Plea Accord in Milberg Probe

A Century City attorney agreed to plead guilty to a felony tax charge related to an allegation that he illegally funneled money to a client of indicted law firm Milberg Weiss Bershad & Schulman, federal prosecutors said Monday.

Monday’s deal marks a major step in a six-year federal probe of Milberg Weiss, a class-action powerhouse that has helped recover more than $45 billion in corporate fraud cases while sparking criticism that its tactics amounted to corporate shakedowns.

The plea agreement involving Richard R. Purtich, 53, comes less than a week after Milberg Weiss and two of its partners were charged with paying more than $11 million in illegal kickbacks to clients.

Federal prosecutors allege that Milberg paid illegal kickbacks to people who served as ready-made plaintiffs in securities class actions, thereby enabling the firm to win lead lawyer status and extra fees.

The prosecutors allege that Milberg covered up the practice by funneling the kickbacks through intermediaries such as Purtich.

Purtich would be the second person to plead guilty in the probe and the first to admit to funneling payments. He agreed to plead guilty to concealing from tax authorities $879,868 in payments from Milberg in 1993 to a client who agreed to serve as a plaintiff in numerous securities lawsuits, the U.S. attorney’s office in Los Angeles said Monday.

Purtich, who could be sentenced to as much as three years in prison, did not return calls seeking comment.

Also in the plea agreement, Purtich admitted that he received checks from Milberg Weiss totaling more than $3.5 million for the benefit of the client, Steven G. Cooperman, between 1992 and 1996. Neither Purtich nor his associates made any referrals or performed any work to earn those payments, prosecutors said.

Cooperman, a former ophthalmologist, served as a plaintiff in as many as 60 Milberg class actions before his 1999 conviction on tax, insurance and wire fraud relating to a staged art theft.

In return for a reduced sentence, Cooperman offered to cooperate with prosecutors.

A spokeswoman for Milberg Weiss said the firm “paid legitimate referral fees to Mr. Purtich and his law firm with no knowledge that Mr. Purtich and Dr. Cooperman had any secret agreement.”

The flurry of indictments marks a significant advance in an investigation that many had thought last year was sputtering to a close.