Federal prosecutors indicted Milberg Weiss co-founder Melvyn Weiss Sept 20 for his alleged role in paying millions of dollars in kickbacks to people to serve as named plaintiffs in class actions. The scheme allegedly put $250 million in fees into Milberg Weiss' pockets.

According to the indictment, which charges Weiss with several counts of racketeering conspiracy, conspiracy and obstruction, Weiss had “substantial control over the management and conduct of Milberg Weiss's business affairs” and “possessed the authority to veto any proposed action or decision affecting the operation or management of Milberg Weiss.”

The indictment accuses Weiss of telling another partner in August 1979 that he had entered into an arrangement to pay a plaintiff 10 percent of attorneys' fees. Prosecutors also named that plaintiff, Seymour Lazar, in the indictment along with other plaintiffs who received a portion of attorneys' fees to serve as plaintiffs.

In another incident outlined in the indictment, former senior partner David Bershad in the early 1980s told Weiss such a scheme was illegal, and Weiss allegedly allayed his concerns by telling him the payments were being made in cash, there was no paper trail and as such there was “little risk they would ever be caught.”

Also named along with Weiss were previously indicted Milberg Weiss former senior partners William Lerach, who pleaded guilty just days earlier; Bershad, who pleaded guilty in July; and Steve Schulman, who pleaded guilty to a racketeering charge the same day Weiss was indicted. As part of their plea deals, Bershad and Schulman agreed to cooperate with prosecutors. Three unidentified partners are also accused of participating in the scheme, as are lawyers from other firms who allegedly helped facilitate the payments and their concealment.

“Mr. Weiss has decided to discontinue his participation in [Milberg Weiss] management in order to focus on the defense of charges against him,” Milberg Weiss said in a Sept. 19 statement announcing Weiss' indictment. “…We do not anticipate any interruption in our work and we look forward to putting this difficult period behind us.”

Federal prosecutors indicted Milberg Weiss co-founder Melvyn Weiss Sept 20 for his alleged role in paying millions of dollars in kickbacks to people to serve as named plaintiffs in class actions. The scheme allegedly put $250 million in fees into Milberg Weiss' pockets.

According to the indictment, which charges Weiss with several counts of racketeering conspiracy, conspiracy and obstruction, Weiss had “substantial control over the management and conduct of Milberg Weiss's business affairs” and “possessed the authority to veto any proposed action or decision affecting the operation or management of Milberg Weiss.”

The indictment accuses Weiss of telling another partner in August 1979 that he had entered into an arrangement to pay a plaintiff 10 percent of attorneys' fees. Prosecutors also named that plaintiff, Seymour Lazar, in the indictment along with other plaintiffs who received a portion of attorneys' fees to serve as plaintiffs.

In another incident outlined in the indictment, former senior partner David Bershad in the early 1980s told Weiss such a scheme was illegal, and Weiss allegedly allayed his concerns by telling him the payments were being made in cash, there was no paper trail and as such there was “little risk they would ever be caught.”

Also named along with Weiss were previously indicted Milberg Weiss former senior partners William Lerach, who pleaded guilty just days earlier; Bershad, who pleaded guilty in July; and Steve Schulman, who pleaded guilty to a racketeering charge the same day Weiss was indicted. As part of their plea deals, Bershad and Schulman agreed to cooperate with prosecutors. Three unidentified partners are also accused of participating in the scheme, as are lawyers from other firms who allegedly helped facilitate the payments and their concealment.

“Mr. Weiss has decided to discontinue his participation in [Milberg Weiss] management in order to focus on the defense of charges against him,” Milberg Weiss said in a Sept. 19 statement announcing Weiss' indictment. “…We do not anticipate any interruption in our work and we look forward to putting this difficult period behind us.”