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Milberg Firm Moves to Reduce Criminal Forfeiture
The National Law Journal
May 23, 2008
Milberg Weiss has filed a pre-trial motion to chip away at the $251 million in criminal forfeiture being sought by federal prosecutors in the government's kickback case against the New York firm.
Prosecutors allege that Milberg Weiss, now known as Milberg, along with seven of its partners, obtained $251 million in attorney fees through illegal payments to name plaintiffs.
In March, founding partner Melvyn Weiss agreed to plead guilty to a federal racketeering conspiracy charge and pay nearly $10 million. Three other former partners, William S. Lerach, David Bershad and Steven Schulman, have pleaded guilty in the case. Lerach reported to federal prison this week to serve his two-year sentence.
In recent months, Milberg has been in settlement talks with prosecutors.
The recent motion addresses the more than $251 million being sought as "proceeds" derived from the alleged conspiracy and money laundering charges against Milberg. The motion says that, under forfeiture provisions, the firm is entitled to deduct direct costs associated with providing a "lawful service."
"Because Milberg was providing lawful services and is alleged to have done so in an illegal manner, any illegal 'proceeds' of its services must be calculated," the motion says. "Milberg is entitled to introduce evidence of its costs in litigating the class action lawsuits and to have those costs deducted from any amount found to be 'proceeds' of the offenses for which it is convicted."
Also, the government should only be allowed to seek forfeiture for those alleged crimes that occurred before Aug. 23, 2000, when the Civil Asset Forfeiture Reform Act became effective, the motion says. The government's charges involve cases from 1984 to 2005.
Milberg also opposes the government's request for a personal money judgment and seeks a jury's decision on the amount of the forfeiture for each crime.
Milberg's lawyer, William Taylor, a partner at Zuckerman Spaeder in Washington, declined to comment.
Thom Mrozek, a spokesman for the U.S. Attorney's Office for the Central District of California, declined to comment.
