Department of Justice seal U.S. Department of Justice

Debra Wong Yang
United States Attorney
Central District of California

United States Courthouse
312 North Spring Street
Los Angeles, California 90012
Release No. 06-061

Return to the 2006 Press Release Index

Return to the Home Page

May 18, 2006
For Information, Contact Public Affairs
Thom Mrozek (213) 894-6947



Los Angeles, CA - The New York-based law firm of Milberg Weiss Bershad & Schulman and two of its name partners were indicted today by a federal grand jury for allegedly participating in a scheme in which several individuals were paid millions of dollars in secret kickbacks in exchange for serving as named plaintiffs in more than 150 class-action and shareholder derivative-action lawsuits. The indictment alleges that the firm received well over $200 million in attorneys' fees from these lawsuits over the past 20 years.

The 20-count indictment charges Milberg Weiss and two senior partners, David J. Bershad and Steven G. Schulman, in a conspiracy with several objects, including obstructing justice, perjury, bribery and fraud. The conspiracy count outlines a scheme in which individuals received secret kickback payments to serve, or cause friends and relatives to serve, as named plaintiffs in lawsuits filed by Milberg Weiss. To conceal the illegal kickback scheme from judges presiding over the lawsuits and other parties involved in the litigations, the Milberg Weiss firm, Bershad and Schulman allegedly made, and caused the paid plaintiffs to make, false and misleading statements in documents and in under-oath depositions. The indictment further alleges that the illegal kickbacks were secretly paid by Milberg Weiss to the named plaintiffs through various intermediary law firms and lawyers selected by the paid plaintiffs. The indictment states that three named plaintiffs received at least $11.3 million in illegal kickbacks.

"This case is about protecting the integrity of the justice system in America," said United States Attorney Debra Wong Yang. "Class-action attorneys and named plaintiffs occupy positions of trust in which they assume responsibility to tell the truth and to disclose relevant information to the court. This indictment alleges a wholesale violation of this responsibility."

Also charged in the indictment are Seymour M. Lazar, 78, of Palm Springs, who is alleged to have served as a paid plaintiff and received approximately $2.4 million in secret kickbacks, and attorney Paul T. Selzer, 65, of Palm Springs, who is alleged to have been one of the intermediary lawyers who laundered illegal kickback payments for the benefit of Lazar. Lazar and Selzer were charged in an earlier version of the indictment (see:

The indictment also names as co-conspirators two men Steven G. Cooperman, 64, of Connecticut, and Howard J. Vogel, 61, of Aventura, Florida who allegedly served as paid plaintiffs and received, respectively, approximately $6.5 million and $2.5 million in secret kickbacks from Milberg Weiss. Cooperman was convicted of insurance fraud and other crimes in 1999 in an unrelated case, and he has been cooperating in the government's ongoing investigation. In a plea agreement filed in federal court in Los Angeles on April 28, Vogel agreed to plead guilty to making a false declaration to a court and to admit that he lied under oath to conceal the existence of the secret kickback arrangement from a court presiding over one of the class-action lawsuits in which an entity controlled by Vogel served as a plaintiff. In connection with his anticipated guilty plea, Vogel has agreed, among other things, to forfeit to the United States $2 million and to cooperate in the government's ongoing investigation.

The indictment returned today charges the Milberg Weiss law firm, Bershad and Schulman with one count of conspiring a) to obstruct justice, b) to make false declarations under oath in court proceedings, c) to travel in interstate commerce and use mail facilities to carry on commercial bribery, d) to commit mail and wire fraud, and e) to make illegal payments to a witness. The indictment also charges those defendants with three substantive counts of mail fraud, one count of conspiring to commit money laundering and two criminal forfeiture counts. Bershad and Schulman are also charged with one count of racketeering conspiracy with respect to conducting the affairs of Milberg-Weiss, and one additional criminal forfeiture count. Lazar is named as a defendant in the conspiracy count, the racketeering conspiracy count, six substantive mail fraud counts, the money laundering conspiracy count, four substantive money laundering counts, three counts of subscribing to false tax returns, one obstruction of justice count, and the three criminal forfeiture counts. Selzer is named as a defendant in the money laundering conspiracy and substantive money laundering counts, and in one of the criminal forfeiture counts.

Postal Inspector in Charge Oscar Villanueva said: "As the law enforcement arm of the U.S. Postal Service, Postal Inspectors ensure the protection of the American public from fraud schemes being perpetrated through the U.S. Mail. With this investigation and indictment it is our intent to send a clear message to those who use or consider using the postal system to commit fraud. Whether you sit in the board room or your home office, if you choose to betray the trust placed in you, and defraud the American public, the Postal Inspection Service will find you and bring you to justice."

IRS Criminal Investigation Acting Special Agent In Charge Kathy Thornton said: "The conduct of senior partners at Milberg Weiss, as alleged in the indictment, is an insult to the judicial system established by our forefathers. There is no place for this type of behavior in the legal profession. We hope that the charges brought today will show attorneys and law firms that are involved in criminal activity that they are not immune from criminal prosecution."

Bershad, 66, of Montclair, New Jersey, and Schulman, 54 of New York City, will be summoned to appear for an arraignment in United States District Court in Los Angeles sometime in June. Lazar and Selzer are currently scheduled to go to trial on October 24, but in light of today's superseding indictment that date may change.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The conspiracy count alleged in the indictment carries a maximum possible penalty of five years in prison. The racketeering conspiracy carries a maximum sentence of 20 years in prison. The mail fraud counts carry a maximum penalty of five years in prison. The money laundering counts carry a maximum sentence of 20 years in prison. The charge of subscribing to a false tax return carries a maximum sentence of three years in prison. The charge of obstruction of justice carries a maximum penalty of 10 years in prison.

Today's indictment is the result of an ongoing investigation by the United States Postal Inspection Service and IRS Criminal Investigation.


Release No. 06-061

Return to the 2006 Press Release Index

Return to the Home Page