Top class-action lawyer indicted

NEW YORK (CNNMoney.com) -- A federal grand jury in Los Angeles has indicted prominent class-action lawyer and Milberg Weiss co-founder Melvyn Weiss for conspiring to make illegal payments to plaintiffs in more than 250 lawsuits that generated $250 million in attorneys' fees for the firm, the government said Thursday.

Additionally, Steven Schulman, a former partner in the firm, has agreed to plead guilty to a racketeering charge and acknowledge that he and others, including Weiss, conspired to conceal the secret payments from judges presiding over suits filed by Milberg Weiss.

Prominent class-action lawyer Melvyn Weiss was charged Thursday for paying plaintiffs to take part in lawsuits.

The racketeering conspiracy against Schulman carries a maximum sentence of 20 years in prison. A plea agreement released Thursday by federal prosecutors "contemplates" a sentence of 27 months to 33 months. Schulman had previously pleaded not guilty to the charges.

In a statement, Ben Brafman, Weiss' lawyer, said his client will fight the charges. "We are confident that when the evidence is carefully reviewed at a trial of these charges, Mr. Weiss will be fully exonerated," Brafman said.

The indictment of Weiss and Schulman's plea agreement follow a seven-year probe into Milberg Weiss, which was once the nation's most feared - and loathed - class action law firm.

On Tuesday, Bill Lerach, who ran the San Diego-based West Coast Milberg Weiss, agreed to plead guilty to charges of conspiring to obstruct justice and making false statements under oath, according to a statement by the U.S. attorney's office In Los Angeles.

Under that agreement, Lerach will lose his license to practice law, pay $7.75 million in restitution and a $250,000 fine and accept a sentence of one to two years in federal prison, a prosecutor's statement said. Lerach is not required to cooperate with the feds or testify against his former colleagues.

In May, after another top Milberg Weiss lawyer, David Bershad, who had also been indicted was about to change sides, Lerach unexpectedly advised prosecutors that he was prepared to plead guilty and serve prison time.

Two defendants, former Milberg Weiss partner David Bershad and one of the plaintiffs accused of receiving secret payments, Steven Cooperman, previously pleaded guilty to conspiracy charges.