Shareholder lawyer Lerach pleads guilty

LOS ANGELES (Reuters) - William Lerach, a top U.S. class action attorney who won billions for Enron investors, pleaded guilty on Monday to criminal conspiracy and is expected to go to prison for his role in a kickback scheme at his former law firm, Milberg Weiss LLP.

The plea agreement carries a recommended prison sentence of one to two years, but U.S. District Judge John Walter has final discretion. Lerach also agreed to forfeit $7.75 million to the government and pay a $250,000 fine.

Sentencing is scheduled for January 14.

Lerach, 61, entered his guilty plea in U.S. District Court in downtown Los Angeles. He was dressed in a gray suit and his distinctive mane of wiry hair was cut short.

He answered "guilty" in a strong voice, when Walter asked for his plea at the end of the half-hour hearing.

Lerach and his attorneys declined comment outside of the courtroom.

New York-based Milberg Weiss and the firm's co-founder, Melvyn Weiss, have been indicted for allegedly participating in a scheme in which several individuals were secretly paid to serve as plaintiffs in more than 150 lawsuits. They have pleaded not guilty and their trial is set for next year.

Lerach once headed West Coast operations for Milberg but left in 2004 to form a San Diego-based practice. Last summer, he retired from that firm, which dropped his name and is now called Coughlin Stoia Geller Rudman & Robbins LLP.

His plea agreement was announced last month, capping a seven-year investigation that began after a former Milberg client, Steven Cooperman, told prosecutors about the kickback arrangements during plea negotiations in an unrelated insurance fraud case.

Prosecutors said the firm reaped more than $200 million in attorneys' fees from lawsuits filed on behalf of paid plaintiffs over the past two decades.

The individuals were generally promised 10 percent of the attorneys' fees received by the law firm, prosecutors said.

Lerach joins former colleagues Steven Schulman and David Bershad in pleading guilty in the case. Two former clients also have pleaded guilty, and prosecutors are in plea negotiations with an attorney accused of acting as a conduit for the payments.

The plea marks a sudden, stunning turnabout for the hard-charging lawyer who spent decades sparring with big corporations on behalf of shareholders.

Lerach won more than $7 billion in legal settlements for Enron investors, amassing a large personal fortune along the way.

Last year, Coughlin Stoia Geller Rudman & Robbins LLP was the top U.S. class-action practice in terms of total value of settlements, according to shareholder advisory firm Institutional Shareholder Services.

(Reporting by Gina Keating)