Matt Byrne, New York
The former head of Milberg Weiss Bershad & Shulman (now known as Milberg), Melvyn Weiss was sentenced to 30 months in prison today (Monday 2 June) for his role in a kickbacks scheme relating to securities class action cases.
The sentence is just three months off the maximum requested by prosecutors and a year longer than the minimum (18 months) sought by Weiss’ defence team.
In April, Weiss pleaded guilty to a racketeering conspiracy charge as part of an agreement with prosecutors.
Today, along with the prison sentence, Weiss was also ordered by US district judge John Walter to pay $9.7m in forfeitures and $250,000 in fines.
Weiss apologised for what he described as his “wrongful conduct”, adding, “I promise you my contrition is profound and genuine”.
Weiss’ firm was indicted in 2006 May by Los Angeles federal prosecutors for allegedly paying referral fees to named plaintiffs in shareholder lawsuits.
According to government filings, Weiss personally profited to the tune of $210m over more than 20 years by filing legal actions on behalf of professional plaintiffs who in turn received millions in kickbacks.
Fellow name partners, David Bershad and Steven Schulman were also indicted along with Weiss in 2006, both pleading guilty.
In February this year, another former Milberg partner, the high-profile Bill Lerach was sentenced to two years in prison after pleading guilty to a felony conspiracy.
Weiss’ former firm is believed to be working towards a settlement deal with a fine expected in the region of $75m.
Milberg did not return calls for comment.
Readers' comments (3)
Anon. | 3-Jun-2008 10:03 am
Justice?
Am I missing something? Weiss' punishment is to spend less than three years in jail and pay back just over $10m? For a crime that made him $210m? If the average man in the street were offered two and half years in a low security jail in exchange for $200m, a lot of them would take it gladly. Weiss has gotten off ridiculously easy.
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Anonymous | 3-Jun-2008 10:05 am
Re: Justice?
Must have had a good lawyer...
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Anonymous | 3-Jun-2008 10:09 am
Weiss' punishment
Whether its with racketeers, drug dealers or crooked lawyers, the emphasis should always be on the guilty party to prove that any wealth wasn't the proceeds of his or her crime rather than on the authorities to prove that it was.
Weiss should have most of his wealth seized and the onus should be on him to get it back, not the other way round.
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