison, said the Central District of California U.S. Attorney’s Office.
In the plea agreement, Purtich admitted that he and others received checks from Milberg Weiss totaling more than $3.5 million between 1992 and 1996. The money was compensation for Steven G. Cooperman, who allegedly served as a name for plaintiff suits that the law firm filed over the course of 20 years.
Purtich allegedly never made referrals or did any work, or anything else to earn the money, the U.S. Attorney’s Office said.
Last week, Milberg Weiss was indicted, along with David J. Bershad and Steven G. Schulman, partners in the firm, in a 20-count indictment alleging obstruction of justice, perjury, bribery and fraud.
The law firm is accused of a scheme where individuals received secret kickback payments to serve, or cause friends and relatives to serve, as named plaintiffs in lawsuits filed by the firm.
The indictments culminate a five-year investigation of the firm by the Justice Department.
The investigation began after Cooperman, 64, of Connecticut, was convicted of insurance fraud and revealed his role in a scheme that he said saw him obtain $6.5 million in payments from the firm.
Another man, Howard J. Vogel, 61, of Aventura, Fla., also was involved in the scheme, allegedly receiving about $2.5 million. He is to plead guilty to charges of perjury in connection with the scheme and will forfeit $2 million in payments.
All three men are cooperating in the investigation.
Milberg Weiss denied all wrongdoing in a statement and said it plans to defend itself and its partners vigorously against the charges.
The firm said it spent six months negotiating with prosecutors, but unreasonable requests to give up attorney-client privilege and to make “unfounded statements accusing its own partners of crimes and otherwise become an agent for the government” made an agreement impossible.
The law firm called the charges absurd and the indictment of the firm “completely unnecessary and unjust.”