Who's Speaking Up for Bill Lerach?

When we last checked in on William S. Lerach in early December, the class action king had morphed into a newspaper pundit.

He was penning op-ed pieces for the Washington Post and San Francisco Chronicle in the wake of his Oct. 29 guilty plea to charges of conspiracy to obstruct justice and to submit false testimony in federal court.

On Jan. 6, Lerach's mighty pen struck again, when he wrote an op-ed page essay for the Pittsburgh Post-Gazette, the paper of his birthplace, attacking the Securities and Exchange Commission for failing to police insider trading.

Alas, despite his embrace of the Fourth Estate, Lerach's love of the First Amendment has its limits: He is seeking to keep under seal the legal brief and 150 supporting letters regarding his sentencing, which is scheduled for Feb. 11.

Lerach's lawyers filed the ex parte application Monday, at the same time that prosecutors filed a brief asking the judge to sentence Lerach to two years in prison. That's a bit longer than the 15 months recommended by the probation report.

Yesterday, prosecutors opposed Lerach's bid to keep his document private. "Under the First Amendment, the press and public have a presumed right of access to court proceedings and documents," asserts the short brief filed by Thomas P. O'Brien, the United States attorney for the central district of California in Los Angeles.

According to the brief, Lerach wants the seal because the letters "contain personal and sensitive information about Mr. Lerach and about those who wrote them." In fact, prosecutors are willing to allow a seal on 22 items among the exhibits.

But for the most part, prosecutors contend in their brief that Lerach has "failed to satisfy his burden of identifying a compelling interest" for the seal to override the First Amendment. In the government's view, "the vast majority of the information submitted discuss defendants abilities as an attorney; his accomplishments; and various charitable contributions made by the defendant."

Indeed. These documents can read like an opus worthy of Dickens. Just look at the one filed by attorneys for Conrad Black.

Meanwhile, the prosecutors' brief paints the pictures of unchecked hubris by a lawyer who once led one of the most powerful class action law firms in the country: "Here, the defendant, participated in a conspiracy which, by his own admission, spanned a period of at least two decades. The conduct at issue amounts to a systematic effort to obstruct and undermine the lawful functioning of the legal system in hundreds of lawsuits."

Lerach's and two former partners in the famed class action firm Milberg Weiss Bershad Hynes & Lerach, have copped guilty pleas for paying kickbacks to investors who agreed to put their names as the plaintiff on securities class actions filed against corporations. The two others agreed to sing to prosecutors, but Lerach has not. Melvyn Weiss has vowed to defend himself and his firm against the criminal charges at a trial later this year.

The prosecutors seem to give little credence to Lerach, who claims to have been ignorant about one of the paid plaintiffs, whose work resulted in a big payout in a securities class action against Oxford Health Plan that settled for $40 million in 2003. Lerach's cut of the lawyers' fees was a cool $2 million in that case, the brief points out.

Their recommendation of a 24-month sentence is capped by Lerach's plea agreement, which calls for a one- to two-year sentence. Under federal sentencing guidelines, Lerach, who will be 62 when he enters prison, should serve 27 to 33 months. He will lose his license to practice law, and, as prosecutors note, Lerach "now stands in disgrace before the profession of which he considered himself a national leader."

Lerach has agreed to forfeit $7.75 million in profits and the sentencing memo recommends that he pay another $250,000 in fines. While fellows at the plaintiffs' bar have chuckled that this is chump change for Lerach, the memo asserts "this sum represents a significant percentage of defendant's liquid net worth." Remember, the guy has got three ex-wives in addition to the current Mrs. Lerach to support.

Of the proposed sentence, Peter J. Henning, a professor at Wayne State University and author of the White Collar Crime Prof Blog, said "he is getting a little bit of a break, I guess." But Henning added: "He's lost his reputation, but he's certainly working hard to try to get it back."

Calls and email to Lerach's lawyers from Keker & Van Nest were not immediately returned.

by Karen Donovan