[JURIST] Milberg Weiss [firm website] partner and co-founder Melvyn Weiss [firm profile] pleaded not guilty Monday to federal charges of conspiracy, racketeering, obstruction of justice and making false statements. Weiss was indicted [JURIST report] last month and said at that time that he would remain of counsel to the firm [statement] while defending himself against the charges, but that he had relinquished his management duties. The indictment stems from a long-running US Attorney investigation into allegations that Milberg Weiss paid up to $11.3 million in illegal kickbacks since 1984 to individuals to serve as lead plaintiffs in class action and shareholder derivative lawsuits. Co-defendant and plaintiff Seymour Lazar also pleaded not guilty Monday to four counts of money laundering, while his attorney Paul Selzer pleaded not guilty to four counts of money laundering and one count of conspiracy to launder money.

In May 2006, a federal grand jury indicted [PDF text; JURIST report] the firm and two former name partners, David J. Bershad and Steven G. Schulman, on charges of obstructing justice and conspiracy to make false statements. 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. 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 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. AP has more.