The face of bribery, lying and deceit

The prominent lawyer Melvyn I. Weiss of the Milberg Weiss law firm, a prolific filer of lawsuits against publicly held corporations, has reached a plea agreement with federal prosecutors in Los Angeles, according to his defense lawyer.
According to a statement released Thursday by the defense lawyer, Benjamin Brafman, Mr. Weiss will plead guilty to participating in a criminal conspiracy to pay a share of legal fees to plaintiffs in shareholder suits brought by Milberg Weiss. Such kickbacks are improper because they give plaintiffs representing a class of all shareholders an incentive to accept a deal that might not be best for the class.

Under the terms of the plea agreement, Mr. Weiss faces a sentence of up to 33 months in prison. Mr. Weiss has also agreed to pay a total of $10 million in fines and penalties, according to the statement.

He was indicted in September on charges including conspiracy, obstruction of justice and making false statements, in a broad-ranging indictment that also named Seymour M. Lazar, an investor who served as a frequent plaintiff in shareholder litigation filed by Mr. Weiss’s firm; Paul T. Selzer, a Palm Springs, Calif., lawyer who advised Mr. Lazar; and the New York law firm of Milberg Weiss itself. The indictment charged that over a period of more than 25 years, Mr. Weiss and other lawyers at his firm improperly paid the kickbacks to plaintiffs in class actions and shareholder derivative actions.

Although the plea agreement would resolve the criminal case against Mr. Weiss, his former firm remains a defendant. However, the firm announced Thursday that it had changed its name to Milberg and that Mr. Weiss was resigning from his position. The firm has already shrunk, from hundreds of lawyers to about 70.

“The firm 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,” said Sanford Dumain, a member of the executive committee of Milberg Weiss, said in a statement on Thursday.

In the statement, Mr. Dumain said: “Last year, management of the firm was taken over entirely by partners who were neither engaged in nor aware of the wrongdoing. None of the lawyers or staff remaining at the firm has ever been implicated in this misconduct. More than two years ago, as the issues were coming to light, the firm, under the guidance of current management, implemented state-of-the-art compliance procedures regarding case starting and referral fees to help ensure that past problems would not occur again.”Mr. Weiss’s longtime partner and later rival in the shareholder litigation business, William S. Lerach, in October pleaded guilty to a charge of conspiracy to obstruct justice and was sentenced last month to two years in prison.