William Lerach, the nation’s best known class action shareholder litigator and prominent San Diego attorney, pleaded guilty to a single count of criminal conspiracy that will result in his serving one to the two years in prison, and paying other monetary penalties, said the U.S. attorney’s office Sept. 18.

In the plea agreement, which comes after a seven-year investigation into his former law firm, Milberg Weiss LLP, Lerach, 61, acknowledges that he paid named plaintiffs in class action lawsuits filed against corporations. The plaintiffs were generally promised 10 percent of the attorneys’ fees collected in settlements, the usual way many companies dealt with the suits.

In addition to prison time, the plea agreement also requires that Lerach forfeit $7.75 million to the government and pay a $250,000 fine.

In a 2006 indictment by federal prosecutors against Milberg Weiss, the document refers to “partner A” and “partner B,” believed to be Lerach and his longtime partner, Melvyn Weiss, and alleges that they made $11.3 million in payments to sources who agreed to be lead plaintiffs.

Lerach left Milberg Weiss and formed his own firm here in 2004, and built it up to 180 attorneys, including 103 in San Diego. The firm collected more than $7 billion in class action settlements, mainly through the celebrated case against Enron Corp. and related defendant banks.

Lerach resigned from his firm, now called Coughlin Stoia Geller Rudman & Robbins, Aug. 31.

Through the late 1990s and into the early part of this decade, Milberg Weiss amassed enormous monetary rewards through its shareholder securities litigation, making Lerach, often called the “King of Torts,” extremely wealthy. He was ranked No. 8 on the 2006 San Diego’s Wealthiest list by the Business Journal with an estimated net worth of $900 million.
— Mike Allen