"Vulture" heads to hoosegow"
By Al Lewis
Wednesday, February 13, 2008
Here's something you never, ever see: renowned consumer
advocate Ralph Nader writing a letter to a federal judge asking
him to go easy on a confessed white-collar crook.
"Until now, I have not written a letter asking a judge to be
lenient in sentencing a defendant," Nader wrote. "I do so
today because of the unique contribution William Lerach has made
to our society and to the practice of law. ...The suits he
has filed have improved the marketplace and have improved
Lerach, 61, is a renowned shareholders attorney who has sued
just about every major company accused of fraud from Enron to
WorldCom to Denver-based Qwest.
Lerach has made examples out of hundreds of sleazy executives.
Now, it looks like he's being made an example, too.
On Monday, Lerach received a two-year federal prison sentence
for his role in a kickback scheme.
"I pleaded guilty ... because I was guilty," Lerach reportedly
said at his sentencing Monday. "It was, as they say,
Lerach's former firm, Milberg Weiss, is accused of paying people
kickbacks to become plaintiffs in class-action lawsuits.
This firm was so good at what it did, it once attracted
one-third or more of the class-action cases filed each year.
It so dominated this field that some defendants complained of
You can bet Qwest founder Phil Anschulz won't be sending a care
package to Lerach in the hoosegow.
Lerach sued Qwest for accounting fraud and won $400 million.
His firm demanded fees of $96 million, which the courts slashed
to $60 million.
"Guys like him masquerade as legal eagles for the downtrodden,"
said Curtis Kennedy, an attorney who challenged Lerach's fee on
behalf of Qwest retirees. "Their gluttony proves they are
... overfed vultures."
Our corporate system favors litigation over regulation.
When companies cheat, the remedy is to sue, and lawyers get
Still, it's easy to lionize Lerach, too. He took on
Charles Keating, the poster child for savings-and-loan fraud,
and junk-bond kind Michael Milken, who pleaded guilty to
Lerach recovered more that $7 million for Enron investors, and
in Colorado he has helped
extract multimillion-dollar settlements from StorageTek,
Mimiscribe, Tele-Communiciations Inc., Samsonite, the North
Face, Evolving Systems and EFTC Corp.
A sentencing memorandum Lerach's lawyers compiled cited scores
of letters from do-gooders such as Nader and even a regular guy
named Charles Prestwood.
"Our country needs more people like Mr. Lerach, Prestwood wrote,
"to help put a stop to corporate crime and stop the large
corporations and banks from stealing everything from the poor,
Rest assured, more are on the way. After the 1980s
class-action lawsuits targeted S&Ls. After the 1990s, it
was telecom flops.
"Now there's an uptick in shareholder litigation due to the sub
prime meltdown," said John Holcomb, a
With Lerach out of the way, and his former partner Melvyn Weiss
fighting similar charges, scores of other law firms can chase
the many opportunities to sue that our free-market system
"I suspect his competitors are applauding his departure,"
Respond to Al Lewis at blogs.denverpost.com/lewis,