Although Mel said nothing, Lerach heard a sigh on the other end of the phone and could tell what his mentor must have been thinking: “A good Jew. Haven’t I dedicated myself to one mitzvah after the other? I received the annual Gotham Anti-Defamation League Award the same year you joined the firm. Who led the B’nai B’rith delegation to Buenos Aires when the Israeli embassy was bombed by terrorists in 1992? And again two years later, when the Jewish center got bombed? Who raised money for the memorial on the site of the embassy bombing? Whose name is on a plaque now at the memorial? Who’s leading the lawsuit against Volkswagen for their slave labor camps during the Holocaust? Speaking of the Holocaust, who’s closing in on billions in reparations from those reprehensible Swiss and German banks who kept the deposits of the victims? Who’s doing it on a pro bono basis? Who loaned his secretary’s temple $50,000 for repairs, with no strings attached? Who’s on the board of directors of the Israeli Policy Forum? A good Jew? Who’s been tutoring you about the teachings of the Torah? And served you and your family matzos? Who holds seder at his house? You are not even Jewish and you are telling me to be a good Jew?”
It was a blessing and a curse to know a man as well as Lerach knew Weiss (and vice versa), to know what the other man was thinking. Weiss had said nothing, nothing at all, but Lerach couldn’t hold his tongue. He was too hyped up. Responding to his mentor’s silent censure, he continued: “On my honeymoon with Star, you remember, we visited Treblinka, the Jewish Museum there. And it’s me, not you, who’s on the board of the Holocaust Museum.”
Sensing he’d said too much, Lerach fell silent, waiting for his partner’s rebuke. Instead he heard Bershad’s voice. “I don’t know,” the phlegmatic and parsimonious partner responded. “We don’t need to be spending that kind of money.” He listened for Mel’s response, and there was only silence at the other end of the phone. Seconds passed. Then he heard his mentor’s voice. “Goddammit, Dave. Do it!” And he knew the check would be cut and on its way to the museum.
Following the rewriting of the rules of civil procedure that Congress had mandated, Mel Weiss had been keeping his own counsel. While it surely created a setback for the plaintiffs’ bar, it would hit less endowed law firms hardest. Firms such as Milberg Weiss, with a large infrastructure, experience, and a big bank account, were essentially handed competitive advantages in their own markets. That is, if they could retool.
Indeed, without announcing it, perhaps without immediately realizing it, from the depths of defeat, the firm of Milberg, Weiss, Bershad, Hynes & Lerach was on the threshold of its greatest success. On the horizon corporate America, emboldened by defanged shareholder legal threats and tepid government regulation, was also retooling to create vast, fast-growing, complex businesses sustained by shareholder money, mergers, acquisitions, marketing, and nearly unfathomable accounting and financial tools. The chieftains who ran these companies would eventually swirl themselves once again into the gunsights of Bill Lerach and Mel Weiss—although the two partners would begin to embrace different formulas to keep themselves in clover.
Lerach’s shooting star would be the huge pools of money created by the 1947 Taft-Hartley Act, mandating the formation of employee pension funds, particularly by public employees’ unions and other large labor organizations. Weiss chose to concentrate on a narrower client base while representing institutional investors as a cocounsel or subordinate counsel.
AT THE BEGINNING OF 1997 Pam Davis took up with a new acquaintance named Dennis Drabek, a forty-two-year-old deck builder. Over drinks, she lamented her on-again, off-again relationship with Little. Since it was currently off-again, she felt free to confide how abusive her former boyfriend had been. Perhaps because Drabek was attentive and sympathetic, she told him something that truly grabbed his attention. Her former lover and tormenter was trafficking in stolen art. She had seen the pieces and knew they had been in a nearby self-storage place. Drabek asked her if she could identify the art. All she could say was that one was a Monet and one looked like a Picasso.
Drabek did his homework, scanning news clippings and calling friends in California. Within a day he learned that two pieces—a Picasso and a Monet—had indeed been stolen from a Los Angeles area home and were still missing after five years. The insurers offered a reward of $250,000, which was in the offing through the Art Loss Register of the International Foundation for Art Research in New York. Drabek called and reached Anna Kisluk, the director. He asked deliberately obtuse questions to try to determine whether the reward was for the same paintings Pam Davis had told him about. By the time he hung up, he was convinced it was.
He called a friend, a former FBI agent named Bob Friedrick, who suggested he arrange a three-way call between Davis, Drabek, and himself. The two men persuaded Davis to elaborate on what she had seen when she and Little opened the cardboard boxes. After the call, Friedrick called Drabek back and told him to contact his lawyer. Drabek called former Cleveland Municipal Court Judge Edward F. Katalinas and told him what he knew. Katalinas arranged a meeting with Cleveland FBI agents Dick Wren and Scott Brantley.*
The same day agents Wren and Brantley received another call concerning the missing art. It was from Anna Kisluk of the Art Loss Register. She recounted her conversation with Drabek, saying she had grown suspicious at the interest he was showing in the reward. The agents called Special Agent Virginia Curry, their bureau counterpart in the Los Angeles field office. Curry, a native of New Jersey, had joined the FBI in 1979, after having had her fill of teaching high school Spanish and Italian “to a lot of wise-guy wannabes from Jersey.” She was also interested in art, which landed her cases whenever thefts occurred.
She and her partner, Agent Pete Munoz, had paid the initial call on Steven Cooperman at his Brentwood home following the police report of an art theft. While Cooperman had appeared to be cooperative, one thing still stood out in her mind from that meeting. Cooperman had been joined by his attorney Richard Purtich. “Why does a guy bring his attorney along if he’s got nothing to feel guilty about?” she had asked her partner. Curry placed a call to Los Angeles police detective Don Hrycyk, then head of the department’s special art theft detail.
Hrycyk, it seemed, had been speaking to a woman named Roberta Vasquez, a former Playboy Bunny and J. J. Little’s ex-wife. She knew about some paintings he kept and had her own suspicions. But when he left, the paintings had left with him. The FBI agents obtained a search warrant and paid a call to J. J. Little at his apartment, but not before interviewing Davis. She confirmed to them what she had told Drabek. They thanked her and left to talk to Little, who instantly knew he was cornered. He asked to call his lawyer, Gerald Gold. Negotiations commenced. Little had a story and was willing to tell it, provided he received consideration for cooperating.
Wren, a veteran FBI hostage negotiator, arranged the cooperation agreement. And Little told his story. He had been asked by his Los Angeles law partner James Tierney to store a couple of boxes for him, he told investigators, swearing he’d been unmindful of what the boxes contained until he had opened them in the Cleveland-area storage facility. He recounted moving the boxes to a new location in nearby Olmstead Falls, fearing Davis would tell everyone she knew about what she had seen. They were in a locker under the name of the gardener for his mother, JoAnn Remington, a Shaker Heights public relations executive. “I was just trying to get the paintings back to the insurance companies no questions asked,” he tried to explain.
On February 2 Little led the agents to the Mill River Indoor Self-Storage on Bagley Road in Olmstead Falls, about a ten-minute drive south of Rocky River. There the missing masterpieces were found, undamaged, in their cardboard boxes. Satisfied that Little was intent on cooperating, the agents sent word to Curry. But the FBI still needed more from him.
Further investigation confirmed that the paintings were those stolen five years earlier from Cooperman. Calls to Anna Kisluk at the Art Loss Register and art dealers helped establish that Cooperman had purchased the pieces—the Mon
et from the Montgomery Galleries in San Francisco in 1987 and the Picasso from Sotheby’s in New York the same year. The Sotheby’s catalog showed that the painting had sold for $870,000. Agents were able to learn that the Monet sold for slightly more. Even more telling information was obtained from two insurers the FBI was able to track down. From Lloyd’s of London, Cooperman had been able to obtain a $5 million policy on the Picasso. From AXA Nordstern Art Insurance Corp., he purchased a policy insuring the Monet for $7.5 million. Immediately after the theft, Cooperman and his wife, Nancy, filed insurance claims. Both were denied. The Coopermans sued in California Superior Court, and the insurers agreed to settle for $17.5 million in late 1993—with $12.5 million paying off the original claim and another $5 million in punitive damages Cooperman collected, successfully alleging that he had been under emotional duress from both the art theft and the subsequent balking by the insurers on paying his claim.
One more bit of information supplied by Los Angeles police added to FBI agents Wren and Brantley’s growing certainty that they were onto a big case. Among the legal clients of James Tierney, whose cardboard boxes had ended up in J. J. Little’s self-storage locker, was Dr. Steven Cooperman. The agents met again with Little, persuading him that it would be in his interest to help them set up a sting. He had no choice.
Remarkably, Virginia Curry conducted most of the investigation from a Los Angeles hospital, where her thirty-nine-year-old husband, Herb Curry, Special Agent, U.S. Fish and Wildlife Service, suffering from melanoma, lay near death. Knowing that Tierney had previously been an organized crime prosecutor in New York, she accurately predicted the first thing he would do when J. J. Little came calling.
“I left the hospital and went to the FBI lab. We couldn’t wire J. J. the traditional way. The wires we were used to carrying felt like lunch boxes. Tierney would certainly pat J. J. down and discover the wire,” she remembered. As it happened, the bureau was experimenting with a new digital transmitter, small enough to withstand a search from even a practiced hand.*
On Valentine’s Day 1997, with agents stationed outside, Tierney met Little at the Marriott Hotel in Marina del Rey. As expected, Tierney refused to talk in a hotel room, thinking it might be bugged. He insisted they walk outside, in traffic. First he patted Little down, not once but three times, even asking him to empty the contents of his cigarette pack. Finding nothing, the two left the hotel and walked along the promenade facing the water. As they talked, agents listened. What they heard convinced them that J. J. Little had not been lying. Tierney was part of an art theft conspiracy.
The next day Curry telephoned Tierney and asked him to come to the U.S. attorney’s office in downtown Los Angeles—and to bring his attorney. When Tierney showed up, he was accompanied by Brian Sun, a former assistant U.S. Attorney with whom Curry had worked on numerous cases. On a table in the room Curry had placed a recording device. “Does this sound familiar?” she said, switching on the recorder. She and assistant U.S. attorney Richard Robinson registered the shock on the faces of Sun and Tierney as the incriminating dialogue between Tierney and Little was replayed.
“Will I lose my license to practice law?” Tierney asked, his face revealing panic. That might be the least of his concerns, he was told, considering that he faced twenty years in prison for art theft. As he himself had told suspects countless times as a federal prosecutor, Tierney had a choice: cooperate or go to prison. He did not hesitate. He had taken the art. Cooperman, his client, was $4 million in debt and facing foreclosure on his Brentwood home and had asked him to do it. The story was plausible, but to back it up, Tierney would have to let the FBI listen in and record his telephone conversations with Cooperman about the stolen art.
On June 5, with FBI agents recording the conversation, Tierney and Cooperman referred to Little as “Cleveland Indian” and to the missing paintings as “baseball cards.” Tierney said he was worried about Little and his drug habit, wondering aloud whether the stolen paintings were safe with him. Maybe they should figure out a way to have them returned, he suggested.
“No. Let sleeping dogs lie,” Cooperman said tersely, and then suggested, “Drop them in a Dumpster.”
Tierney balked, saying into the tapped phone: “But the problem with a Dumpster is that the garbage man comes, and he picks ’em up, and he might say, ‘Hey, this looks like a Monet.’”
Cooperman had another idea. “Why not run them through a shredder?”
“A shredder? It’ll break a shredder,” Tierney protested.
“Well …” Cooperman could be heard to pause. Then he got another idea. “We have shears, garden shears, I think.”
Tierney said he’d have to think about it and would call back the next day. The following morning, under coaching from the FBI, Tierney again called Cooperman. He tried to act agitated, telling Cooperman that he had just received a phone call from a reporter telling him that The Cleveland Plain Dealer was reporting the FBI’s recovery of the lost paintings. The paper had identified Cooperman as the owner, Tierney said, explaining that the reporter had contacted him because records showed that he had represented Cooperman as his attorney.
Cooperman asked what Tierney had told the journalist.
“I said: ‘That’s great news,’” the attorney replied.
“Good,” Cooperman said. “They don’t know nothin’ from nothin’.”
Tierney said he was still worried about Little and his drug problem and that his former law partner might implicate them both.
“That’s utterly ridiculous,” Cooperman was heard to say. “People are very aware of [what] cocaine does to people. They become paranoid, they become crazy. They become not credible.”
The next day, June 7, the New York Times picked up on The Cleveland Plain Dealer story. Quoting FBI special agent Robert Hawk, the paper confirmed that the art had been found earlier in Cleveland. The Times added additional information, though, reporting that in 1991, in a complaint filed in federal court in Los Angeles, the Paul Revere Life Insurance Company had accused Dr. Cooperman of insurance fraud, claiming that it had been one of fifteen separate companies paying Cooperman $58,000 a month for eighteen disability-income insurance policies without the good doctor having revealed a previous history of heart disease or the existence of the other policies. Toward the end of the piece, the Times noted that Cooperman had been a named plaintiff in at least thirty-eight class action securities fraud cases. What no newspaper reported or even knew about, and what the FBI and the Los Angeles police did not know either, was that by the middle of 1997 Steven Cooperman and his relatives had collected more than $6.5 million in secret payments from the law firm of Milberg, Weiss, Bershad, Hynes & Lerach. The money had come directly from David Bershad’s office credenza. Sometimes it came in checks, sometimes in cash. Sometimes it came through his attorney Jim Tierney, who would receive the money in the form of “case referral services,” for which he had referred not a single case.
WITH THE STOLEN ART located, and with audio recordings of phone calls between Tierney and Cooperman, Assistant U.S. Attorney Richard Robinson had evidence to take before a grand jury. Unlike many federal prosecutors, Robinson, lanky and taciturn, with thinning brown hair, a graduate of the University of California’s Boalt Hall Law School, harbored no ambitions to collect trial experience and then move on to a more lucrative job at a private law firm. He had already been in private practice, spending nearly seven years representing entertainers. Those unfamiliar with his background were also surprised to learn that he had been something of a musical prodigy as a kid, adept at various instruments ranging from the bass to bass guitar to keyboard. He’d even formed his own rock band, streaked his hair purple, worn fluorescent earrings, and played in clubs in West L.A. That stood in sharp contrast to the now understated and mostly apolitical Democrat who was content to work in the federal bureaucracy. He relished the ideal of fairness and justice and working in law enforcement.
With eighteen million residents, seven counties, and thirty-five
cities within its jurisdiction, the Central District of California office was responsible for the most populous and diverse area in the nation. Its 250 assistant U.S. attorneys were second in number only to New York. Like New York, L.A. generated its fair share of white-collar scam artists. Robinson especially loved working in the major frauds division, but this was the first art-theft-turned-insurance-scam he’d encountered. On tape, with Tierney’s assistance, Cooperman could not have been a more cooperative, albeit unsuspecting, witness against himself. Wasn’t that how these things usually went down? With no honor among thieves, once you flipped one, the stampede was usually on.
Still, Robinson was reluctant to tip his hand, insisting that every piece of evidence be ironclad. Nine years earlier he had gone into a grand jury confident of securing an indictment, only to have the case thrown out. He vowed never to repeat that mistake. On the other hand, he had FBI agents on his team—one in particular—who didn’t brook any foot-dragging.
“I wasn’t going to let this case die,” Curry recalled later. “The clock was running and time for the grand jury to be empanelled was just about up. I called over to the U.S. attorney’s office and said, if they didn’t get this case going, I would take it to New York.”
Robinson presented the case to a Los Angeles grand jury in July 1998. Behind closed doors he furnished witnesses, including Tierney, Little, and Curry. Robinson presented evidence that included photographs of the stolen art and the fax inflating their value to the insurers, and when he walked out, he had a sealed indictment charging Steven Cooperman with eighteen felony counts of crimes ranging from insurance fraud to tax fraud. Even then, the extent of Cooperman’s larceny was greatly understated.
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