Milberg Agrees to $75 Million Settlement With Government
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
LOS ANGELES — The Milberg law firm said today it will pay $75 million to settle a federal kickback case involving class-action lawsuits against some of the nation’s biggest corporations.
The New York firm said in a prepared statement the deal called for the government to dismiss all charges against it.
RELATED: Milberg LLP Press Statement.
The U.S. attorney’s office at Los Angeles, which is handling the case, declined immediate comment.
The firm was accused of making $250 million over two decades by filing legal actions on behalf of professional plaintiffs who received $11.3 million in kickbacks.
The firm was charged with aiding and abetting mail fraud and money-laundering conspiracy. A trial had been expected to start in August.
Then known as Milberg Weiss, the firm dominated the industry in securities class-action lawsuits, which involve shareholders who claim they suffered losses because executives misled them about a company’s financial condition.
The deal was disclosed in a statement by a member of the firm’s executive committee, Sanford Dumain.
“This settlement enables us to move forward with our continuing representation of investors and consumers in class actions and other important lawsuits, and allows us to capitalize on the tremendous talents of the lawyers at the firm,” he said.
The firm will make payments to the government totaling $75 million over the next five years, the statement said.
Mr. Dumain said the firm risked having to pay forfeitures and penalties of many hundreds of millions of dollars if the criminal case had gone forward.
“We wanted to avoid that enormous risk, which we faced solely because of the misconduct of certain of our partners who are no longer with the firm,” he said.
A seven-year investigation has resulted in guilty pleas by three former partners.
The scheme allowed attorneys at the firm to be among the first to file litigation and secure the lucrative position as lead plaintiffs’ counsel, according to court documents.
The lawsuits targeted companies such as AT&T Inc., Lucent, WorldCom, Microsoft Corp. and Prudential Insurance.
