New York law firm Milberg Weiss Bershad & Schulman has defended its position after the firm was implicated in a lawsuit against a retired Californian lawyer accused of receiving at least $2.4m (£1.3m) in illegal kickbacks from the firm.
Milberg Weiss, one the most aggressive plaintiffs’ law firms in the US, is not a defendant in the indictment and is not named anywhere in the 70-page document, but the firm has confirmed that it is the “New York law firm” referred to in the document.
The indictment alleges that the defendant, Seymour Lazar, and members of his family received illegal payments of part of the firm’s legal fees for serving as plaintiffs in more than a dozen class action and shareholder derivative action lawsuits filed by Milberg Weiss over a period of 20 years.
It further alleges that the money was frequently funnelled through a second defendant, Paul Selzer, a lawyer in Palm Beach.
In a statement, Milberg Weiss said: “Although the indictment does not name Milberg Weiss, it unfairly implicates the firm in the wrongdoing alleged against Lazar. We are outraged that these allegations have been made against the firm and reject them as baseless.”
The firm also stated that it “has cooperated with the government’s investigation, which has continued for more than three years”.
US federal prosecutors offered a glimpse of the broader ongoing investigation in the indictment against Lazar and Selzer, which was filed in the Federal Court in Los Angeles.
As part of this, it is understood that Milberg Weiss is being investigated for alleged fraud, conspiracy and kickbacks in dozens of securities lawsuits and could face criminal charges against the firm itself and its principles.
Lazar’s legal representative, white-collar crime specialist Thomas Bienert, called the prosecution of Lazar “misguided” and warned that the US government could try to pressure Lazar to testify in the broader criminal investigation of Milberg Weiss.
The investigation relates to when the firm was known as Milberg Weiss Bershad Haynes & Lerach, before it split last year to form Milberg Weiss Bershad & Schulman in New York and Lerach Coughlin Stoia Geller Rudman & Robbins in San Diego.
Both firms are understood to be under scrutiny as federal investigators try to determine whether senior partners at either firm were aware of the alleged scheme with Lazar.
Milberg Weiss would not comment further. Lerach Coughlin declined to comment.