John McCain: Dan Nowicki and Bill Muller, “John McCain Report, The Keating Five,” Arizona Republic, March 1, 2007.
“McCain’s a wimp”: Quoted in Michael Binstein and Charles Bowdon, Trust Me: Charles Keating and the Missing Billions (New York: Random House, 1993), p. 281.
more cards to play: Ibid., p. 282.
no surprises this time: William K. Black, interviews by and e-mail exchange with PD, October 3, 6, 9, 2008.
presumption of scheme liability: Ibid.
“They have a client”: Quoted in William Sternberg, “Cooked Books,” Atlantic Monthly, January 1992.
Ivan Boesky: Ivan Boesky commencement address, University of California Berkeley, May 18, 1986, transcript.
“Greed is all right”: Ibid.
Milken’s operation: Connie Bruck, The Predator’s Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders (New York: Penguin, 1989), pp. 78– 79, 109, 120, 173–78, 217.
the longer the list of defendants grew: William S. Lerach, interview by PD, January 11, 2008.
“decade of greed”: Ed Rubenstein, “Decade of Greed?—Nineteen Eighties,” National Review, December 31, 1990.
“What is wrong with intervention”: Quoted in Walter Goodman, “Critics Notebook; Senators and Their TV Awareness,” New York Times, November 20, 1990. 110
“the little lady who didn’t get”: Quoted in Richard L. Berke, “Helping Constituents or Themselves?” New York Times, November 5, 1989.
CHAPTER 8: INTO THE BREACH
M. Danny Wall: Michael Binstein and Charles Bowden, Trust Me: Charles Keating and the Missing Billions (New York: Random House, 1993), p. 300.
a celebration was in full swing: Bill Muller, “The Keating Five,” Arizona Republic, October 3, 1999.
risky bets in raw landholdings: Norman Strunk and Fred Case, Where Deregulation Went Wrong: A Look at the Causes Behind the Savings and Loan Failures in the 1980s (Chicago: U.S. League of Savings Institutions, 1988).
“Lincoln, with assets of $4.9 billion”: “Savings Unit Gets New Chief,” New York Times, December 3, 1987.
“Always remember,” the memo stated: Sarah B. Shields et al. v. Charles H. Keating Jr. et al., Consolidated with Ronald Fishman et al. v. Lincoln Savings & Loan et al., U.S. District Court, District of Arizona, June 1992.
Wall could not sit: Nathaniel C. Nash and Philip Shenon, “A Man of Influence: Political Cash and Regulation: A Special Report: In Savings Debacle, Many Fingers Point Here,” New York Times, November 9, 1989.
American Continental filed: “American Continental Files for Chapter 11 Bankruptcy,” New York Times, August 5, 1991.
Immediately, it stopped making payments: Leah Kane, interview by PD, May 12, 2008.
the FHLBB seized Lincoln: Nathaniel C. Nash, “Collapse of Lincoln Savings Leaves Scars for Rich, Poor, and the Faithful,” New York Times, November 30, 1989.
a man of habits: Kathy Lichnovsky, interview by PD, October 10, 2008.
the huge corner office: by PD, personal observation.
he had earned $2.3 million: William S. Lerach, interview by PD, January 14, 2008.
in excess of $10 billion: Robert Lenzner and Emily Lambert, “Mr. Class Action,” Forbes, February 2, 2004.
Priam Corp.: Nancy Rutter, “Getting Mugged on the Courthouse Steps,” Upside, April 1990.
“so non-productive”: Paul M. Wythes, testimony before the Senate Committee on Commerce, Banking, and Urban Affairs, November 3, 1991.
Born with a clubfoot: Jill Wolfson and Bruce Phebus, “Q & A with Al Shugart,” Tech Museum of Innovation, San Jose, Calif., May 4, 1997.
left the staid “Big Blue” for Memorex: Patricia Sullivan, “Al Shugart, 76; Was Silicon Valley Pioneer,” Washington Post, December 15, 2006.
Shugart Associates: Mary Anne Ostrom, “Pebble Beach, Calif., Technology Executive Short on Cash,” San Jose Mercury News, June 30, 2002.
“I had a tough time”: Quoted in Peter Burrows, “Al Shugart Is in the Disk Drivers’ Seat,” Business Week, March 18, 1996.
Finis Conner: Peter Brennan, “Al Shugart’s Orange County Namesake,” Orange County Business Journal, October 16, 2000.
“Find a parade”: quoted in Chris Mellor, “RIP Al Shugart,” Techworld, December 14, 2006.
Shugart’s parade needed a little rain: William S. Lerach, interview by CMC, January 17, 2008.
Lerach “and his kind”: quoted in David A. Kaplan and Andrew Murr, “The Lawyer CEO’s Love to Hate,” Newsweek, February 26, 1996.
“Al Shugart hated lawyers”: Quoted in Reynolds Holding and William Carlsen, “Phantom Riches: Beneath the Glitter of Booming Silicon Valley, Executives Have Been Accused of Lying About Their Products and Doctoring Their Books, Leaving Devastated Investors in Their Wake,” San Francisco Chronicle, November 15, 1999. 118
“mind share”: Ibid.
“Dear Al: There’s more coming”: Quoted in Joseph Nocera, “The Lawyer Companies Love to Hate,” New York Times, July 2, 2005.
“I have his picture”: Quoted in Lawrence M. Fisher, “Profile: William S. Lerach; The Pit Bull of Silicon Valley,” New York Times, September 19, 1993.
“I probably would have become”: Quoted by William S. Lerach, interview by PD, January 17, 2008.
“In no other profession”: Patrick Frega, interview by PD, January 12, 2008. 120
“There’s no stopping him”: William S. Lerach, interview by PD, January 15, 2008.
“He took Ron Perelman’s deposition”: Ibid. 120
“He was aggressive”: Ibid.
A twenty-one-count indictment: Tony Perry, “Two Former San Diego Judges, Lawyer Get Prison Terms,” Los Angeles Times, June 13, 2000.
Lerach paid for Frega’s four children: Patrick Frega, letter to federal district judge on behalf of William S. Lerach prior to Mr. Lerach’s sentencing, November 16, 2007.
“Thank God I hadn’t”: William S. Lerach, interview by PD, January 17, 2008.
CHAPTER 9: MAKING A CASE
Nucorp Energy: Details of Milberg Weiss’s San Diego offices are based on PD’s numerous personal observations from May 1996 to May 2008.
“I’ll be living in his house”: Nucorp Securities Litigation, U.S. District Court, Southern District of California, October 19, 1987, to April 22, 1988. 124
others he deemed responsible: Ibid.
The only negative: William S. Lerach, interviews by PD, January 8–15, 2008. 124
the worst one-day percentage decline: Nicholas F. Brady, Brady Report; Presidential Task Force on Market Mechanisms (U.S. Government Printing Office, 1988).
more than a dozen defense lawyers: Nucorp Securities Litigation, U.S. District Court, Southern District of California.
“What if it turns out”: Ibid., reporter’s transcript. 125
a jury consisting of a retired navy electrician: Voire dire, October 14, 15, 1987, Ibid.
“evidence of a true life story”: Ibid.
“I was surely impressed”: Juror Russell Colson, interview by PD, July 23, 2008. 126
“I have to tell the court”: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
Judge Irving, too, obviously: J. Lawrence Irving, interview by PD, January 11, 2008.
a court order compelling Goldstone: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript. 127
“No, your honor”: William S. Lerach, interviews by PD, January 8–15, 2008.
Goldstone received the news: James Goldman, interview by PD, September 6, 2008.
Goldstone was risking: Ibid.
equally shocked: Ibid.
the giant tobacco company: Milo Geyelin, “Forty-Six States Agree to Accept $206 Billion Tobacco Settlement,” Wall Street Journal, November 23, 1998. 129
John Torkelsen: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
a unique an
d secret agreement: Walter Olson, “Milberg Expert Torkelsen Pleads Guilty to Perjury,” Overlawyered, March 3, 2008.
“I don’t think the defense”: William S. Lerach, interviews by PD, January 8–15, 2008.
barrage from James Goldman: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
“Kadison, this case”: Reynolds Holding and William Carlsen, “Phantom Riches: Beneath the Glitter of Booming Silicon Valley, Executives Have Been Accused of Lying About Their Products and Doctoring Their Books, Leaving Devastated Investors in Their Wake” San Francisco Chronicle, November 15, 1999.
just not how much: Lexecon v. Milberg Weiss Bershad Specthrie & Lerach, U.S. District Court, Northern District of Illinois Eastern Division, March 1, 1998, to April 14, 1999.
Fred Hervey: For the history of Circle K, see http://www.circlek.com/CircleK/AboutUs/History.htm.
“And it was a surprise”: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
something was happening in the jury box: Nucorp jurors Richard Bunch and Richard Colson, interviews by PD, July 28, 2008.
“I was impressed”: Patrick Coughlin, interview by PD, February 26, 2008.
Daniel R. Fischel: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
“economic analysis of the law”: Richard Posner, “The Problematics of Moral and Legal Theory,” 111 Harvard Law Review (1998): 1637–717. 139
“law and economics movement”: Richard Posner, “The Best Offense,” New Republic, September 2, 2002.
It was irrelevant: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
“Someday I’m going to wipe”: William S. Lerach, interview by PD, January 13, 2008.
“He is here to testify”: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
“Frankly, Mr. Goldman”: Ibid.
“the death zone”: “Everest: the Death Zone,” Nova, PBS, February 24, 1998.
CHAPTER 10: MAKING ENEMIES
Fischel delivered a haymaker: Nucorp Securities Litigation, U.S. District Court, Southern District of California, October 19, 1987, to April 22, 1988, reporter’s transcript.
Lerach comforted himself: William S. Lerach, interview by PD, January 14, 2008.
“put all its eggs”: Ronald Reagan, Executive Order 12287, Decontrol of Crude Oil and Refined Petroleum Products, January 28, 1981, Public Papers of the Presidents.
Reagan had decontrolled the price of oil: Ibid.
The jurors seemed attentive: Nucorp jury foreman Richard Bunch, interview by PD, July 28, 2008.
“These two really went at it”: Lawrence J. Irving, interview by PD, January 11, 2008.
Blackie v. Barrack: Blackie v. Barrack, U.S. Court of Appeals for the Ninth Circuit, September 25, 1975.
like a cheap wristwatch: Gary Rivlin, “The Man High Tech Would Love to Lynch,” Upside, November 1996.
sounded like common sense: Richard Bunch, interview by PD, July 28, 2008.
“Well, chumming is when”: Richard Keyes, M.D., “Modern Bank Fishing, Chum and Chuming,” Carp Anglers’ Group, 1992, online at http://www.carpangleresgroup.com/chumming.html.
Lerach felt a hard-earned exhilaration: William S. Lerach, interview by PD. January 14, 2008.
“In addition to the usual reasons”: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
“That’s a pretty logical”: Russell Colson, interview by PD, July 28, 2008. 153
Dick was born in Manhattan, Kansas: Michael Kinsman, “A Standout Litigator,” San Diego Union-Tribune, March 8, 2005.
an elderly victim: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
the personalities of the attorneys: Magistrate Judge Edward C. Voss, United States District Court, Arizona, “Trail Conduct and Decorum,” a memorandum. 155
“Lerach treated us like school kids”: Richard Bunch, interview by PD, July 28, 2008.
“We find against the plaintiffs”: Nucorp Securities Litigation, U.S. District Court, Southern District of California, reporter’s transcript.
“One hundred forty-five million!”: William S. Lerach, interview by PD, January 14, 2008.
CHAPTER 11: THE WITNESS FROM HELL
the drive northward: City of Del Mar Web site: http://www.delmar.ca.us/.
Lerach was not going home: William S. Lerach, interview by PD, January 15, 2008.
“heavyset jurors”: Ibid.
the confidential internal memo: Ibid.
Coughlin would join Milberg, Weiss: Patrick Coughlin, interview by PD, February 26, 2008.
“I began to get cynical”: William S. Lerach, interview by PD, February 24, 2008.
chance of being sued by shareholders: Wyatt Company, http://www.watsonwyatt.com/.
an even more contentious battle: Robert Lewis, interview by PD, February 28, 2008.
“You like Scotch, I hear.”: Ibid.
“We settled for around”: William S. Lerach, interview by PD, February 28, 2008.
the largest commercial litigation: Sarah B. Shields et al., v. Charles H. Keating Jr. et al., U.S. District Court, District of Arizona. No. 88-md-0551.
“I know who you are”: Lexecon v. Milberg Weiss Bershad Hynes & Lerach, U.S. District Court, Northern District of Illinois Eastern Division, March 1 to April 14, 1999.
“referral fund.”: William S. Lerach, interview by PD, October 29, 2007.
annual bonuses: United States v. William S. Lerach, sentencing hearing, February 11, 2008, reporter’s transcript.
“furtherance of arrangements”: United States v. Milberg Weiss Bershad & Schulman LLP, David Bershad, Steven G. Schulman, Seymour Lazar, and Paul T. Selzer, U.S. District Court for the Central District of California, May 18, 2006, testimony of Seymour Lazar.
Steven G. Cooperman: Myron Levin and Molly Selvin, “Divorce Sheds Light on Probe,” Los Angeles Times, August 7, 2005.
“Everything was totally”: Ibid.
“unprofessional conduct”: Carol Vogel, “The Art Market,” New York Times, August 7, 1992.
“You are like a cold, wet blanket”: Myron Levin and Molly Selvin, “Divorce Sheds Light on Probe.”
IPM Technology: William S. Lerach, interview by PD, February 29, 2008.
“I want to do business”: Ibid.
Newhall Land and Farming Company: Ibid.
Weiss flew to Los Angeles: Ibid.
a bonanza to prosecutors: U.S. v. Milberg Weiss Bershad & Schulman LLP, U.S. District Court for the Central District of California, May 18, 2006, testimony of Steven Cooperman.
their case against Lincoln Savings and Keating: Shields et al. v. Keating et al., U.S. District Court, Central District of California, June 1992.
a prize among the hundreds: Kevin P. Roddy, interview by PD, August 26, 2008.
That was Lerach’s hope: William S. Lerach, interview by PD, February 29, 2008.
tripling the award: On RICO laws, see U.S. Code, Title 18, Crimes and Criminal Procedure.
CHAPTER 12: A GIFT HORSE NAMED KEATING
“Well, you’re not going to be able”: William S. Lerach, interview by PD, October 15, 2008.
“We will not be blackmailed”: Ibid.
These were fortuitous developments: Michael Manning, interview by PD, October 16, 2008.
the potential whack-up: Ibid.
“We had them right”: Kevin Roddy to PD, August 26, 2008. 176
“They’re trying to taint you”: M. Laurence Popofsky, interview by PD, April 9, 2009. 176
“I just received a call”: Stephen Neal, interview by PD, October 22, 2008.
“Okay Dan”: Ibid.
“I’m not interested”: William S. Lerach, interview by PD, February
24, 2008.
“Nearly fifty deep-pockets”: Ibid.
Richard Mansfield Bilby: Wolfgang Saxon, “Richard Mansfield Bilby, 67, Judge in Charles Keating Case,” New York Times, August 14, 2008. 178
a lopsided somersault: William S. Lerach, interview by PD, February 24, 2008.
Arizona senator John McCain’s wife: Jerry Kamer and Andy Hall, “Kin’s Deals, Trips Reveal Close McCain-Keating Tie,” Arizona Republic, October 8, 1989.
Henry B. Gonzalez: Michael Barone, Almanac of American Politics, 1992 (Washington, D.C.: National Journal Group, 1991), pp. 1223–25.
“Up against the likes”: Hearing of the House Committee on Banking, Finance, and Urban Affairs, November 14, 1989, Federal Transcript Service.
“Mr. Keating and his coconspirators”: Ramona Jacobs, interview by PD, May 12, 2008.
“Are you ready to answer”: Dennis Cauchon, “Key Target Is Silent in S&L Probe,” USA Today, November 22, 1989.
“On the advice of counsel”: Jeff Weir, “Keating Takes the Fifth,” Orange County Register, November 22, 1989.
a three-page press release: Nathaniel C. Nash, “Savings Executive Won’t Testify and Blames Regulators for Woes,” New York Times, November 22, 1989.
“scapegoat”: Martin Crutsinger, “Wall Resigns Amid Controversy over Role in S&L Bailout,” Associated Press, December 4, 1989.
“One question, among the many”: Jonathan Lansner, “Keating Connections Kept Regulators at Bay,” Orange County Register, April 25, 1989. 181
“We’re going to get them”: William S. Lerach, interview by PD, February 24, 2008.
“How would you like”: Jon Cuneo, interview by PD, September 15, 2008.
Rea Luft: Ramona Jacobs, interview by PD, May 12, 2008.
“The man is a coward”: Quoted in Sam Stanton, “Snubbed S&L Victims,” Arizona Republic, January 31, 1990. 183
Alan Cranston: Ramona Jacobs, interview by PD, May 12, 2008.
“I have betrayed my family”: William S. Lerach, interview by PD, February 24, 2008.
“He looked very embarrassed”: Ramona Jacobs, interview by PD, May 12, 2008.
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