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Los Angeles — Federal prosecutors who indicted Milberg Weiss Bershad & Schulman last month are in talks with a Denver lawyer whose testimony could sharpen the investigation’s focus toward Melvyn Weiss, founding partner of the New York-based law firm, according to sources familiar with the government’s probe. Last month, a federal grand jury in Los Angeles returned an indictment against Milberg Weiss and two of its partners, David Bershad and Steven Schulman, alleging that they obtained $216.1 million in attorney fees by paying $11.3 million in secret and illegal kickbacks to three individuals who served as lead plaintiffs in their cases. USA v. Lazar, No. 05cr00587 (C.D. Calif.). Bershad and Schulman have taken leaves of absence from the firm. Prosecutors have said that the investigation is ongoing, leaving open the possibility of additional indictments against Weiss and William Lerach, a senior partner who left the firm in 2004 to found San Diego-based Lerach Coughlin Stoia Geller Rudman & Robbins. According to the indictment, a senior partner at Milberg Weiss met in 2003 with the Denver lawyer and agreed that a percentage of attorney fees in two cases would go to Howard Vogel, a retired real estate mortgage broker whose retirement fund or family members were serving as plaintiffs for Milberg Weiss. In April, Vogel admitted to charges in a plea deal that he provided false information in federal court and has agreed to cooperate with prosecutors. According to sources familiar with the case, the senior partner at that 2003 meeting was Weiss, and the Denver lawyer was Gary Lozow, a shareholder at Isaacson Rosenbaum. “Mr. Lozow is working closely with the U.S. attorney’s office in Los Angeles, and we expect that will continue,” said John Walsh, a partner at Denver’s Hill & Robbins who represents Lozow. He declined to comment further. Thom Mrozek, a spokesman for the U.S. attorney’s office in Los Angeles, declined to comment.Weiss’ lawyer, Benjamin Brafman at New York-based Brafman & Associates, said: “There is nothing that Mr. Lozow could truthfully say that in any way implicates Mr. Weiss in any wrongdoing because Mr. Weiss did not ever knowingly violate the law.” Looking for a link So far, prosecutors have failed to establish a direct link to Weiss and Lerach in their years-long investigation against Milberg Weiss. In February, prosecutors told both lawyers that they would not bring charges against them anytime soon. Last summer, prosecutors indicted Seymour Lazar, an alleged paid plaintiff for Milberg Weiss, and his lawyer, Paul Selzer. In the past few months, prosecutors have obtained guilty pleas from Los Angeles lawyer Richard Purtich, who admitted taking payments from Milberg Weiss and passing them on to another paid plaintiff, and from Vogel, who along with his family is alleged to have received almost $2.5 million in kickbacks from Milberg Weiss. In two cases involving Vogel, the indictment makes the most prominent references to “Partner A,” who is believed to be Weiss, according to sources familiar with the investigation. According to court papers, in June 2003, Milberg Weiss received $40 million in attorney fees in a class action securities case against Oxford Health Plans. Howard Vogel v. Oxford Health Plans, No. 97cv02325 (D. Conn.). In September 2003, Vogel, whose retirement fund was a plaintiff in that case, sent a memo to Schulman stating that a lawyer, referred to in the indictment as “Vogel Intermediary A,” would be calling the secretary for “Partner A” to arrange a phone call about the payments in that case. “Vogel Intermediary A” is believed to be Lozow, according to sources familiar with the investigation. Vogel also wanted to discuss payments in a separate case in which his stepson was serving as a plaintiff against Baan Co., the indictment says. In response, Schulman told Vogel that “Partner A” would not discuss the matter by phone, but that “Vogel Intermediary A” should meet with him in person at Milberg Weiss’ New York office, the indictment says. On Nov. 10, 2003, “Partner A” met with “Vogel Intermediary A” at the firm’s New York office and “agreed that Milberg Weiss would pay Vogel a percentage of its attorney fees obtained in connection with Oxford Health and Baan,” the indictment says. On Dec. 18, 2003, Milberg Weiss, Schulman and “Partner A” sent “Vogel Intermediary A” two checks, one for $1.1 million and one for $120,000. Those checks were wired to a bank account controlled by Vogel. Schulman’s lawyer, Herbert Stern, did not return calls seeking comment. If Lozow agrees to plead guilty or sign an immunity deal with prosecutors, that would move the case one step closer to Weiss, say sources familiar with the investigation. “They’d love to turn Lozow,” said one lawyer familiar with the case who requested anonymity. “He’d make a great case if he came in and said, ‘I conspired with Schulman and Weiss.’ “

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