*** David Bershad and Steven Schulman, two former partners from the notorious New York law firm of Milberg Weiss Bershad & Schulman LLP, were each sentenced yesterday by a federal judge in Los Angeles to six months in prison for their role in a racketeering conspiracy allegedly spanning decades in which serial plaintiffs were illegaly paid to file shareholder class action suits against some of the biggest and most successful corporations in America. The two attorneys also were each fined $250,000, and they have forfeited millions in ill-gotten gains from their scheme. Two other former partners from the firm, Melvyn Weiss and William Lerach, already are serving 30 and 24 month sentences, respectively, for their roles in the enterprise.
The law firm itself -- which now simply goes by the moniker Milberg LLP in light of the felony convictions of its prior named partners -- was called the "meanest law firm" in America by Fortune magazine, and settled the federal racketeering indictment against it by agreeing to pay a fine of $75 million and subject itself to federal oversight. Although Milberg LLP claims that none of its remaining partners participated in the illegal conduct the question still begged is whether some of them were aware of the scheme and what, if any, steps they took to address the problem. After all, what did they think was happening when the same individuals repeatedly were serving as plaintiffs in dozens of lawsuits? Indeed, in 1995, Congress enacted the Private Securities Litigation Reform Act specifically for the purpose of curbing the abuses for which Milberg Weiss and its partners were indicted, and surely this legislation raised a red flag even among the innocents at the firm.
Milberg Weiss Bershad & Schulman LLP and several of its partners were indicted in May 2006, and although they initially proclaimed their innocence with outraged claims of political persecution by an unfriendly Bush Justice Department, their guilt pretty much was assumed once political hacks from the Democratic Party -- including Rep. Charles Rangel, Rep. Carolyn McCarthy, Rep. Gary Ackerman & Rep. Robert Wexler -- started their public campaign to derail the prosecution. After all, innocent people do not need cheap politicians to argue their case in the public but are content to rest on the evidence. And is a testimony from Rep. Rangel ever really a good reference? Frankly, this motley crew of Democratic congressmen, many of whom were recipients of prior acts of kindness from the law firm and its partners, should be indicted for attempting to interfere with the orderly administration of justice.
*** In order to fully appreciate the sleaze factor among some of the partners at Milberg Weiss Bershad & Schulman LLP -- in case a federal racketeering indictment does not adequately do the job -- it's worth taking a look also at a contemporaneous case against former partner Paul D. Young who was sued by New York City for criminal nuisance involving the operation of a gay S&M sex club out of the basement of his home. The sex club, El Mirage, is tied to a larger gay sex club enterprise further including the East Side Club at 227 East 56th Street and the West Side Club at 27 West 20th Street. Gay businessman Robert N. DeBenedictis appears to have some interest in all three of these gay sex clubs -- as well as several gay bars, restaurants and other businesses serving the gay community -- and also is a defendant in a class action consumer fraud lawsuit for his alleged role in the company which sells the hair loss remedy Avacor. Download Class Action Complaint Against Avacor.pdf