UPDATE 3-US lawyer Melvyn Weiss indicted in kickbacks case
(Adds expert comment, effort to reach Schulman's attorneys)
LOS ANGELES, Sept 20 (Reuters) - Pioneering shareholder lawyer Melvyn Weiss was indicted on Thursday for allegedly helping to arrange secret payments to plaintiffs in class-action cases against companies, racking up $250 million in fees for his law firm over 25 years, U.S. prosecutors said.
Weiss, widely seen as the king of high-stakes shareholder litigation in the United States, 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.
If convicted of all counts, the 72-year-old faces a maximum sentence of 40 years in prison, prosecutors said.
Weiss's attorney said his client, best known for landing more than $1 billion in settlements for investors hurt by the Drexel Burnham Lambert junk bond scandal in the 1980s, 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.
Thursday's superseding indictment expanded the scope of the firm's alleged criminal conduct, prosecutors said, adding two new charges and increasing the number of cases in which the alleged kickbacks were paid to about 250 from about 150.
"The scheme furthered personal greed at the expense of the integrity of the courts," U.S. Attorney George Cardona said in a statement.
Milberg Weiss previously pleaded not guilty in the long-running probe, and a trial is scheduled for next year.
COULD BE 'SAD DAY'
"That law firm and Mr. Weiss have been practicing for many many years and have brought forth a lot of litigation that has been significant," said George Stamboulidis, head of white-collar defense at law firm Baker Hostetler.
"If the allegations are proven, that will be a sad day for that aspect of the legal system. But there is no indication that this was an industrywide epidemic."
Weiss's indictment comes days after another former Milberg Weiss partner and Weiss's protege, William Lerach, said he would plead guilty to criminal conspiracy and go to prison for his involvement in the scheme.
On Thursday, another former partner, Steven Schulman, agreed to plead guilty to a racketeering charge and admit to having a role in the kickbacks scheme. Continued...
