Steven Cooperman is a colorful character. Eye doctor, art dealer bitter divorcee and serial securities litigation plaintiff for the biggest firm in the business, the embattled Milberg Weiss. And did I mention insurance fraudster? Well that too...

Convicted in 2000 of insurance fraud via faked art theft and facing years in prison, Cooperman offered information to prosecutors about Milberg's alleged kickback payments to selected lead plaintiffs in their securities class action cases. In exchange, Cooperman was hoping for the soft touch from federal prosecutors. The deal that Cooperman struck remains under seal.

Cooperman's information on Milberg's practices was seconded by Richard Purtich, a Los Angeles insurance lawyer who claimed that he had personally been the conduit for millions in payments from Milberg to Cooperman. Cooperman, in his own divorce proceedings had himself seperately admitted taking payments from Purtich's hand.

In his divorce testimony, Cooperman also mentioned two direct meetings with Bill Lerach, the former Milberg star who has so far remained untainted by the investigation and indictment of his former firm. Cooperman claimed that on one occasion Lerach personally gave him an enevlope stuffed with $16,000 in cash.

One case in particular in which Cooperman had served as the lead plaintiff proved to be of special interest to investigators: the 1995 AHI Healthcare shareholder class action. Former Milberg partner Alan Schulman, who has been openly hostile to the Milberg's conduct was the team leader on the AHI case. Schulman is known to be cooperating with investigators, giving prosecutors special insight into the case.

This week Cooperman plead guilty to taking more than $6 million in illegal kickbacks from Milberg Weiss and the 50 some odd pages of documentation filed indicates that prosecutors are closing on on Lerach. Court documents filed earlier this week make specific reference to "Partner B," the unnamed individual in the Milberg indictment long believed to be Bill Lerach, placing him at the center of the kickback scheme.

Lerach's lawyers are playing tough, but this can't be good news. Expected, but still not good...

-- MDT

Labels: Bill Lerach, Melvyn Weiss, Milberg, Milberg Weiss, securities, Steven Cooperman