Milberg law firm says it will pay $75M to settle case
By Greg Risling, Associated Press Writer
Rocky Mountain News
Tuesday, June 17, 2008
LOS ANGELES (AP) -- The Milberg law firm will 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 in a prepared statement Monday the deal called for the
government to dismiss all charges against it.
attorney's office in
Los Angeles, which is handling the case,
declined immediate comment.
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
Then known as Milberg Weiss, the firm dominated the industry in
securities class-action lawsuits, which involve shareholders who
claim they suffered losses because executives misled them about
a company's financial condition.
The deal was disclosed in a statement by Sanford Dumain, a
member of the firm's executive committee.
"This settlement enables us to move forward with our continuing
representation of investors and consumers in class actions and
other important lawsuits, and allows us to capitalize on the
tremendous talents of the lawyers at the firm," he said.
The firm will make payments to the government totaling $75
million over the next five years, the statement said.
Dumain said the firm risked having to pay forfeitures and
penalties of hundreds of millions of dollars if the criminal
case had gone forward.
"We wanted to avoid that enormous risk, which we faced solely
because of the misconduct of certain of our partners who are no
longer with the firm," he said.
As part of the settlement, the firm said it retained a
compliance monitor to ensure there are no problems with future
A seven-year investigation has resulted in guilty pleas by three
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 announced Monday came two weeks after attorney
Melvyn Weiss, the firm's co-founder, 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 making 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 in August.