Man Pleads In Class Action Kickback Case

A man accused of accepting kickbacks from a prestigious New York law firm in exchange for being a plaintiff in class-action lawsuits has agreed to plead guilty to obstruction of justice and two other charges, prosecutors said Wednesday.

Seymour Lazar, 80, of Palm Springs, will enter his pleas Thursday in federal court, the U.S. attorney's office said.

Besides obstruction of justice, Lazar agreed to plead guilty to one count each of subscribing to a false tax return and making a false declaration to the court, prosecutors said.

Lazar is the latest person to plead guilty in a seven-year federal investigation that accuses the Milberg Weiss law firm, previously known as Milberg Weiss Bershad & Schulman, of secretly paying $11.3 million in kickbacks to get people to take part in more than 225 class-action and shareholder lawsuits targeting major corporations.

Prosecutors believe the firm made an estimated $250 million by filing the lawsuits.

Among those who have pleaded guilty are former partners Steven Schulman and David Bershad, and top attorney William Lerach.

Firm co-founder Melvyn Weiss has been indicted on two counts of conspiracy and one count each of obstruction of justice and making false statements.

Weiss, 72, pleaded not guilty to the charges Monday. If convicted of all four counts, he faces a maximum sentence of 40 years in prison. He remained free after posting a $1.5 million bond.

Lazar was initially indicted on more than a dozen charges, including money laundering, conspiracy and mail fraud. Prosecutors said they will move to drop the remaining charges against Lazar after he is sentenced.

The indictment said Lazar "frequently served" as a plaintiff in lawsuits filed by the firm and received about $2.6 million between 1976 and 2004, according to the indictment.

He could face up to 18 years in prison after he pleads guilty, but one of his attorneys, Tom Bienert, has said he doesn't believe his elderly client will have to serve any time behind bars.

Bienert declined further comment.

Milberg Weiss has sued some of the nation's largest companies, including Lucent, Microsoft, Prudential Insurance and AT&T.

Weiss and top lawyers dominated the industry in securities class-action lawsuits, which involves shareholders who claim they suffered losses because executives misled them about a company's financial condition.

The firm also has been charged in the case and pleaded not guilty Monday to one count each of conspiracy, mail fraud, money laundering and obstruction of justice contained in a revised indictment.

Schulman, 56, pleaded guilty last week to a racketeering conspiracy charge. He agreed to forfeit $1.85 million to the government and to pay a $250,000 fine. He is awaiting sentencing.

Bershad also has pleaded guilty to conspiracy and agreed to cooperate with the government. He will be sentenced early next year.

Lerach has agreed to plead guilty to conspiring to obstruct justice and making false statements under oath, prosecutors said. He will forfeit $7.75 million to the government, pay a $250,000 fine and accept a sentence ranging from one year to two years in federal prison, prosecutors said.

He resigned last month from the firm he founded in San Diego, now known as Coughlin Stoia Geller Rudman & Robbins.