Melvyn I. Weiss, the high-profile attorney who with his firm led giant class actions against insurers and other corporations, has agreed to a $10 million fine and a sentence of up to 33 months for illegal activity in connection with hundreds of those joint lawsuits.

U.S. Attorney Thomas P. O'Brien in Los Angeles noted that Mr. Weiss would become the fourth current or former partner of the law firm he co-founded 40 years ago to admit criminal conduct.

He said Mr. Weiss agreed to plead guilty to a federal racketeering charge and acknowledge that he and others concealed secret payment arrangements that Milberg Weiss had with named plaintiffs in class-action lawsuits.

Former Milberg Weiss partners William S. Lerach, David J. Bershad and Steven G. Schulman have already pleaded guilty and admitted to a role in a scheme that Mr. O'Brien said paid "millions of dollars in secret kickbacks to several individuals in exchange for them serving as named plaintiffs in more than 225 class-action and shareholder derivative-action lawsuits that were filed across the United States."

"This kickback scheme lasted for more than 25 years and had a severely detrimental effect on the administration of justice across the nation as lies were routinely made to judges," Mr. O'Brien said. "The scheme was based in greed, and it affected the integrity of the courts and the interests of an untold number of absent class members."

He said he will seek the maximum 33-month term.

Mr. Weiss' lawyer, Benjamin Brafman, said the plea agreement gives the judge the discretion to substitute a period of home confinement and/or community confinement for up to half of any prison sentence.

"It is important for the public and legal community to note that despite his plea, Mr. Weiss provided access to the courts for millions of victims of corporate wrongdoing," said Mr. Brafman.

He added that his client, "through a lifetime of legal work and public service," had participated in important pro-bono, humanitarian and philanthropic efforts, which "improved the quality of life for millions of citizens throughout the world."

Mr. Weiss's law firm issued a statement saying Mr. Weiss is resigning and the firm will change its name to Milberg LLP.

The firm, which has been indicted, said it is "seeking to find a fair and appropriate resolution of remaining issues so that we can continue our work on behalf of injured investors and consumers," noting that "last year, management of the firm was taken over entirely by partners who were neither engaged in nor aware of the wrongdoing."

Milberg LLP said it "apologizes to all judges, lawyers, clients and class members, who deserve full and complete adherence to all legal and ethical norms."

The firm now has approximately 70 attorneys and remains among the largest plaintiff class-action firms in the country.

Besides the law firm itself, attorney Paul T. Selzer remains a defendant in the case and is scheduled for trial in August.

Mr. Lerach, who pleaded guilty last year to a conspiracy charge, was sentenced last month to two years in federal prison.

Mr. Schulman and Mr. Bershad are scheduled to be sentenced later this year.

Mr. Weiss issued a statement saying that "I deeply regret my conduct and apologize to all those who have been affected, including all of the wonderful and extremely talented lawyers and other employees of the firm, none of whom had any involvement in any wrongdoing."

He added that "I believe it is very important to preserve this unique legal resource for the benefit of victims of wrongdoing affecting the masses, who historically have been underserved in so many ways."

Special Reports /

Weiss Will Plead Guilty To Racketeering

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