Federal prosecutors have told two partners at a leading New York class-action law firm to prepare to be indicted on charges stemming from an investigation into alleged illegal payments to plaintiffs in securities lawsuits, a lawyer involved in the case said yesterday.

Facing indictment are David Bershad and Steven Schulman of Milberg Weiss Bershad Schulman LLP, according to an attorney for Mr. Schulman, Edward Hayes. He said he was informed that criminal charges could also be brought against the firm itself.

“They’re talking about a Rico case against the firm,” Mr. Hayes said, referring to the federal Racketeering Influenced and Corrupt Organizations act.

A spokeswoman for Milberg Weiss declined to comment yesterday, but an attorney for the firm told the Wall Street Journal this week that the firm had not been advised that an indictment was forthcoming.

The expected prosecution is also causing political sparks, with some charging the Bush administration with a political vendetta and others claiming that Democratic officials shirked their duties while collecting campaign contributions from the attorneys caught up in the probe.

Mr. Hayes said he believes that one factor fueling the investigation may be the business community’s deep-seated enmity toward Milberg Weiss, which is one of the best-known and most feared class-action firms in America.

“What makes me uncomfortable is the fact that all of the big corporations hate these guys. Sometimes their lawsuits are meritless but a lot of the time, they’re not,” Mr. Hayes said. “It appears they’re stretching to make a case where the politicians who appoint these U.S. attorneys want to lock these guys up. The case is a stretch.”

However, Mr. Hayes acknowledged that the political pressures might also have influenced other prosecutors not to look into the allegations. “It may be that their political allies turned their faces away at a certain point in time and it may be that their political enemies are now taking a different point of view,” he said.

A spokesman for prosecutors on the case, Thom Mrozek, declined to comment yesterday, leaving unclear the details of the charges being sought against Messrs. Bershad and Schulman. However, two California attorneys with ties to Milberg Weiss, Seymour Lazar and Paul Selzer, were indicted in Los Angeles last year on money laundering and fraud charges. Mr. Lazar and his family members served as plaintiffs in dozens of securities lawsuits filed by Milberg Weiss. The Los Angeles indictment, which did not charge Milberg Weiss, alleged that millions of dollars in illegal payments flowed to Mr. Lazar with the help of Mr. Selzer, who served as his personal attorney. Both men have pleaded not guilty and are free pending trial.

Even as prosecutors have signaled that they plan to seek more indictments, they have advised two of the biggest figures in the class-action bar, Melvyn Weiss and William Lerach, that they will not be indicted at this point, according to lawyers involved in the case. Mr. Weiss is the lead partner at Milberg Weiss. In 2004, Mr. Lerach and dozens of other lawyers split from the firm to start a new San Diego-based practice, now known as Lerach Coughlin Stoia Geller Rudman & Robbins LLP.

An indictment of the Milberg Weiss firm could jeopardize its viability, regardless of whether the government ultimately wins a plea or conviction. “They do so much work that requires them to be appointed as lead counsel acting in the public interest by a court. It would be a mess,” a lawyer for Mr. Selzer, David Weichert, said.

Papers filed in connection with the criminal case pending in Los Angeles suggest that payments from Milberg Weiss did end up benefiting Mr. Lazar. One question key to the prosecution is who, if anyone, at Milberg Weiss, knew that Mr. Lazar was getting some of the legal fees paid to Mr. Selzer.

“My clients say what went on, if it went on, was not their business,” Mr. Hayes said. “To what extent are our people obligated to supervise people on the other side of the table? That’s a debatable issue.”

Over the past decade, Milberg Weiss and its attorneys have been among the most loyal financial supporters of the Democratic Party and Democratic candidates. Shortly before such donations were banned in 2002, the firm gave more than $1 million to national Democratic Party committees. New York Attorney General Eliot Spitzer has received more than $100,000 from the firm and its attorneys, including $20,000 from the firm just last month for his gubernatorial campaign.

A spokesman for the New York Republican Party, Ryan Moses, said Mr. Spitzer should refund the donations and focus on the alleged wrongdoing by the firm.

“Kickbacks and securities fraud are exactly the stuff Spitzer should be investigating but why didn’t he, in this case, follow the money?” Mr. Moses asked. “He should give the money back.”

A spokesman for Mr. Spitzer’s campaign did not return a call seeking comment for this story.

Milberg Weiss and its lawyers have also, on occasion, supported Republican candidates, such as Governor Pataki. In 2002, the firm gave $2500 to the New York Senate Republican Campaign Committee. Also that year, the firm made a $100,000 contribution to Alan Hevesi a week before Mr. Hevesi, a Democrat, won the election for state comptroller.

A law professor critical of class-action suits, Lester Brickman of Yeshiva University, said the claim that the prosecution is politically motivated was to be expected. “It’s not surprising that they raise that argument. Anyone in their position would do so,” he said.

Mr. Brickman also said the prosecutors’ apparent decision not to charge Messrs. Weiss or Lerach was no guarantee they would escape prosecution altogether. “As the matter plays out, it is not implausible that other indictments might ensue,” the professor said.

The indictment filed last year says repeatedly that the payments that allegedly flowed to Mr. Lazar were illegal. However, several lawyers with no ties to the prosecution said yesterday that they were not confident in the truth of that assertion, which is central to the prosecution.

A Philadelphia attorney who has written treatises on legal ethics, Lawrence Fox, said that sharing a referral fee with a client violates legal canons but is not, per se, a violation of the law. “That rule is simply a rule of discipline. It does not have any criminal implications,” he said.

The indictment argues that Mr. Lazar committed fraud and obstructed justice by failing to disclose to courts hearing the securities lawsuits the fact that he was to be paid money out of the legal fees in the cases.

Mr. Fox said if that took place lawyers involved in the cases may have violated ethical precepts. “I’d again say it’s more of a disciplinary problem,” he said. “I don’t get anywhere criminal there.”