Class action plaintiff pleads guilty in Milberg Weiss kickback scheme

[JURIST] Seymour Lazar pleaded guilty Thursday to obstruction of justice, subscribing to a false tax return and making a false declaration for his role in the Milberg Weiss [firm website] kickback scheme where the firm is accused of paying up to $11.3 million in illegal kickbacks since 1984 to individuals, including Lazar, to serve as lead plaintiffs in class action and shareholder derivative lawsuits. Lazar, now 80, was indicted [text, PDF; JURIST report] in May 2006 along with the firm, then known as Milberg Weiss Bershad & Schulman, and former name partners David J. Bershad and Steven G. Schulman. Lazar will pay a $600,000 fine, forfeit $1.5 million, and could face up to 18 years in federal prison. Prosecutors say that they will seek home detention because of Lazar's failing health. The former attorney received approximately $2.6 million to serve as the lead plaintiff in numerous class action suits, according to prosecutors.

As part of the scheme, certain individuals agreed to serve as class action representatives in exchange for 10 percent of the attorney fees eventually gathered by Milberg Weiss. This kickback was not revealed to the judge overseeing litigation, and the named plaintiffs who collected the kickback money made false statements under oath concerning the payments. Three individuals pleaded guilty [JURIST report] in connection with the scheme in May 2006, and former Milberg Weiss name partner David Bershad pleaded guilty [JURIST report] to conspiracy charges in July. The firm pleaded not guilty [JURIST report] in July. Last month, Schulman agreed to plead guilty to racketeering, and to forfeit $1.85 million and pay a $250,000 fine. Another former Milberg Weiss partner, William S. Lerach, reached an agreement with prosecutors last month to plead guilty [press release; JURIST report] to conspiracy to obstruct justice and will forfeit $7.75 million to the government, pay a $250,000 fine, and will serve one to two years in prison. Milberg Weiss co-founder Melvyn Weiss pleaded not guilty [JURIST report] earlier this week to conspiracy, racketeering, obstruction of justice and making false statements. AP has more.

 

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