Prosecutors say ex-expert witness will plead guilty to perjury

From The Associated Press

LOS ANGELES—John B. Torkelsen, who made tens of millions of dollars as an expert witness in hundreds of business lawsuits, agreed to plead guilty to a perjury charge for lying about how he was paid in a securities class-action case, prosecutors said.

Torkelsen entered the plea agreement Thursday in a federal court in Philadelphia and could face up to five years in prison. The case was filed by prosecutors in Los Angeles. Torkelsen, 62, of Princeton, N.J., agreed to plead guilty to submitting a false declaration in a case filed in 1999 in a federal court in San Jose, prosecutors said.

A message left Friday for Bryan Daly, Torkelsen's attorney, was not immediately returned.
Among other things, the case against him involves an alleged illegal contingency deal with a New York law firm.

A statement released by prosecutors did not name the firm but it was identified as Milberg, Weiss by the Los Angeles Daily Journal, which cited unnamed attorneys familiar with the matter.

Milberg, Weiss and some of its partners have been accused of drumming up lucrative business by paying $11.3 million in kickbacks to people who became plaintiffs in lawsuits targeting major companies such as AT&T and Microsoft. Seven people have pleaded guilty in that case.

Torkelsen appeared as an expert witness for plaintiffs in hundreds of class-action and shareholder lawsuits. He submitted more than $60 million in bills between 1993 and 1996,
prosecutors said.

But in a court appearance last November, the man who once arrived at court in a chauffeured limousine said he was out of money. According to the plea agreement, Torkelsen unlawfully reached fee-shifting deals with several law firms that allowed them to avoid $7 million in fees.

Law firms that hired Torkelsen told the various courts that he was an independent expert and by law could not be paid based on the result of a case, prosecutors said.

But law firms secretly paid Torkelsen on a contingency basis and he concealed the arrangement from the courts, prosecutors said.

Normally, a law firm will pay an expert witness even if it loses a case, but Torkelsen was accused of submitting inflated bills only in successful cases, meaning the defendants paid him.

Torkelsen already is serving a five-year federal sentence in West Virginia in an unrelated case for defrauding the U.S. Small Business Administration.