[JURIST] US law firm Milberg LLP [firm website], formerly Milberg Weiss, is in negotiations with federal prosecutors to settle accusations related to an alleged kickback scheme, sources told Reuters on Tuesday. The firm pleaded not guilty [JURIST report] in 2006 to fraud and conspiracy charges for allegedly paying up to $11.3 million since 1984 to individuals to serve as lead plaintiffs in class-action and shareholder derivative lawsuits. The lead plaintiffs were allegedly promised 10 percent of the attorney fees eventually gathered by the firm.
Earlier this month, firm partner and co-founder Melvyn Weiss pleaded guilty [agreement, PDF; JURIST report] to one count of racketeering conspiracy in connection with the kickback scheme. Weiss' sentencing is scheduled for June 2; he faces up to 33 months in prison. In February, former partner William Lerach was sentenced to two years in prison for his part in the scheme; he pleaded guilty last year to conspiracy to obstruct justice after reaching an agreement [JURIST reports] with prosecutors in September. Three individuals pleaded guilty in connection with the scheme in May 2006 after the firm was indicted [JURIST reports]. Partner David J. Bershad pleaded guilty [JURIST report] to conspiracy charges in July 2007. Reuters has more.