Nearly 12 years ago, an internal memo from the Southern California firm Best Best & Krieger expressed concerns that it was acting as a conduit for legally questionable payments from the plaintiff firm Milberg Weiss to Seymour Lazar, the lead plaintiff in dozens of securities class actions.
The memo, filed in court by prosecutors last week, expresses particular worry about the Best firm recording payments from the firm then known as Milberg Weiss Bershad Hynes & Lerach to Lazar as firm income, which would then be secretly credited to Lazar for future legal services.
“To us it just smells bad,” the memo says, “and probably would to an investigator.”
That concern came to fruition in June, when Lazar and his attorney, Paul Selzer — a former partner at the Best firm — were indicted by a Los Angeles federal grand jury for allegedly taking more than $2 million in illegal kickbacks from Milberg Weiss.
The L.A. U.S. Attorney’s Office has spent the past five years probing whether Milberg Weiss — which split in 2004 when star partner William Lerach broke off to form his own San Diego-based firm — paid illegal kickbacks to lead plaintiffs in class actions.