UPDATE 2-US lawyer Melvyn Weiss indicted in kickbacks case

(Adds statements from Milberg Weiss and Weiss attorney, quote from U.S. attorney, byline)

By Nichola Groom

LOS ANGELES, Sept 20 (Reuters) - Pioneering U.S. shareholder lawyer Melvyn Weiss was indicted on Thursday for allegedly helping to arrange secret payments to plaintiffs in class-action cases against big companies, bringing his law firm about $250 million in attorney's fees over the last 25 years, federal prosecutors said.

Weiss is charged with four counts of conspiracy, racketeering, obstruction of justice and making false statements, the U.S. Attorney's Office in Los Angeles said in a statement. If convicted of all counts, the 72-year-old faces a maximum sentence of 40 years in prison, prosecutors said.

Weiss's attorney said he would 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," Benjamin Brafman said in a statement.

Milberg Weiss LLP, which specializes in securities fraud lawsuits on behalf of investors, was indicted last year for allegedly paying kickbacks to several individuals who agreed to serve as plaintiffs in more than 150 lawsuits. The firm has pleaded not guilty, and a trial is scheduled for next year.

Thursday's superseding indictment expanded the scope of the firm's alleged criminal conduct, prosecutors said.

"The indictment outlines a decades-long kickback scheme that was deliberately concealed from courts across the nation that were overseeing significant class-action casts," U.S. Attorney George Cardona said. "The scheme furthered personal greed at the expense of the integrity of the courts and the interests of absent class members."

In addition to Weiss's indictment, prosecutors also said former Milberg Weiss partner Steven Schulman agreed to plead guilty to a racketeering charge and admit to having a role in the kickbacks scheme.

Prosecutors said Schulman, 56, agreed to forfeit $1.85 million in gains from the scheme and to pay a $250,000 fine. Schulman was indicted last year along with the firm and had previously pleaded not guilty.

Milberg Weiss said in a statement that Thursday's announcement would not affect its ability to work on cases.

"Despite the government's announcement today we will continue to fight for our clients and class members and to achieve the record recoveries for which our firm has long been known," the law firm said.

On Wednesday, Milberg Weiss announced that it expected Weiss to be indicted and said he would no longer work in the firm's management but would continue to counsel clients and attorneys. (Reporting by Martha Graybow and Nichola Groom)