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Lerach Gets Two Years In Prison for Kickbacks
Breaking Legal News |
2008/02/12 10:09
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The soaring and incendiary career of San Diego class-action lawyer Bill Lerach came to an ignominious end yesterday, as a judge sentenced the onetime “King of the Shareholder Suit” to two years in federal prison. Following a 2½-hour hearing, U.S. District Judge John Walter sentenced Lerach to the maximum prison term under a plea agreement Lerach reached with prosecutors for his role in a client kickback scheme. Walter rejected Lerach's request to spend part of his sentence in home detention and rebuked Lerach for his criminal conduct, saying he had “corrupted the law firm and corrupted it in the most evil way.” Walter said he would have imposed a stiffer sentence on his own and considered rejecting the plea arrangement because of the gravity of Lerach's offense. The secret kickbacks paid by Lerach's former firm, Milberg Weiss, made it easier for the firm to be named lead counsel and to command a bigger share of settlement fees in its lawsuits against major corporations. Lerach pleaded guilty last year to a single count of conspiracy and admitted to participating in the scheme, which sought clients with large stock portfolios and asked them to serve as ready plaintiffs when negative information surfaced about a company. In return, Milberg Weiss paid these clients a percentage of the firm's legal fees. Under law, the lead plaintiff in a class-action shareholder suit must serve as a representative of the class and cannot have a special interest or hidden inducement beyond other shareholders in the case.
“In the court's view, Mr. Lerach's conduct is one of the most serious crimes to come before this court,” Walter said. “The scope and duration of this conspiracy was breathtaking.” Lerach, 61, who wore a dark suit, sat quietly with his fingers interlaced on the table in front of him. As the judge delivered his sentence, Lerach kept his eyes fixed on the table, his face flushed with color. Earlier in the hearing, Lerach addressed the judge and a courtroom packed with his supporters, apologizing for “embarrassing” his family and law firm for conduct that was “completely unacceptable in a lawyer.” “I pleaded guilty in this case because I was guilty,” Lerach said, his voice quavering. “I knew what I was doing was wrong, I just did not have the strength of will or the strength of character to not join in on what was going on in our bar.” Lerach is likely to be disbarred as a result of the conviction. After joining the Milberg Weiss law firm and moving to San Diego in 1976, Lerach became a nationwide pioneer in developing new legal strategies for shareholder litigation. His smashmouth tactics made him a pariah in corporate boardrooms, but a force to be reckoned with nonetheless. He may be known most recently as the lawyer who helped recover $7.2 billion for investors in Enron Corp. Yet Lerach also devised the strategy used to recover $240 million for investors who were bilked in the 1989 collapse of the Lincoln Savings & Loan in Irvine. He became a key strategist in similar battles waged over public bond meltdowns throughout California and Washington state, and in the sprawling case against junk bond king Michael Milken and the defunct investment firm Drexel, Burnham and Lambert. Some 160 people wrote letters of support for Lerach, including U.S. Sen. Carl Levin, D-Mich., and consumer advocate Ralph Nader. “Some of the things he did were brilliant and really advanced the cause of shareholders,” said Sean Coffey, a lawyer with New York-based Bernstein Litowitz Berger & Grossman, who often battled Lerach for the lead position in lawsuits. “On the other hand, he's a confessed criminal who really bruised, rightly or wrongly, the rest of the bar.” Lerach's attorney, John Keker, argued during yesterday's hearing that his client had stopped participating in the conspiracy in 1999. Keker said Lerach was “shocked” to learn that colleagues in New York had secretly paid a client as late as 2003 – at least two years after the government began investigating the firm. The judge rejoined that Lerach had benefited for years after he stopped actively recruiting clients to the conspiracy by collecting millions of dollars in fees from tainted cases. Walter also berated prosecutors for agreeing to a sentencing range that he felt was not severe enough, saying he had considered rejecting Lerach's plea deal and forcing the case to go to trial. “The conduct to me just goes to the core of the judicial system,” Walter said. “This whole conspiracy corrupted the law firm and corrupted it in the most evil way. He has to be punished for what he did. It comes down to retribution.” Walter noted that Lerach had not sought to lighten his sentence by agreeing to cooperate in the government's ongoing investigation of Milberg Weiss and co-founder Melvyn Weiss. Amid mounting pressure from the federal investigation, Lerach led a breakaway from Milberg Weiss and founded the San Diego law firm now known as Coughlin Stoia Geller Rudman & Robbins. He resigned from that firm in August. In addition to the prison term, Lerach agreed to forfeit $7.75 million in unlawful gains, pay a $250,000 fine and serve two years of probation. He is set to report to federal prison in California on April 21. Lerach, who somberly shook hands with supporters outside the courtroom, had no comment on the sentence. New York-based Milberg Weiss and Melvyn Weiss have been indicted as part of the same conspiracy, and have pleaded not guilty. Trial is set for August. Two former Milberg attorneys and three clients have pleaded guilty in the case. |
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Obama takes winning streak into U.S. contests
Politics |
2008/02/12 06:01
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Democrat Barack Obama looked to continue his winning streak in three mid-Atlantic presidential primaries and brushed aside questions Tuesday about future contests to which rival Hillary Rodham Clinton has turned her attention. Republican John McCain sought to rebound from two weekend losses to Mike Huckabee and reinforce his position as the inevitable GOP nominee. "It's very early," Obama said when asked about his prospects in the March 4 Texas primary during an appearance near a polling place here. "We haven't even gotten through this yet, come on, man," he added, referring to Tuesday's Democratic presidential primaries in Virginia, Maryland and the District of Columbia. Clinton planned to spend election night at a rally in El Paso, Texas. Obama surprised customers at a Dunkin' Donuts shop across from a school with a polling place. Autographs-seekers jostled with reporters, cameras and Secret Service agents as Obama worked his way through the crowd with Washington Mayor Adrian Fenty to deliver donuts and coffee to his poll workers. Coming off weekend victories in five contests, Obama was favored to win the mid-Atlantic primaries which draw a heavy blend of black and better educated voters, blocs that have aided his wins in earlier matchups against Clinton. Likewise, McCain was favored on the GOP side. Democrats picked 168 delegates and Republicans 116 on Tuesday. "We need something new," Obama told a huge rally at the University of Maryland on Monday, dismissing the former first lady's suggestions that he is not tough enough for the rigors of the presidency. The Illinois senator was traveling late Tuesday to Wisconsin, which votes next week, along with Hawaii, where Obama grew up. With the Clinton campaign all but conceding losses Tuesday, as well as in other primaries during the month, the New York senator prepared to fly to Texas, which holds its primary on March 4. She is banking on strong showings there and in Ohio, which votes the same day, to blunt Obama's momentum. "I wouldn't be doing this if I didn't think I would be the best candidate," Clinton told reporters Monday as she campaigned near Baltimore. "So I'm going forward — every day, we get to make our case to the American people." |
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Feds: Terror trial prosecutor shouldn't collect legal fees
Legal Business |
2008/02/12 05:11
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A former prosecutor lied about achievements on his resume and shouldn't collect legal fees for defending himself against charges from a botched terrorism trial, federal authorities say. A jury in October acquitted Richard Convertino of accusations that he presented false evidence and concealed evidence when he prosecuted North African immigrants in 2003. The government dismissed an obstruction of justice charge a month later. Convertino asked a Detroit judge last month to order the government to pay his defense costs.
Convertino told The Detroit News and the Detroit Free Press for stories Tuesday that the government continues to try to discredit him, despite his acquittal. He said many of the allegations are false or so old that they are difficult to confirm or deny. The Justice Department's accusations include that Convertino falsely claimed a high school class presidency as well as college and law school honors. The allegedly padded resumes were used to get positions within the Justice Department and were submitted to the White House in 2001 when he was seeking a judgeship, according to the filing. "I will fight them until hell freezes over and then on the ice," said Convertino, who is planning a malicious prosecution lawsuit. "This is our government that is conducting themselves in this manner, and it's disgusting that they're able to do that." The Justice Department argued the allegations are relevant in deciding whether the government should pay Convertino's defense costs because it's important to know the information prosecutors acted on. |
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State Will Handle WVU-Rodriguez Lawsuit
Court Watch |
2008/02/12 04:12
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The lawsuit over a $4 million buyout clause in the contract of former West Virginia University football coach Rich Rodriguez is headed back to the court where it originated. A federal judge ruled Monday the matter belongs in Monongalia County Circuit Court. That's where WVU filed the case after Rodriguez resigned to take the head coaching job at Michigan. WVU had argued because it's an arm of state government, it can only be sued in state court. U.S. District Court Judge John Bailey agrees. He says the university is not an independent body. The ruling also says it's clear the outcome of the case will have an impact on state funds because any money paid to or held by the university is considered the state's money. |
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Supreme Court reinstates salmon label lawsuit
Breaking Legal News |
2008/02/12 04:06
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The California Supreme Court breathed new life Monday into a consumer campaign to get grocery stores to label farmed salmon that are artifically colored. The justices decided unanimously to overturn two lower court rulings tossing out the legal challenge. The lower courts had sided with grocers, who said such labeling disputes should be resolved by the U.S. Food and Drug Administration and not through lawsuits. But the Supreme Court ordered the deceptive marketing lawsuit reinstated, ruling that private citizens can file such challenges because of an identical state law requiring labeling. "Congress appears to have made a conscious choice not to preclude such actions," Justice Carlos Moreno wrote. The lawsuit was filed by 11 consumers and backed by California Attorney General Jerry Brown. The suit names some of the state's largest grocers, including Albertson's Inc., Safeway Inc., The Kroger Co., Trader Joe's, Costco Wholesale Corp., Whole Foods Market Inc., Bristol Farms Inc. and Ocean Beauty Seafoods Inc. The consumers allege that farmed salmon are naturally grayer than wild-caught fish. But fish farmers feed the salmon two chemicals that make their flesh redder and nearly identical looking to wild salmon.
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Appeals Court Upholds Isley's Sentence
Court Watch |
2008/02/12 04:04
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An appellate court has upheld Ronald Isley's 37-month federal prison sentence for tax evasion. The three-judge panel rejected the 66-year-old R&B singer's argument that his sentence was unreasonable due to his age, poor health and lack of proof that the federal prison system can provide him adequate health care. In its ruling, the appellate court said the trial judge was correct in sentencing and "best balanced the need to sanction Mr. Isley's `pathological' tax evasion against the need to accommodate Mr. Isley's poor health." Isley was sentenced in 2006 after being convicted of five counts of tax evasion and one count of willful failure to file a tax return. Prosecutors said Isley avoided paying taxes numerous times over a three-year period and declared bankruptcy after the IRS seized his yacht, cars and other property in 1997. He was discharged from bankruptcy four years later, but then did not file tax returns for the years 1997 to 2001 and in 2002 did not sign his return and failed to pay all taxes due. Isley suffered a minor stroke in July 2004, but got married one year later and continuously performed concerts at that time. He is incarcerated at the Terre Haute Federal Corrections Institution in Indiana and his projected release date is in April 2010. Isley was inducted into the Rock and Roll Hall of Fame and was part of the Isley Brothers, whose hits included "Twist and Shout" and "This Old Heart of Mine (Is Weak for You)." |
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How tax rebates work in stimulus package
Tax |
2008/02/12 03:09
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On Wednesday, President Bush is expected to sign the economic stimulus bill that provides tax rebates to most low- and middle-income Americans. Here are details of the plan, along with answers to questions about it from readers. Under HR5140, the Economic Stimulus Act of 2008, most working people will get $600 if they are single or $1,200 if they file a joint return, assuming they paid at least that much in federal income tax in 2007. To help people who earn little or nothing - and might be more likely to spend their rebates - Congress said that anyone who had at least $3,000 in income from a job, self-employment, Social Security and/or certain veterans benefits would get a flat rebate of $300 if single or $600 if married filing jointly, even if they don't owe income tax. If your 2007 federal tax liability is between $300 and $600 (single) or $600 and $1,200 (married), your rebate will be equal to whatever you paid in tax. Anyone who gets a rebate of any size will get an additional $300 for each child eligible for the child tax credit in 2008. To qualify, the child must be younger than 17 on Dec. 31, 2008. Higher-income people won't get anything. The rebates - including the $300 rebate for kids - start to shrink when your adjusted gross income hits $75,000 (single) or $150,000 (married). Adjusted gross income includes income from all sources, but before most deductions and exemptions have been subtracted. The rebate is reduced by $50 for every $1,000 you earn above the income limit. It disappears at some point which varies depending on your family size. Singles with more than $87,000 in gross income and couples with more than $174,000 get no rebate if they have no children. Those with children can earn a bit more before losing their rebate because it's bigger to start out with. A married couple with two kids, for example, get no rebate when their income exceeds $186,000, says Mark Luscombe, principal tax analyst with CCH. Rebates will not be sent to nonresident aliens (you must have a Social Security number to get a rebate), estates, trusts or people who are or could be claimed as a dependent on someone else's tax return. That means most high school and many college students won't get a rebate even if they earn more than $3,000 or pay taxes. The Internal Revenue Service will start issuing rebates - via check or possibly direct deposit - in early May. The rebates represent a 2008 tax cut. But instead of getting the tax cut next year, when you file your 2008 return, you'll get it this year. The IRS, however, will use your 2007 tax return to determine who gets a rebate and how much. If it turns out that you would have gotten a bigger tax rebate based on your 2008 tax return, the IRS will refund you the difference. For example, a middle-income family that has a baby born in 2008 should be able to reap an extra $300 when they file their tax return next year, Luscombe says. On the other hand, if you would have gotten a smaller rebate based on your 2008 return, you won't have to pay back the difference, says Bob Scharin, RIA Senior Tax Analyst from Thomson Tax & Accounting. Most rebates will be out by the summer, but if you don't file your 2007 taxes until the extended Oct. 15 deadline, you won't get yours until year end, CCH reports. Unlike the 2001 rebates, which went only to people who paid tax, the 2008 rebates will go to many people who don't file tax returns. The IRS says it will work with the Social Security Administration and Department of Veterans Affairs to make sure all eligible individuals know how to get a rebate. Tax advisers are encouraging people who had more than $3,000 in income from a job or self-employment in 2007 to file a tax return even if they don't owe tax so the IRS knows how to find them. The IRS has been warning taxpayers not to fall for telephone or e-mail scams that use the rebate as bait. The perpetrators try to trick people into revealing personal information they use to steal their identities. The IRS never sends unsolicited e-mails. Also be wary of banks and loan companies that offer refund anticipation loans that include the anticipated rebates when a 2007 return is filed. While apparently legal, these loans can be extremely costly. |
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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