Federal prosecutors here have charged a retired Palm Springs, Calif., lawyer with taking kickbacks from a prominent New York law firm in exchange for serving as plaintiff in dozens of class-action and shareholder lawsuits that earned the firm $44 million over 20 years.
The indictment against 78-year-old Seymour M. Lazar, unsealed Thursday, stems from a years-long investigation by the U.S. attorney’s office into the practices of Milberg Weiss Bershad Hynes & Lerach, which before splitting into two firms last year had led the largest of the investor suits against bankrupt energy trader Enron Corp.
Lazar’s attorney condemned the indictment Friday as an attempt to get his ailing client to turn on the law firm. No employees of Milberg Weiss have been charged, and the firm is cited in the 70-page indictment only as an unnamed “New York Law Firm.” But a spokeswoman for Milberg Weiss acknowledged that it is the law firm involved.
Reports of the grand jury investigation of Milberg Weiss, some of whose partners have close ties to the Democratic Party, were aired in the news media in early 2002 just as one of its top lawyers, William Lerach, was taking the lead in the Enron litigation.