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Leading class-action law firm, partners indicted for alleged kickbacks

[JURIST] The US Attorney's Office for the Central District of California [official website] Thursday released a grand jury indictment [text, PDF; press release, PDF] of leading US class-action law firm Milberg Weiss Bershad & Schulman [law firm website] and partners David J. Bershad and Steven G. Schulman for allegedly paying over $2.4 million to Palm Springs attorneys Seymour Lazar and Paul Seltzer and others since 1984 in exchange for being named as plaintiffs in class action lawsuits. According to the indictment, the firm paid the plaintiffs to purchase securities that were expected to decline in value so that they could be named in subsequent class action litigation. Milberg Weiss has denied any wrongdoing [statement], saying that the firm is "particularly incensed that the prosecutors decided to indict the firm itself" subjecting its employees to "serious personal and professional harm." Indicted partners Bershad and Schulman [statements] have taken leaves of absence from the firm. Lazar and Seltzer, who received and passed on payments, respectively, were previously indicted [DOJ press release] in June 2005 for their involvement in the scheme.

The indictment, which includes charges of money laundering, mail fraud and conspiracy, follows months of investigation into Milberg Weiss, which is one of the largest litigators of shareholder class action lawsuits in the country. AP has more.

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