David Bershad, former senior partner at Milberg Weiss & Bershad LLP, has pleaded guilty to conspiracy in federal court. He admitted to concealing secret payment agreements with plaintiffs in class action suits, and will forfeit $7.75 million and pay a $250,000 fine. Bershad could receive up to five years in prison, but if he cooperates in the prosecution of others, he will likely serve less than that.
Last year, Milberg Weiss was indicted on charges related to kickbacks paid to clients who served as lead plaintiffs in class action suits. The firm has pleaded not guilty, and Bershad is the first major player to plead guilty in an investigation that has been going on for 6 years.
Bershad’s plea agreement contains details about wrongdoing by Partner A and Partner B, who are believed to be Melvyn Weiss and William Lerach. It is alleged that Bershad “was told by Partner A that Partner A had personally provided cash payments” to at least one client who served as a named plaintiff in a class action. It is also alleged that Partners A and B and others”pooled their personal cash into a fund Bershad maintained in his office at Milberg Weiss, which was used by the Conspiring Partners to supply cash for secret payments to paid plaintiffs and others.”