The Daily Caveat has done his level best to kept abreast of the continuing government investigation into the conduct of noted plaintiff firms Milberg Weiss and Lerach Coughlin. While much of the recent coverage of the government's probe has centered of the indictment of retired California attorney, Seymour Lazar, another interesting figure whose role in the investigation goes back several years is convicted insurance fraudster, Steven Cooperman (Try this recent post which links to a NY Times article describing Cooperman's relationship to the government's investigation).

Long story short Cooperman, facing a ten year sentence offered federal prosecutors, knew he had something of value to offer; something that might help him reduce his time behind bars. Here's a hint...it involved kickbacks and a prominent plaintiff's firm.

"Cooperman told prosecutors, whose probe of Milberg Weiss became public in 2002, that he knew how the firm did it: with the help of people like him who served as ready-made clients in exchange for illegal kickbacks...Cooperman, who had also served as a plaintiff in as many as 60 class actions filed by the firm, was rewarded for his cooperation with a 37-month sentence in July 2001."

While the government is not talking just yet, indications of what information Cooperman might have fed to prosecutors are now available via an unanticipated source - Cooperman's divorce papers:

The five-day trial in October and November, captured in more than 800 pages of transcripts, opened a window on Cooperman's dealings with Milberg Weiss and his cooperation with federal authorities. According to testimony by Cooperman and others, between 1988 and 1997 he received about $5 million from his arrangement with Milberg Weiss — about $1 million of which went directly to him and the rest to lawyers he owed money.

...Cooperman acknowledged in the divorce case that he did not view payments from Milberg Weiss as illegal at first. "What was going on with Milberg Weiss was a very well-known activity," he said. "They openly acknowledged, and we discussed, kickbacks and the relationship that we had." "I frankly didn't think of it as a, quote, 'criminal activity,' " he said. But "I think after a certain point, I realized it was."

...In testimony in the divorce case, Cooperman and Gioiella said that Milberg Weiss not only made direct payments to Cooperman but also paid on his behalf about $2 million to lawyer Richard Purdich, who had represented Cooperman in insurance litigation and other matters. Purdich did not return several phone calls...

...Cooperman also described a pair of meetings with William Lerach, the firm's best-known partner. At one, he said, Lerach gave him an envelope with $16,000. Beyond their general statement addressing accusations against Milberg Weiss, lawyers for Lerach declined to comment. Cooperman testified that Lerach invited him to help promote legislation favorable to class-action lawyers. Although his wife was reluctant to attend a fundraiser for former Alabama Sen. Howell Heflin, Cooperman said he told her, "I think that we need to show up," noting that the couple was "going to make a lot of money from this."

While the preceding graphs from this L.A. Times article offer insight into what Cooperman had up his sleeve regarding Milberg Weiss that would interest the U.S. Attorney's office, it should be noted that state and federal authorities were plenty interested in Cooperman for his own sake. His litany of frauds and illegalities and just general chicanery really has to be seen to be believed. Take a look at the full article and you'll understand why businesses hire firms like ours to vet potential partners, executives, board members, etc.

-- MDT

Labels: Milberg