Los Angeles man pleads guilty to obstruction of justice and two other charges

A man who got about $2.6 million (1.82 million EUR) from a prestigious New York law firm in exchange for being a plaintiff in class-action lawsuits targeting major corporations pleaded guilty on Thursday to obstruction of justice and two other charges.

Photo: Los Angeles man pleads guilty to obstruction of justice and two other charges

After reaching a plea deal, Seymour Lazar, 80, appeared before U.S. District Court Judge John Walter. He also pleaded guilty to one count each of subscribing to a false tax return and making a false declaration to the court.

Lazar faces up to 18 years in federal prison.

"He does take full responsibility for his actions," said his attorney, Thomas Bienert.

Lazar was the latest person to plead guilty in a seven-year federal investigation that accuses the firm, previously known as Milberg Weiss Bershad & Schulman, of secretly paying $11.3 million (7.9 million EUR) in kickbacks to get people to take part in more than 225 class-action and shareholder lawsuits.

Prosecutors believe the firm now known as Milberg Weiss made an estimated $250 million (174.84 million EUR) by filing lawsuits against some of America's largest companies, including Lucent, Microsoft, Prudential Insurance and AT&T.

Among those who have pleaded guilty are former partners Steven Schulman and David Bershad, and top attorney William Lerach.

Firm co-founder Melvyn Weiss has been indicted on two counts of conspiracy and one count each of obstruction of justice and making false statements.

Weiss, 72, pleaded not guilty to the charges on Monday. If convicted of all four counts, he faces a maximum sentence of 40 years in prison. He remained free after posting a $1.5 million (1.05 million EUR) bond.

Lazar was initially indicted on more than a dozen charges, including money laundering, conspiracy and mail fraud. The indictment said he "frequently served" as a plaintiff in lawsuits filed by the firm.

Lazar received about $2.6 million (1.82 million EUR) from the firm between 1976 and 2004, according to the indictment.

Prosecutors said they will move to drop the remaining charges against Lazar after he is sentenced.

Weiss and top lawyers dominated the industry in securities class-action lawsuits, which involves shareholders who claim they suffered losses because executives misled them about a company's financial condition.

The firm also has been charged in the case and pleaded not guilty Monday to one count each of conspiracy, mail fraud, money laundering and obstruction of justice contained in a revised indictment.

Schulman, 56, pleaded guilty last week to a racketeering conspiracy charge. He agreed to forfeit $1.85 million (1.29 million EUR) to the government and to pay a $250,000 (174,837 EUR) fine. He is awaiting sentencing.

Bershad also has pleaded guilty to conspiracy and agreed to cooperate with the government. He will be sentenced early next year.

Lerach has agreed to plead guilty to conspiring to obstruct justice and making false statements under oath, prosecutors said. He will forfeit $7.75 million (5.42 million EUR) to the government, pay a $250,000 (174,837 EUR) fine and accept a sentence ranging from one year to two years in federal prison, prosecutors said.

He resigned last month from the firm he founded in San Diego, now known as Coughlin Stoia Geller Rudman & Robbins.