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Judge Delays Trial Date for Milberg Weiss Case

September 21, 2006|Molly Selvin | Times Staff Writer

The possibility of more indictments involving class-action law giant Milberg Weiss Bershad & Schulman caused the Los Angeles judge in the case Wednesday to postpone setting a trial date for the five defendants already charged.

At a status conference, federal prosecutors and defense lawyers repeatedly alluded to the prospect of additional indictments, which many observers believe could involve William S. Lerach. The San Diego lawyer, who helped pioneer shareholder class-action suits at Milberg Weiss, is one of the field's most successful practitioners. Lerach left the New York firm in 2004 to start his own law practice.

Federal prosecutors indicted Milberg Weiss and two former partners in May, alleging they paid illegal kickbacks to plaintiffs. The government claims that Milberg, along with partners David Bershad and Steven Schulman, paid at least $11.3 million in illegal fees over a 25-year period to clients who agreed to be plaintiffs. Bershad and Schulman pleaded not guilty in July in federal court in Los Angeles.

In response to questions from U.S. District Judge John F. Walter, U.S. Atty. Douglas Axel said prosecutors might bring "additional allegations not within the scope of this indictment."

Defense lawyers argued that that possibility significantly complicated their trial preparation as well as talks over a discovery schedule and trial date.

"We can't commit until we know who and what is there," Milberg Weiss attorney William W. Taylor III said.

The possibility of new defendants caused Walter to postpone setting a trial date until the next status conference, scheduled for Nov. 27. At that time, he said, he will pick a date.

Walter also expressed frustration over the length of the government's probe, now in its seventh year. "How much longer can you possibly investigate?" he asked Axel. "At some point it's got to end."

"I understand that, your honor," Axel replied.

The delay prompted the attorney for another defendant, Seymour Lazar, to ask that the charges against his client be dismissed. Thomas Bienert had filed a motion arguing that the delay violated Lazar's right to a speedy trial.

Lazar was charged last year with receiving $2.4 million in illegal kickbacks in exchange for serving or recruiting his family members to serve as lead plaintiff in more than 50 class actions. He has pleaded not guilty.

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molly.selvin@latimes.com

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