Apparently former Milberg partner Alan Schulman (now with rival plaintiff firm Bernstein Litowitz) provided secret testimony to a grand jury regarding the government's ongoing investigation into alleged kickbacks and other supposed illegalities perpetrated by the superstar plaintiff firm and possibly by former Milberger, Bill Lerach:

Via LA Business Journal Online:

Prosecutors Step Up Probe of Milberg Weiss Law Firm

LA Business Journal
Auguat 8, 2005

A federal grand jury in Los Angeles heard testimony three weeks ago from Alan Schulman, a former partner in the high profile law firm of Milberg Weiss, which is being investigated by federal prosecutors for possibly making secret, illegal payments to plaintiffs in its securities class-action lawsuits, the Wall Street Journal reported. The cooperation of Schulman was being seen as a major coup for prosecutors, who have been investigating the New York-based law firm for four years. Prosecutors have informed William Lerach, the high profile former partner of the firm, and two other former partners, David Bershad and Melvyn Weiss, that they could face indictment for conspiracy. It is illegal to make payments to plaintiffs in such cases to avoid a conflict between lead plaintiffs and class members. The investigation was first made public in June when a Seymour Lazar, a retired Palm Springs attorney, who was a plaintiff in at least 50 Milberg Weiss securities cases, was charged by the grand jury with fraud, conspiracy and money laundering for allegedly taking $2.4 million under the table.

The original story appears here.

This would not be the first or only time that Schulman has spoken out against the actions of his former firm and against the conduct of Bill Lerach in particular. He took them to task in a recent Fortune magazine article that was generally critical of the conduct of Lerach and his former firm, Milberg Weiss (summarized via the SanDiegoReader):

The Fortune article said Alan Schulman, a then-Milberg Weiss partner who now practices in San Diego with another firm, believed Lerach was "reckless," "vindictive," and "dangerous" and would ultimately ruin the firm. But Milberg's head, New York's Melvyn Weiss, wouldn't rock the boat at that time, and Schulman departed...

Looks like Schulman finally found an eager listener in the federal government and an open forum for his complaints via grand jury. Meanwhile, The Wall Street Journal has reported that two former Milberg partners have been granted immunity. Schulman would appear to be one. The other is as yet unknown but no doubt that anonymity won't last.

-- MDT

Labels: Bernstein Litowitz and Berger, money laundering