No Charges Against Lawyers Seen

After a five-year investigation, federal prosecutors have told prominent plaintiffs lawyers William S. Lerach and Melvyn Weiss that they do not face charges based on evidence that has emerged so far, a person close to the case said Tuesday.

However, the U.S. attorney’s office in Los Angeles left open the possibility that other lawyers who worked with Lerach and Weiss could be indicted within weeks, the person said.

Prosecutors also could charge Milberg Weiss Bershad & Schulman, the New York-based firm where the two men worked until Lerach formed his own firm in 2004.

The person close to the case, speaking on condition of anonymity because of the confidentiality of conversations between lawyers, said Lerach and Weiss could still face charges if new evidence of wrongdoing emerged.

The case, in which two people already have been indicted, centers on allegations of a conspiracy dating to the 1980s to pay kickbacks to plaintiffs in class-action lawsuits brought by investors against public companies. Lerach, who is based in San Diego, is the most prominent among plaintiffs attorneys specializing in these securities-fraud suits.

In a statement Tuesday, Milberg Weiss said one focus of the investigation was referral fees, which the firm called “a common and appropriate practice.”

The firm said that as a result of the probe, it had examined its internal controls on such fees and hired a former prosecutor, Bart M. Schwartz, to examine the controls and recommend improvements if needed.

Lerach and Milberg didn’t return calls. Weiss’ attorney, Benjamin Brafman, couldn’t be reached and Lerach’s lawyer, John W. Keker, declined to comment. Assistant U.S. Atty. Richard Robinson, a prosecutor assigned to the case, also declined to comment. Lerach’s new firm, Lerach Coughlin Stoia Geller Rudman & Robbins, didn’t return calls.

An indictment unsealed in June accused Palm Springs attorney Seymour M. Lazar of receiving $2.4 million in illegal kickbacks in exchange for serving -- or persuading his family members to serve -- as lead plaintiff in more than 50 class actions. Also named as a defendant and co-conspirator was another lawyer, Paul T. Selzer, 64, who was accused of funneling the funds to Lazar. Both have pleaded not guilty.

Many in the legal community told the Los Angeles Times, however, that the allegations made clear that the real targets were Lerach and his former firm, Milberg Weiss.

Times staff writer Myron Levin contributed to this report.