New guilty plea in class-action kickback scam

updated 3:59 p.m. ET Oct. 18, 2007

LOS ANGELES - A man prosecutors say was paid about $2.6 million to be a professional plaintiff who helped a prestigious New York law firm get lucrative class-action lawsuits pleaded guilty on Thursday to obstruction of justice and two other charges.

After reaching a plea deal, Seymour Lazar, 80, of Palm Springs appeared before U.S. District Court Judge John Walter. He also pleaded guilty to one count each of subscribing to a false tax return and making a false declaration to the court.

Lazar faces up to 18 years in federal prison.

“He does take full responsibility for his actions,” said his attorney, Thomas Bienert.

Lazar was the latest person to plead guilty in a seven-year federal investigation that accuses the firm, previously known as Milberg Weiss Bershad & Schulman, of secretly paying $11.3 million in kickbacks to get people to take part in more than 225 class-action and shareholder lawsuits.

Prosecutors believe the firm now known as Milberg Weiss made an estimated $250 million by filing lawsuits against some of the nation’s largest companies, including Lucent, Microsoft, Prudential Insurance and AT&T.

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