Milberg says it will pay $75 million to settle case
The Milberg law firm said Monday that it agreed to pay $75 million to settle a federal kickback case involving class-action lawsuits against some of the nation’s biggest corporations.
The New York firm said the deal called for the government to dismiss all charges against it. The U.S. attorney’s office in Los Angeles, which is handling the case, declined to comment immediately.
The firm was accused of making $250 million over two decades by filing legal actions on behalf of professional plaintiffs who received $11.3 million in kickbacks.
The firm was charged with aiding and abetting mail fraud and money-laundering conspiracy. A trial had been expected to start in August.
The deal was disclosed in a statement by Sanford Dumain, a member of the firm’s executive committee.
Then known as Milberg Weiss, the firm dominated the industry in securities class-action lawsuits, which involve shareholders who claim that they suffered losses because executives misled them about a company’s financial condition.
A seven-year investigation has resulted in guilty pleas by three former partners.
The scheme allowed attorneys at the firm to be among the first to file litigation and secure the lucrative position as lead plaintiffs’ counsel, according to court documents.
The lawsuits targeted companies such as AT&T; Inc., Lucent, WorldCom, Microsoft Corp. and Prudential Insurance.
The settlement came two weeks after attorney Melvyn Weiss, co-founder of the Milberg Weiss firm, was sentenced to 30 months in prison for helping orchestrate the kickback scheme.
U.S. District Judge John F. Walter also ordered Weiss, 72, to pay $9.7 million in forfeitures and $250,000 in fines.
Weiss pleaded guilty to a racketeering conspiracy charge in April as part of an agreement with prosecutors.
Former partner William Lerach recently began serving a two-year prison sentence after pleading guilty to one count of conspiracy to obstruct justice and make false statements.
Former partner Steven Schulman pleaded guilty to a racketeering conspiracy charge, and David Bershad pleaded guilty to conspiracy. Both are scheduled to be sentenced later this year.
The lone remaining defendant is attorney Paul T. Selzer. His trial is expected to begin in August.