“Enron” has become shorthand for corporation wrongdoing. But there’s more than one way to screw shareholders. Namely, through bogus lawsuits.
The game is simple: a lawyer finds a shareholder willing to sue a corporation over some real or purported financial malfeasance. Said corporation, whether guilty or not, may decided to settle the suit because it’s cheaper. For the lawyers, it’s rinse and repeat.
Now one of the biggest names in that racket is heading to prison.
The career of one of the nation’s most entrepreneurial, controversial, philanthropic and rich lawyers came to a close Monday, as Melvyn Weiss was sentenced to 30 months in prison for his role in a scheme in which he and his partners used kickbacks to gain an advantage in lucrative cases.
Mr. Weiss pleaded guilty this year to conspiracy in a long-running prosecution of him and his famed law firm, now known as Milberg LLP, in which the government alleged that the lawyers paid kickbacks to clients to serve as name plaintiffs in class actions. The scheme, prosecutors said, allowed Milberg to have a ready stable of plaintiffs that filed cases quickly, enabling the firm to become lead counsel in a case and claim a larger share of the fees.
In handing down a sentence near what prosecutors sought — 33 months — Judge John Walter noted the seriousness of the offense, which he said involved a “nationwide conspiracy that continued for decades.” But the judge, in sentencing him three months shy of the maximum plea term, also appeared moved by Mr. Weiss’s good works and his age, 72.
Weiss follows another one-time luminary in this racket, William Lerach, to the pokey.
In 1996, Lerach tried to get the rules loosened in California to pursue his racket via Proposition 211.Â Voters rejected it 74% to 26%.
Republicans are tagged as the stooges of corporations. Trial lawyers are the patrons of the Democrat party.