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LOS ANGELES � New obstruction-of-justice charges brought last month against Milberg Weiss and the firm’s founding partner, Melvyn Weiss, strengthen claims of misconduct in the government’s criminal case by accusing both defendants of deliberately withholding a fax that was subpoenaed in 2002 as part of the investigation. Prosecutors charged Weiss with conspiracy, racketeering, obstruction of justice, and making false statements to the grand jury, in a case alleging that he and six other lawyers at Milberg Weiss paid more than $11 million in illegal kickbacks to lead plaintiffs. Prosecutors also brought additional obstruction charges against Milberg Weiss, which was indicted last year. The new charges could spell trouble for the firm and Weiss, said Kirby Behre, a former federal prosecutor and a partner in the Washington office of Paul, Hastings, Janofsky & Walker. “It’s obviously a very serious charge, particularly for someone who is a lawyer or law firm,” he said. “You attempted to harm the government’s investigation. For an officer of the court, and someone who’s duty-bound to uphold the law, that’s particularly egregious.” William Lerach, a former Milberg Weiss partner, agreed last month to plead guilty to a federal conspiracy charge. As part of the deal, Lerach has not agreed to cooperate with prosecutors. Lerach agreed to forfeit $7.75 million to the government, pay a $250,000 fine and serve one to two years in prison, depending on the judge’s discretion. Lerach could serve some home detention as part of his prison time. Another former Milberg Weiss partner, David Bershad, and Steve Cooperman, a frequently named plaintiff, each pleaded guilty earlier this year to a federal conspiracy charge, and they have been cooperating in the investigation. Steven Schulman, a former Milberg Weiss partner, pleaded guilty on Oct. 9 to a federal racketeering charge. He agreed to forfeit $1.85 million and pay a $250,000 fine. He is scheduled for sentencing on June 23, 2008. In a superseding indictment brought last year, prosecutors alleged that Milberg Weiss, Schulman and Bershad collected more than $200 million in attorney fees by paying secret and illegal kickbacks to named plaintiffs. The original indictment, in 2005, was brought against named plaintiff Seymour Lazar and his personal lawyer, Paul Selzer. The fax According to the recent indictment, Milberg Weiss received a federal grand jury subpoena in January 2002 for documents related to Steve Cooperman, a named plaintiff in several of its cases. Cooperman pleaded guilty earlier this year to a federal charge of conspiracy. One of the documents being subpoenaed was a fax sent 12 years earlier from Cooperman to then-Milberg Weiss partner Bershad. The fax relates to an arrangement in which Weiss agreed to pay Cooperman $175,000 for having served as a plaintiff in a case. Weiss disguised the payment as a refundable option on the purchase of a painting owned by Cooperman called “Reclining Nude,” by Pablo Picasso. Cooperman agreed to reimburse Weiss, and the firm agreed to write “retainer” checks to Cooperman using Cooperman’s brother-in-law as a conduit. Two years later, Cooperman was asked about the status of his reimbursement checks to Weiss. In the fax, Cooperman wrote: “This is what I’ve found so far. I faxed Bill copies of 3 checks in 12/89 . . . .According to my records, after 12/89, Mel sent Bruce another 35,000, & I think I may still owe that to Mel.” The indictment alleges that from 2003 until August of this year, Milberg Weiss and Weiss failed to provide the fax as required under the subpoena. Weiss also lied to prosecutors about the fax’s whereabouts, prosecutors allege in additional false-statements charges in the indictment. Specifically, Weiss told prosecutors he discovered the fax in a safe at Milberg Weiss. Before discovering the fax, he told prosecutors he had forgotten it was in his safe. He also told prosecutors the fax didn’t have to be provided under the subpoena because it belonged to him, not the firm. Prosecutors say that Weiss took the fax, which belonged to Milberg Weiss, from Bershad, who found it in his desk drawer. Marin Ein, a spokeswoman for Milberg Weiss, and the firm’s lawyer, William Taylor III, a partner at Washington-based Zuckerman Spaeder, did not return calls seeking comment on the obstruction of justice charges. Weiss’s lawyer, Benjamin Brafman, a partner at New York-based Brafman & Associates, did not return calls seeking comment. In a statement released in response to the charges, Brafman said: “We are confident that when the evidence is carefully reviewed at a trial of these charges, Mr. Weiss will be fully exonerated.” But Dan Richman, a law professor at Columbia Law School, said obstruction-of-justice charges could be an effective tool to use before a jury “because, should a jury have difficulty wrapping its mind around the underlying fraud, it can still easily grasp an effort to impede an investigation.”

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