LOS ANGELES Prominent attorney Melvyn Weiss was sentenced Monday to 30 months in prison after authorities accused him of helping orchestrate a lucrative lawsuit-kickback scheme targeting some of the largest corporations in the nation.
U.S. District Judge John F. Walter also ordered Weiss, 72, to pay $9.7 million in forfeitures and $250,000 in fines.
Weiss pleaded guilty to a racketeering conspiracy charge in April as part of an agreement with prosecutors.
In a prepared, handwritten statement read before sentencing, Weiss apologized for his "wrongful conduct" and described the case as a fall from grace.
"I promise you my contrition is profound and genuine," said Weiss, the co-founder of the New York law firm once known as Milberg Weiss.
Prosecutors had sought the maximum 33-month sentence. Weiss and his attorneys asked for a reduced prison term, citing his age and contributions inside and outside courtrooms.
Authorities said Weiss' firm made about $250 million over two decades by filing legal actions on behalf of professional plaintiffs who received $11.3 million in kickbacks.
"Over the course of 25 years, Melvyn Weiss and his co-conspirators compromised the justice system as they caused associates to lie to judges across the nation," said U.S. Attorney Thomas P. O'Brien.
One legal observer believed the case will have a significant impact on future class-action lawsuits.
"I think it's going to make judges scrutinize those cases more closely," said Brad Simon, a former federal prosecutor who now works as a criminal defense attorney. "It's a shame because of the (defendants') greed, they may have hampered the ability for investors to get redress."
Milberg Weiss 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 kickback 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.
A seven-year investigation has resulted in guilty pleas by three of Weiss' former partners.
William Lerach recently began serving a two-year prison sentence after pleading guilty to one count of conspiracy to obstruct justice and make false statements.
Steven Schulman pleaded guilty to a racketeering conspiracy charge, and David Bershad pleaded guilty to conspiracy. Both are scheduled to be sentenced later this year.
Two defendants remain in the case the firm itself, now known as Milberg LLP, and attorney Paul T. Selzer. Trials for those defendants are scheduled in August.
The Wall Street Journal, citing anonymous sources, reported Monday that the law firm and federal prosecutors were close to reaching a settlement in which the firm would pay $75 million in fines and penalties. Prosecutors declined to comment.
Judge Walter called the kickback scheme "extremely serious" because attorneys such as Weiss had not disclosed to judges handling class-action cases that the lead plaintiffs were paid for their involvement.
"It further shakes the public's confidence in our system," Walter said.