Letter of Apology » Racketeering

Final Milberg Defendant Pleads Guilty

Dave Westheimer — Tue, 15 Jul 2008 06:22:02 +0000

Attorney Paul Seltzer on Monday became the final Milberg Weiss (now Milberg LLP) defendant to plead guilty in the racketeering and money laundering case against the firm and its former principals. Seltzer pleaded guilty before US District Judge John Walter in Los Angeles to one count of corruptly endeavoring to obstruct the IRS code. He admitted accepting almost $50,000 from the firm and failing to tell the IRS that he transferred $19,000 of it to Seymour Lazar, the convicted dummy plaintiff in many of Milberg’s class action ~~shakedowns~~ suits. Sentencing is scheduled for November 3. Seltzer faces a statutory maximum of three years in prison but prosecutors will recommend probation (AP/San Jose Mercury News).

Milberg Settles Criminal Case

Dave Westheimer — Tue, 17 Jun 2008 05:54:51 +0000

The law firm now known as Milberg LLP reached a non-prosecution agreement on Monday with the DOJ which settles the criminal charges against the firm. The former Milberg Weiss Bershad & Schulman LLP was indicted in 2006 on counts including conspiracy, racketeering, mail fraud, money laundering and filing false tax returns. Milberg admitted wrongdoing by its former principals Melvyn Weiss, William Lerach, David Bershad and Steven Schulman involving illegal kickbacks paid to class action plaintiffs in 165 cases over 25 years and agreed to pay $75 million in fines. The government said it believed that no current partners engaged in or knew about the illegal scheme.

Milberg also admitted llegally paying class action expert witness John Torkelsen on a contingency basis and paying kickbacks to several stockbrokers who referred clients to serve as plaintiffs. The firm also agreed to compliance monitoring for two years (NY Law Journal, DOJ via LawFuel).

Weiss Sentenced To 30 Months In Prison

Dave Westheimer — Mon, 02 Jun 2008 22:32:02 +0000

Melvyn Weiss, pioneer of shareholder class action lawsuits and former name partner of the firm now known as Milberg LLP, was sentenced today to 30 months in prison by US District Judge John Walter in Los Angeles. In March Weiss agreed to plead guilty to a single count of racketeering, admitting that he engaged in a pattern of racketeering activity covering the period of 1979 to 2005 by paying kickbacks to plaintiffs (earlier). He must report to prison by August 28 (Bloomberg, AP).

More On Weiss Plea: “Fraud In Pursuit of Fraud”

Dave Westheimer — Fri, 21 Mar 2008 07:04:24 +0000

Melvyn Weiss has agreed to plead guilty to a single racketeering count, specifically that he engaged in a pattern of racketeering activity covering at least the period of 1979 to 2005. Weiss admits to multiple instances of kickbacks to plaintiffs and agrees to serve a sentence of 18 to 33 months in prison and to forfeit $10 million. He shortly will formally plead guilty before US District Judge John Walter in Los Angeles and prosecutors will ask for the 33-month maximum.

The firm, which will now be known as Milberg LLP, still faces criminal charges. The New York Times story here quotes from statements released by Weiss and the firm, and contains this observation from Stanford law professor Joseph Grundfest, a former SEC commissioner: “It’s a situation where it appears that there has been fraud in pursuit of fraud. And just like mom explained that two wrongs don’t make a right, it follows both that corporate executives shouldn’t lie and the lawyers suing them shouldn’t steal. What’s complicated about that?”

Weiss Plea Agreement USAO Press Release on Weiss