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Indictment of Class Action Law Firm and Lawyer Fuels Debate on Prosecution of Corporations

David Bershad and Steven Schulman along with class action plaintiff firm Milberg Weiss Bershad & Schulman LLP, were indicted in mid-May 2006 for paying millions of dollars in kickbacks to clients to serve as plaintiffs. Brooke Masters of The Washington Post reports that the case breaks a familiar trend of corporate defendants cooperating with government prosecutors “such as Computer Associates International Inc., accounting firm KPMG LLP and drugmaker Bristol-Myers Squibb Co., agreeing not to press criminal charges in exchange for sweeping management changes, large financial penalties and help putting individual employees behind bars.”

Masters reports that simply indicted the firm could run it out of business, and explains why the indictment has reopened the debate on whether the Justice Department should indict companies and the basis for concerns that the indictment may have been politically motivated.

Regardless of the motivation for the indictment, if the allegations are true then the firm’s conduct was illegal and the practice had to be stopped. More details may be found in Brooke Masters’ article, “A Law Firm Under Pressure,” printed May 25, 2006, in The Washington Post.