William Lerach, the Rancho Santa Fe attorney who struck fear and loathing into the hearts of corporate America through his firm’s class-action shareholder litigation, formally pleaded guilty Oct. 29 in a Los Angeles federal courtroom to one count of criminal conspiracy.
Lerach, 61, had agreed to a legal settlement last month in a far-reaching case against members and former members of the New York firm Milberg Weiss for conspiring to pay lead plaintiffs in class-action lawsuits dating back to the 1970s, according to the federal plea agreement.
“Generally, these individuals (who were the named plaintiffs) were promised that they would be paid approximately 10 percent of the net attorneys’ fees that Milberg Weiss obtained in their respective class actions,” Lerach’s plea agreement stated.
Under the agreement, Lerach will forfeit $7.75 million to the federal government, pay a $250,000 fine, and accept a sentence of between one and two years, but the sentencing judge does not have to adhere to that term. Sentencing is scheduled for Jan. 14.
The maximum he can receive under federal guidelines was five years, and twice the gross gain or gross loss resulting from the offense.
Lerach becomes the seventh person to plead guilty to charges in the case involving Milberg Weiss. Co-founder Melvyn Weiss and the firm itself have pleaded not guilty to charges, and a trial has been set for next year.
As part of his settlement with the government, Lerach resigned Aug. 31 from his San Diego firm, now called Coughlin Stoia Geller Rudman & Robbins.
Known as “The King of Torts,” Lerach became extremely wealthy as a result of the many cases that companies decided to settle rather than incur massive legal fees fighting the suits. Last year, he was ranked No. 8 on the list of San Diego’s Wealthiest by the Business Journal with an estimated net worth of $900 million.
, Mike Allen