Weiss of Milberg Weiss Enters Guilty Plea in Deal

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The New York Sun

LOS ANGELES — The 48-year legal career of one of America’s most prominent class-action lawyers, Melvyn Weiss, came to an ignominious end in a federal courtroom here yesterday as he pleaded guilty to conspiring to obstruct justice by hiding secret payments his law firm, Milberg Weiss LLP, made to plaintiffs in securities lawsuits.

Flanked by his defense attorney, Benjamin Brafman, Weiss, 72, stood for more than half an hour at a lectern as Judge John Walter asked questions about whether the veteran trial lawyer was freely and willingly giving up his rights to a trial.

When Judge Walter finally asked Weiss for his plea, he replied, “Guilty, your honor.”

In a plea bargain, prosecutors and the defense agreed that Weiss will be sentenced to between 18 and 33 months in prison. He will also pay the government $10 million in fines and forfeiture.

Judge Walter said he has not yet decided whether to accept the proposed sentencing range, but he said that if he thought a longer sentence was merited, Weiss would be allowed to withdraw the guilty plea and go to trial. Sentencing was set for June 2.

The 35-minute hearing featured a prosecutor, Douglas Axel, reading a lengthy recitation of the agreed facts of the case. Mr. Axel described a conspiracy which spanned 25 years or more and involved filing false statements with a variety of federal courts. The prosecutor said Weiss helped his firm maintain a proprietary stable of investor-plaintiffs by personally paying a Florida-based litigant in cash and another from California by check. Milberg Weiss is based in New York.

Three other former named partners at Milberg Weiss, William Lerach, David Bershad, and Steven Schulman, entered guilty pleas earlier in the case. Judge Walter sentenced Lerach to two years and $8 million in penalties. Many analysts expect Weiss to get the full 33 months allowed under his plea. Bershad and Schulman are awaiting sentencing.

The only hiccup yesterday came when Judge Walter asked if Weiss had committed all the acts the prosecutor described. Weiss demurred briefly to confer with his attorney.

Weiss indicated that he wasn’t directly involved in every payoff mentioned, but that he knew what was happening. “I take responsibility for everything that’s in this document, your honor. My direct participation in each one differed,” he said.

Judge Walter also warned Weiss that by pleading guilty to a felony he could lose his right to vote and to run for office, but perhaps most importantly, he would be giving up his law license. “I understand all of that, your honor,” Weiss said.

Weiss, clad in a dark-blue pinstripe suit, seemed relaxed and at easethroughoutthehearing. When the judge asked Weiss if he had discussed possible defenses with Mr. Brafman, Weiss flashed a bit of humor by replying with a hint of exasperation, “Exhaustively.”

The trailblazing class-action lawyer, who rarely passed up an opportunity to inveigh against corporate corruption, shook hands with reporters as he left the courtroom. However, Mr. Brafman said Weiss would have no comment beyond reissuing a statement he put out last month apologizing for his conduct and saying that he hoped his firm would be able to carry on without him.

Mr. Brafman said in a written statement that he hoped the judge’s ultimate sentence will take into account Weiss’s record of generosity to charitable causes, as well as his pro bono legal work for Holocaust victims and others. “Despite his participation in the criminal conduct he has today acknowledged, Mel Weiss is nevertheless one of the true legal giants of his generation and a consummate humanitarian whose contributions to the bar and the world community have been nothing short of spectacular,” the defense lawyer said.


The New York Sun

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