A lawyer who once organized class-action lawsuits against insurers and other companies has agreed to pay a $10 million fine and accept a sentence of up to 33 months in prison in connection with allegations that his firm paid many of the lead plaintiffs in the cases.
Melvyn Weiss, who was a lead partner at a firm once known as Milberg Weiss Bershad Hynes & Lerach L.L.P., New York, is the fourth lawyer who has admitted to criminal conduct in connection with the plaintiff-pay allegations, according to Thomas P. O’Brien, a U.S. attorney in Los Angeles.
Weiss agreed to plead guilty to a federal racketeering charge and to acknowledge that he and others concealed arrangements to pay the lead plaintiffs involved in about 225 class-action suits over more than 25 years, O’Brien says.
O’Brien says he will seek the maximum 33-month term.
Weiss’s lawyer, Benjamin Brafman, says the plea agreement gives the judge the discretion to substitute a period of home confinement or community confinement for up to half of any prison sentence.
“It is important for the public and legal community to note that despite his plea, Mr. Weiss provided access to the courts for millions of victims of corporate wrongdoing,” Brafman says.
Weiss issued a statement saying he regrets his conduct.
“I … apologize to all those who have been affected, including all of the wonderful and extremely talented lawyers and other employees of the firm, none of whom had any involvement in any wrongdoing,” Weis says in the statement.
Weiss’s firm, which has shortened its name to Milberg Weiss in recent years, now says Weiss is resigning. The firm is changing its name to Milberg L.L.P.
The firm, which has been indicted, says it “is now seeking to find a fair and appropriate resolution of remaining issues so that we can continue our work on behalf of injured investors and consumers,” noting that “last year, management of the firm was taken over entirely by partners who were neither engaged in nor aware of the wrongdoing.”
Milberg L.L.P. “apologizes to all judges, lawyers, clients and class members, who deserve full and complete adherence to all legal and ethical norms,” the firm says.
The firm now has about 70 attorneys. It continues to be one of the largest plaintiff class-action firms in the country.
One of the lawyers at the firm, Paul Selzer, continues to be a defendant in the case.
Lerach, who pleaded guilty last year to a conspiracy charge, was sentenced in February to 2 years in federal prison.
Schulman and Bershad are scheduled to be sentenced later this year.