Federal prosecutors who indicted Milberg Weiss Bershad & Schulman last month are in talks with a Denver lawyer whose testimony could sharpen the investigation's focus toward Melvyn Weiss, founding partner of the New York-based law firm, according to sources familiar with the government's probe.
Last month, a federal grand jury in Los Angeles returned an indictment against Milberg Weiss and two of its partners, David Bershad and Steven Schulman, alleging that they obtained $216.1 million in attorney fees by paying $11.3 million in secret and illegal kickbacks to three individuals who served as lead plaintiffs in their cases. USA v. Lazar, No. 05cr00587 (C.D. Calif.).
Bershad and Schulman have taken leaves of absence from the firm.
Prosecutors have said that the investigation is ongoing, leaving open the possibility of additional indictments against Weiss and William Lerach, a senior partner who left the firm in 2004 to found San Diego-based Lerach Coughlin Stoia Geller Rudman & Robbins.
According to the indictment, a senior partner at Milberg Weiss met in 2003 with the Denver lawyer and agreed that a percentage of attorney fees in two cases would go to Howard Vogel, a retired real estate mortgage broker whose retirement fund or family members were serving as plaintiffs for Milberg Weiss. In April, Vogel admitted to charges in a plea deal that he provided false information in federal court and has agreed to cooperate with prosecutors.
According to sources familiar with the case, the senior partner at that 2003 meeting was Weiss, and the Denver lawyer was Gary Lozow, a shareholder at Isaacson Rosenbaum.