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After six years of wide-ranging inquiries, stop-and-go grand jury activity and peripheral indictments, L.A. federal prosecutors are close to charging two partners from the massive plaintiff firm Milberg Weiss Bershad & Schulman � and possibly the firm itself � with paying illegal kickbacks, said several lawyers connected to the case. Of course, the two partners aren’t the original targets of the investigation: Melvyn Weiss and former star partner William Lerach � who left Milberg Weiss Bershad Hynes & Lerach, along with almost all of the firm’s West Coast lawyers, to form San Diego’s Lerach Coughlin Stoia Geller Rudman & Robbins in 2004. After indicting a former Milberg client and his lawyer in June on charges of accepting kickbacks, prosecutors, in a well-publicized shift, have turned away from Weiss and Lerach in recent months. Instead, they’ve focused on two name partners at Milberg’s current iteration, Milberg Weiss Bershad & Schulman. Lawyers familiar with the investigation said Wednesday that David Bershad, partner Steven Schulman and perhaps their firm are likely to be indicted within the next month. They’re being looked at in connection with payments to Howard Vogel, a real estate broker and former lead plaintiff in several Milberg class actions. Schulman was the lead plaintiff lawyer in several cases in which Vogel was a client, the most recent filed in 2004, and Bershad is the partner who oversees cash flow at the firm. Over the last two weeks, attorneys for Milberg Weiss and the two partners have traveled to Washington, D.C., in an effort to convince Alice Fisher, the Justice Department’s criminal chief, not to indict their clients, several lawyers said. Schulman’s lawyer, Edward Hayes, said Wednesday that he has not been to D.C., but that another attorney � he wouldn’t say who � met with Fisher to discuss the partners. Hayes added that he wasn’t sure what Vogel’s current situation is. “I don’t know if he’s getting indicted or has a deal,” Hayes said. Vogel could not be reached by press time. But if he follows the example of Seymour Lazar, the former Milberg client indicted last year, it’s far from certain that he’ll flip. Lazar’s case is set for trial later this year. He is accused of taking illegal kickbacks from Milberg Weiss in exchange for serving as lead plaintiff in class actions. Prosecutors claim the payments were a percentage of attorneys’ fees in settled cases, and were paid by Milberg Weiss to Lazar’s lawyer and co-defendant, Paul Selzer, as a referral fee, which would not be improper. But, the indictment says, Selzer passed the fees on to Lazar. Such a scheme would be illegal because lead plaintiffs in class actions are not permitted to have interests that diverge from the rest of the class. While the Lazar indictment was widely seen as an attempt to force the former client and his attorney to testify against Milberg � and Lerach in particular � that strategy has not worked. Indeed, prosecutors have granted immunity to at least three former Milberg Weiss partners � and at least two former clients � in exchange for their testimony, but have been unable to develop a case against Lerach. Lawyers close to the case say that’s largely because the person who started the investigation � disgraced Beverly Hills eye doctor and former Milberg client Steven Cooperman � is the only person to provide documentation linking Lerach to knowledge of such payments. But Cooperman is a highly impeachable witness whom prosecutors would be reluctant to rely on without corroborating evidence. Most problematic is that Cooperman has been convicted of fraud; he told prosecutors about the alleged kickback scheme to lighten a prison sentence for an insurance scam. And since he got out of jail, Cooperman’s divorce case raised questions about whether he has falsified documents in other contexts. Lerach’s lawyer, John Keker, could not be reached by press time Wednesday. William Taylor, a lawyer for Milberg Weiss, and Bershad’s lawyer, Andrew Lawler, didn’t return calls seeking comment.

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