“It was our strongest point”: Quoted in “Pacific Homes Promotion Told,” San Diego Union-Tribune, August 28, 1980.
The presiding judge then read the terms: Frank T. Barr et al. v. The United Methodist Church et al., San Diego Superior Court, Wednesday, December 10, 1980, Reporter’s Daily Transcript, vol. 47.
“I would like to think”: Quoted in ibid.
John McCain would meet Charles H. Keating, Jr.: Dan Nowicki and Bill Muller, “McCain Profile: Keating Five,” Arizona Republic, March 1, 2007.
Twenty years later CEOs would make: Jennifer Gill, “We’re Back to Serfs and Royalty,” Business Week, April 9, 2001.
Photographs taken after the settlement: Bruce V. Bigelow, “Class Action Gun-slinger; It’s Always High Noon for William Shannon Lerach, and That’s the Way He Likes It,” San Diego Union-Tribune, April 9, 2000.
“His work ethic”: Samuel W. Witwer, Jr., interview by CMC, July 3, 2008. 32
“nothing personal”: Samuel W. Witwer, Jr., e-mail to CMC, March 29, 2009. 32
“Bill was an absolutely brilliant lawyer”: Colin Wied, interview by CMC, April 29, 2008.
“Yeah, he’d been here”: Ibid.
“I thought it was all the money”: William S. Lerach, interview by CMC, January 19, 2008.
“We took a case”: William S. Lerach, interview by CMC, March 19, 2008.
“Bill quickly volunteered”: Colin Wied, interview by CMC, April 29, 2008.
CHAPTER 2: THE YOUNG MAN FROM PITTSBURGH
Son of the Great Crash: Reynolds Holding and William Carlsen, “Phantom Riches,” San Francisco Chronicle, November 15, 1999.
“They treated him”: Ibid.
“I think what influenced me”: Quoted in Jonathan Potts, “Lead Attorney,” Pitt, March 2002.
Harry Truman: President’s News Conference, March 14, 1946, Public Papers of the Presidents.
a middleman: Richard Lerach, Jr., interview by CMC, January 19, 2008. 37
voted against Franklin D. Roosevelt: Ibid. 37
they married in 1938: Ibid.
whom the family called Dick: Ibid.
Their favorite playground: Gene Carney, interview by CMC, March 9, 2009. 38
“the bloodiest mess”: Quoted in Gary Land, ed., Growing Up with Baseball: How We Loved and Played the Game (Lincoln: University of Nebraska Press, 2004), pp. 105–13.
playing wintertime hockey: Jim Kerr, interview by CMC, March 22, 2009. 38
the coveted male lead: Tricia Sutton, interview by CMC, March 22, 2009.
“a great guy” and “BFF”: Ibid.
“Miss Roberts”: William S. Lerach, interview by PD, April 14, 2008. 39
a scholarship was endowed: “Student Awards and Honors,” press release, Department of Sociology and Anthropology, University of West Virginia, 2006. 39
after-school and summer jobs: Richard F. and William S. Lerach, interview by CMC, January 18–20, 2008.
“Can you pay the tuition?”: Ibid.
“He never got out of the starting blocks”: William S. Lerach, interview by PD, October 19, 2008.
a career in engineering: William S. Lerach, interview by CMC, January 20, 2008.
an experience that was so galvanizing: Gene Carney, interview by CMC, March 9, 2009. 41
His natural bent for acting: Jim Kerr, interview by CMC, March 22, 2009.
he lay down and died: Richard Lerach, Jr., interview by CMC, January 19, 2008.
“the best of both worlds”: Richard A. Morgan, e-mail to CMC, March 8, 2008.
drifted away from the fraternity scene: Rev. Erl G. “Puck” Purnell, letter to CMC, March 27, 2009.
“It is a shame my mother”: William S. Lerach, interview by PD, January 10, 2008.
she wanted great things for him: William S. Lerach, interview by CMC, January 19, 2008.
“I finally found something”: Ibid.
CHAPTER 3: THE YOUNG LAWYER FROM PITTSBURGH
“Our take on the antiwar protests”: Richard A. Morgan, e-mail to CMC, March 8, 2008.
“The plaintiff in such an action”: William T. McGough and William S. Lerach, “Termination of Class Actions: The Judicial Role,” University of Pittsburgh Law Review 33 (1972), p. 466.
might have to drop out of law school: William S. Lerach, interview by CMC, January 18, 2008.
this “brilliant” law student: Dennis Unkovic, interview (by telephone) by CMC, July 27, 2008.
“You know what I think of plaintiffs’ attorneys?”: William S. Lerach, interview by CMC, January 20, 2008.
These were the tricks: Ibid.
Stalling was more profitable: Ibid.
“I saw myself destined”: William S. Lerach, interview by PD, April 14, 2008.
a San Diego institution known as U.S. Financial: Don Bauder, “Those Big Fish Are Gonna Get You,” San Diego Reader, January 25, 2005.
J. Tomlinson Fort IV: William S. Lerach, interview by CMC, January 20, 2008.
tense relations: Ibid.
venerable Brown Palace Hotel: William S. Lerach, interview by PD, January 7–8, 2008.
one of the earliest voices warning: “Fraud Charges Add to UDC Woes,” Business Week, April 7, 1975.
“For over 30 years”: Quoted in Caroline E. Mayer, “Accountants: Cleaning Up America’s Mystery Profession,” U.S. News & World Report, December 19, 1977.
His father was an auditor: Stephen Weiss, memo on history of Milberg Weiss firm, to members of Seeger & Weiss, September 20, 2007.
“taking a knife”: William S. Lerach, interview by PD, January 7, 2008.
“We must go after them”: William S. Lerach, interview by PD, January 7–8, 2008. 52
he would be in charge: Ibid.
“I thought to myself” : Quoted in Timothy L. O’Brien, “Behind the Breakup of the Kings of Tort,” New York Times, July 11, 2004.
“As for Melvyn Weiss”: William S. Lerach, interview by PD, January 20, 2008.
“Doesn’t everybody want to be”: Ibid.
CHAPTER 4: GOLDEN STATE
as the airliner descended into San Diego: William S. Lerach, interviews by PD, October 15–29, 2007.
C. Arnholt Smith: “Mr. San Diego in Dutch,” Time, June 11, 1973. 55
Smith literally presided: Carl M. Cannon, “Stage Is Set: The State vs. C.A. Smith,” San Diego Union-Tribune, August 16, 1978.
“perhaps the swindler of the century”: “Crime in the Suites,” Forbes, August 15, 1975.
“total fraud”: “Westgate Scandal,” Time, October 29, 1973.
“does credit to a collection”: Otto Friedrich, “F.D.R.’s Disputed Legacy,” Time, February 1, 1982.
Glass-Steagall: Joe Asher, “Glass-Steagall: A Fresh Look,” ABA Banking Journal, February 1981.
Truth in Securities Act of 1933: Cabell B. H. Phillips and Herbert Mitgang, From the Crash to the Blitz: 1929–1939, p. 139.
“problem in a Holyoke”: Mayer U. Newfield to Milton V. Freeman, February 8, 1996, SEC archives.
“Why don’t we just take Section Seventeen”: Ibid.
in a session that took less than ten minutes: Securities and Exchange Commission, minutes of meeting, May 16, 1942, SEC archives.
“Well, gentlemen”: Mayer U. Newfield to Milton V. Freeman, February 8, 1996, SEC archives. 58
“No one dreamed at that time”: Ibid.
“The civil liabilities imposed”: William O. Douglas and George E. Bates, “The Federal Securities Act of 1933,” Yale Law Journal, December 1933.
if other parties contributed to this fraud: David M. Brodsky and Jeff G. Hammel, “The Fraud on the Market Theory and Securities Fraud Claims,” New York Law Journal, October 24, 2003.
There were hurdles: Timothy L. O’Brien, “Behind the Breakup of the Kings of Tort,” New York Times, July 11, 2004.
another lawsuit in California: William Blackie et al. v. Leonard Barrack et al., U.S. Court of Appeals for the Ninth Circuit, September 25, 1975.
have his legal theory affirmed: Ibid.
w
here he wanted to live forever: William S. Lerach, interviews by PD, October 15–29, 2007.
biggest civil case in San Diego history: Ibid.
Turrentine was the type of jurist: Howard B. Turrentine, interview by CMC, April 7, 2009.
“Good morning”: quoted by William S. Lerach, interview by PD, January 8, 2008. 62
schoolboy being sent to the principal’s office: Howard B. Turrentine, interview by CMC, April 7, 2009.
“Young man”: Ibid.
“Is this what you are looking for?”: William S. Lerach, interviews by PD, October 15–29, 2007.
“Here’s hoping it’s a growth industry”: Ibid.
Weiss invited Lerach to join his firm: Ibid.
Lerach persuaded Weiss to allow him to remain in San Diego: Ibid.
alter the pronunciation of the family name: William S. Lerach, interviews by CMC, January 18–20, 2008.
the conversation in the car: Observations of Carl Cannon, who accompanied the Lerach brothers in the car from Pittsburgh to Morgantown on January 19, 2008.
“‘Isn’t it a shame we lost the Fatherland?’”: Ibid.
CHAPTER 5: A HOUSE ON THE HILL
an enormous mansion: William S. Lerach, interview by PD, October 17, 2007.
son of an Armenian immigrant: “Earl Gagosian Is Dead: Hotel Founder Was 61,” New York Times, February 14, 1990.
Its succession of owners: Seth Lubove, “San Diego’s Most Expensive Homes,” Forbes.com, October 10, 2002.
Kerkorian had come a long way: K. J. Evans, “The Quiet Lion,” Las Vegas Review-Journal, September 12, 1999. 69
“keep a back door open”: Ibid.
“embark on a significant”: Robert D. McCracken, Las Vegas: The Great American Playground (Reno: University of Nevada Press, 1997), p. 95.
The cost to build: Ibid.
“The field was not level”: William S. Lerach, interview by PD, October 29, 2007.
“He’s in hock up to his eyeballs”: Ibid.
“Your interest gets paid”: Ibid.
“I was right up”: Ibid. 74
They wanted no more depositions: Ibid.
CHAPTER 6: OGRE OF THE VALLEY
“Seymour Lazar”: U.S. v. Milberg Weiss Bershad & Schulman LLP, David Bershad, Steven G. Schulman, Seymour Lazar, and Paul T. Selzer, United States District Court for the Central District of California, May 18, 2006, testimony of Seymour Lazar.
“You do remember me, then?”: Ibid.
a litany of legal dustups: Rhonda Rundle, “A Career in Courts Leads to Trouble for Seymour Lazar,” Wall Street Journal, January 19, 2006. 77
“I was very shapely”: Ibid. 77
predicting mergers and acquisitions: Ibid.
an easy way to make money: Timothy L. O’Brien and Jonathan D. Glater, “Robin Hoods or Legal Hoods?” New York Times, July 17, 2005.
“If I read The Wall Street Journal” : Ibid.
the Ampex case: Blackie v. Barrack: William Blackie v. Leonard Barrack et al., U.S. Court of Appeals for the Ninth Circuit, September 25, 1975, 524F. 2nd 891.
“You are too busy”: U.S. v. Milberg Weiss et al., U.S. District Court for the Central District of California, May 18, 2006, testimony of Seymour Lazar.
Why not designate: Ibid. 79
put themselves at risk: Ibid.
picking off targets: Ibid.
“Wait a minute!”: William S. Lerach, interview by PD, January 11, 2008.
“We sued them again”: Ibid.
“extremely aggressive”: Nancy Rutter, “Getting Mugged on the Courthouse Steps,” Upside, April 1990.
former Disney CEO Ronald W. Miller: David McClintick, “Tales from the Fable Factory,” New York Times, May 10, 1987.
“of blackmail euphemistically called greenmail”: Al Delugach, “Disney Raider to Pay Investors for ‘Greenmail.’ $45 Million Settlement Seen as First of Its Kind,” Los Angeles Times, July 13, 1989.
“Did you go to the office?”: William S. Lerach, interview by PD, January 11, 2008.
Lerach was perfecting his skill: Robert Lenzner and Emily Lambert, “Mr. Class Action,” Forbes, February 2, 2004.
a knack for boring in on witnesses: Lyle Crowley and Karen Dillon, “One Man Bull Market in Shareholder Suits,” American Lawyer, March 1998. 83
Mattel was launched in 1945: Business Week, March 29, 1976.
Sales took off: Ruth Handler Papers, Radcliffe Institute for Advanced Study, Harvard University, 2003.
Five class action securities suits: Ibid.
Richard H. Borow: William S. Lerach, interview by PD, January 12, 2008.
Borow’s characterization: Richard H. Borow, interview by and subsequent e-mail exchanges with CMC, March 30–31, 2009.
“This isn’t Burger King”: William S. Lerach, interview by PD, January 12, 2008.
“I’m not taking this crap”: Ibid.
he vowed that after it was over: Ibid.
Borow was having different thoughts: Richard H. Borow, interview by and subsequent e-mail exchanges with CMC, March 30–31, 2009.
a figure of $3.9 million: The settlement amount comes from the recollection of William S. Lerach, supplied through his assistant Kathy Lichnovsky, on March 31, 2009.
“I have the greatest law practice”: William P. Barrett, “I Have No Clients: Attorney William Lerach Sues Public Corporations When Their Stock Prices Collapse,” Forbes, October 11, 1993.
“less than pond scum”: Peter Elkind quoting T. J. Rodgers, chairman of Cypress Semicomputers, in “The King of Pain Is Hurting,” Fortune, September 4, 2000.
class action security lawsuits: Robert Lenzner and Emily Lambert, “Mr. Class Action,” Forbes, February 16, 2004.
“These suits were not clientless”: Rutter, “Getting Mugged on the Courthouse Steps.”
“All I had to do was bring the cases”: William S. Lerach, interview by PD, January 11, 2008.
Keith Park: William S. Lerach, interview by CMC, January 18, 2008.
the day of the handshake: Ibid.
“if other firms did not come to us”: Lorine Flemons Wright, “The Corporate World’s Worst Nightmare: A Man Named Lerach,” Rancho Santa Fe Review, June 3, 1993. In this question and answer interview he reveals his two favorite movies—Godfather I and II.
one of his signature achievements: Jimmy Carter, “The State of the Union Annual Message to the Congress,” January 16, 1981, Public Papers of the Presidents.
“will make the thrift industry”: Ronald Reagan, “Remarks on Signing the Garn–St. Germain Depository Institutions Act, 1982,” Public Papers of the Presidents. 90
a communist hoax: William S. Lerach, e-mail (through Kathy Lichnovsky) to CMC, April 9, 2009.
joined the other families: Gene Carney, e-mail to CMC, March 27, 2009.
The boys made parachutes: Gene Carney, interview by CMC, March 26, 2009.
new IPO zillionaires: “The Golden Geeks,” Time, February 19, 1996.
Paul N. “Pete” McCloskey, Jr.: Carl M. Cannon, “Rocinante Rides Again,” National Journal, June 3, 2006.
“There’s something going on”: Quoted in Roger Parloff, “Scandals Rock Silicon Valley’s Top Legal Ace,” Fortune, November 17, 2006. 92
at the crossroads of venture capital: Ibid.
The strategy was to represent: Gary Rivlin, “A Counselor Pulled from the Shadows,” New York Times, July 30, 2006.
“That was a period of raw greed”: Quoted in Parloff, “Scandals Rock Legal Ace.”
D&O policies: Michael H. Diamond, “D&O Insurance: Pitfalls in a New World,” National Law Journal, August 26, 2002.
average settlement was $8 million: Ibid.
“I’d go in and scare the shit”: William S. Lerach, interview by PD, January 10, 2008.
“As long as I paid”: Quoted in Rutter, “Getting Mugged on the Courthouse Steps.”
“I mean, Mr. William Weinberger”: Ibid.
“Why are you doing business”: William S. Lerach, interview by PD, January 12, 2008.
/> John Torkelsen: Elkind and Burke, “King of Pain Is Hurting.”
like hand and glove: William S. Lerach, interview by PD, January 12, 2008. 96
Paul L. Tullman: Anthony Lin, “Milberg Agrees to Pay $75 Million to Settle Criminal Charges Against New York Lawyer,” New York Law Journal, June 17, 2008. 96
these three accomplices: Elkind and Burke, “King of Pain Is Hurting.”
Valley of the Heart’s Delight: “Valley of the Heart’s Delight: Santa Clara Valley, California,” http://santaclararesearch.net.
CHAPTER 7: THE BIG CON
Edwin J. Gray: Ronald Reagan, “Nomination of Edwin J. Gray to Be a Member of the Federal Home Loan Bank Board,” February 17, 1983, Public Papers of the Presidents.
Federal Savings and Loan Insurance Corporation: Kenneth B. Noble, “Political Foot Soldier; Reagan’s Friend at the Bank Board,” New York Times, May 29, 1983.
“All in all, I think”: Ronald Reagan, “Remarks on Signing the Garn–St. Germain Depository Institutions Act,” October 15, 1982, Public Papers of the Presidents.
an astonishing array of schemers: William K. Black, The Best Way to Rob a Bank Is to Own One (Austin: University of Texas Press, 2005), p. xiii.
“three-six-three”: William Sternberg, “Cooked Books,” Atlantic Monthly, January 1992.
were suddenly obsolete: Stephen P. Pizzo, “The Real Culprits in the Thrift Scam,” New York Times, April 2, 1990.
nearly 85 percent of the nation’s 3,800 S&Ls: Stephen Rose, “Understanding the Financial Crisis,” Statistical Assessment Service, September 26, 2008.
“If you were in real estate”: William K. Black, interview by PD, October 6, 2008.
Charles H. Keating, Jr.: Black, Best Way to Rob a Bank, pp. 63–65.
Alan Greenspan: Stephen Pizzo, Mary Fricker, and Paul Muolo, Inside Job (New York: HarperCollins, 1991), p. 539.
Lerach had been radicalized: William Lerach, interview by CMC, March 18, 2008.
doling out contributions to key congressional members: Paul M. Clikeman, Called to Account: Fourteen Financial Frauds That Shaped the American Accounting Profession (London: Routledge, 2008), p.104.
a stunningly large $850,000 gift: “Excerpts from Ethics Committee’s Session on Five Senators,” New York Times, Nov. 17, 1990.
Circle of Greed Page 54
