Crime Pays, Indeed, But Not for John Edwards

William Lerach, one of the nation's foremost class action litigators, plead guilty this week to making false statements under oath and conspiracy to obstruct justice. Lerach and fellow attorneys at top NY firm Milberg Weiss were accused of paying persons to sign on as plaintiffs in class action shareholder suits. By getting more plaintiffs faster than other firms, Lerach and Milberg Weiss could file suit quickly, get the coveted "lead counsel" spots for these big shareholder class action suits, and get a bigger share of the settlement booty. CNNMoney has a short, detailed piece on the kickback scheme here.

The Wall Street Journal also has an amazing editorial about Lerach's plea agreement. Unlike Andrew Fastow (Enron's CFO) who had to rat out his buddies to get a plea, Lerach's plea agreement does not force him to cooperate with federal authorities in their conspiracy charges against Milberg Weiss's partners. He can, quite literally, just serve his time, pay a fine, and move on. Speaking of the fine, while Lerach will pay $8M to the government in addition to his two years in minimum security country club prison, he doesn't have to pay back any of the shareholders of the corporations that he sued over the past 20 years, though his strike suits against their companies lost them millions.

How does this all tie in to John Edwards, you ask? Lerach donated over $78K to Edwards' 2008 presidential campaign, and at the beginning of this year, Edwards used his speeches to support Lerach's campaign to get the SEC not to block one of his shareholder suits on its way to the Supreme Court. Get the skinny on Lerach's tie to Edwards, now becoming a bit of a political fiasco, here, courtesy of CBS News and the Washington Post.