Lawyer sentenced to two years in prison in scheme involving class-action lawsuits

Eds: ADDS quotes, background. Moving on general news and financial services.


Associated Press Writer

LOS ANGELES (AP) -- William Lerach, a former partner at a prestigious New York law firm, was sentenced Monday to two years in federal prison for his role in a lucrative kickback scheme involving class-action lawsuits against some of the nation's biggest corporations.

Lerach, 61, was also sentenced to two years probation, fined $250,000 and ordered to complete 1,000 hours of community service.

"This whole conspiracy corrupted the law firm and it corrupted it in the most evil way," U.S. District Judge John Walter said during the hearing.

Authorities said Lerach's former firm, now known as Milberg Weiss, made an estimated $250 million over two decades by filing legal actions on behalf of professional plaintiffs who received kickbacks.

The firm paid $11.3 million in kickbacks to people who became plaintiffs in lawsuits targeting companies such as AT Com, Microsoft and Prudential Insurance, prosecutors said.

Seven people, including three former partners at the firm, have pleaded guilty in the case.

Lerach, whose high-profile legal victories included a $7 billion judgment against now-defunct energy giant Enron Corp., pleaded guilty in October to one count of conspiracy to obstruct justice and make false statements.

"I pleaded guilty in this case because I was guilty," Lerach said before sentencing. "It was, as they say, felony stupid."

Prosecutors had recommended a two-year prison sentence along with two years probation and a $250,000 fine. Probation officials' proposed that he be imprisoned for 15 months.