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LOS ANGELES — The U.S. Attorney’s Office for the Central District of California has filed its first response opposing motions to dismiss several counts of its criminal case against Milberg Weiss and two of its former partners. The case, brought a year ago, alleges that Milberg Weiss and two of its former partners, Steven Schulman and David Bershad, collected $200 million in attorney fees by paying secret and illegal kickbacks to named plaintiffs. Three of the indicted defendants — Schulman, named plaintiff Seymour M. Lazar and Lazar’s former lawyer, Paul T. Selzer — have filed motions to dismiss the charges against them, mostly relating to “honest services fraud.” In general, they argue that fees paid to named plaintiffs would not have harmed the absent class members in the cases mentioned in the indictment. In response, federal prosecutors argue in July 11 court papers that “honest services fraud” does not require them to prove that class members were economically harmed. “Rather, the government need only prove the fraudulent concealment of material facts,” the motion states. Additionally, “class members were entitled to know Milberg Weiss and Schulman had entered into secret and illegal kickback arrangements with named plaintiffs,” the motion states. Assistant U.S. Attorney Richard Robinson, lead prosecutor in the case, did not return calls seeking comment. Calls also were not returned by Lazar’s lawyer, Louis Feuchtbaum, a partner at San Clemente, Calif.-based Bienert & Miller, or Schulman’s lawyer, Herbert Stern of Stern & Kilcullen in Roseland, N.J. Bershad agreed to plead guilty on July 9 to a charge that he conspired to conceal illegal payments to plaintiffs in class action suits. He also agreed to forfeit $7.75 million, pay a fine of $250,000 and cooperate with federal prosecutors. Earlier this month, Melvyn Weiss, senior and founding partner of Milberg Weiss, and William Lerach, a former partner at the firm, reportedly rejected a plea deal. Neither has been charged. Lerach’s San Diego-based firm, Lerach Coughlin Stoia Geller Rudman & Robbins, recently acknowledged that he would resign from his firm. Bloomberg reported this week that Lerach would step down within 60 days. Lawyers for Milberg Weiss reportedly have been in talks with federal prosecutors over a plea deal.

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