Indicted U.S. law firm Milberg LLP is in settlement talks with federal prosecutors to resolve a long-running criminal case involving accusations it paid illegal kickbacks to clients, sources close to the talks said on Tuesday.
New York-based Milberg, scheduled to go on trial in August, is discussing ways to resolve the case with the U.S. Attorney’s Office in Los Angeles, according to two people with knowledge of the talks who asked not to be identified because of the sensitivity of the negotiations.
Prosecutors contend Milberg, a specialist in investor class-actions long feared in corporate America, provided secret cash payoffs to clients over a span of 25 years. The firm is accused of hiding the arrangements from judges and other plaintiffs, reaping $250 million in attorneys’ fees in more than 225 lawsuits in which it paid individuals to bring cases.
The firm did not immediately respond to a request for comment. The U.S. Attorney’s Office declined to comment.
It was not immediately clear how advanced the talks were or what possible resolutions were being discussed.
Milberg co-founder Melvyn Weiss, one of the best-known U.S. shareholder lawyers, pleaded guilty on April 2 to racketeering charges in connection with the alleged scheme and faces as much as 33 months in prison when he is sentenced in June.
The firm, now named after firm co-founder Larry Milberg, who died in 1989, dropped Weiss’ name in March after the plea deal was announced. At the time, Executive Committee member Sanford Dumain said that Milberg was “seeking to find a fair and appropriate resolution of remaining issues” so that it could move forward with its work.
Since its May 2006 indictment, the firm has struggled to hold on to clients and lawyers, rarely bringing new securities fraud class-actions and instead working on its overhang of previously filed litigation.