Famed securities attorney Melvyn Weiss, who spent more than a year behind bars after pleading guilty to charges that his firm paid kickbacks to lead plaintiffs, could face return to prison following his arrest for drunken driving in Florida.
Weiss, 77, founder of what is now New York’s Milberg LLP, was arrested on December 19 in Boynton Beach, Fla., for driving under the influence, according to an arrest report submitted in court documents by federal prosecutors on February 21. He was due to complete his three years of supervised release on February 5.
U.S. District Judge John Walter in Los Angeles ordered Weiss back in court on May 3.
"He could be incarcerated for violating the terms of his release," said Thom Mrozek, a spokesman for the U.S. attorney’s office in Los Angeles. "Under the supervision of a probation officer, and pursuant to that release, you agree you will not violate the law while on release. The allegations made by the [U.S.] Probation Department are in fact he did violate the law by driving while intoxicated in Florida."
He added that prosecutors had not taken a position yet about what price Weiss should pay.
Weiss’s attorney, Alfredo Jarrin, a partner at Brown White & Newhouse in Los Angeles, declined to comment.
During the hearing in Los Angeles, Weiss admitted he had violated the terms of his supervised release, Mrozek said. The judge continued the matter to May 3 to give time for local prosecutors in Palm Beach County, who filed charges on January 8, to wrap up their case against Weiss, Mrozek said.
Under his 2008 plea agreement, Weiss had agreed not to commit any crime while on probation. "Defendant understands that if defendant violates one or more of the conditions of any supervised release imposed, defendant may be returned to prison for all or part of the term of supervised release," the document says.
According to the arrest report by the Palm Beach County Sheriff’s Office, submitted by federal prosecutors, Weiss was pulled over in the late night hours of December 19 after a deputy sheriff saw his blue Lexus SUV swerving and driving in two lanes at once while traveling south on Interstate 95. Police followed the car, which reached speeds of up to 90 miles per hour, for at least one mile before it stopped.
"When I made contact with the driver I could detect a strong odor of an alcoholic beverage on his breath and he appeared to be impaired," one of the officers said in an affidavit.
According to the arrest report, Weiss had a passenger in the car and told an officer he had had one drink and was coming from a golf club. "The driver’s speech was slurred and his eyes were red and glossy," the arrest report says. Weiss later said that he’d had two drinks.
After getting out of the car, Weiss failed to maintain his balance while walking a painted white street line and was unable to recite the alphabet, the arrest report says.
"The defendant stated he had a law degree when I asked his level of education," the arrest report says. "The defendant correctly recited the alphabet from ‘A’ to ‘F.’ He then said ‘H,I,L,M,N,O,P,Q,R,S,T,U,V,W,S,X,U,V,W,S,I,C.’ He then said ‘my mind is not as good as it was.’ The defendant appeared confused during the alphabet and tried several times to correct himself."
After being arrested, Weiss asked an officer from the back of his patrol car: "Why are you doing this to me, what did I do that was so wrong?" and "You know I am on probation."
He also said "Do you know who I am?" and "Pretty well known person" before falling asleep in the patrol car, according to the arrest report. His blood alcohol level turned out to be between 0.13 and 0.14.
Weiss was sentenced to 30 months in prison after pleading guilty to one count of racketeering conspiracy. He paid a $250,000 fine and forfeited $9.7 million. He served about 18 months in a federal prison facility in Morgantown, W.Va., followed by time in a halfway house and home confinement.
He was supervised by a probation officer in Florida from November through May and by a probation officer in New York from May through November. In 2011, Walter denied Weiss’s request to cut short his supervised release period.
The government had alleged that Milberg Weiss Bershad & Schulman and several of its then- and former partners, including Weiss, obtained $251 million in attorney fees by paying kickbacks to lead plaintiffs. The firm paid $75 million in 2008 to settle the charges.
William Lerach, a former senior partner at the firm, was sentenced to 24 months in prison. He served 16 months—at first in a low-security facility in California until he was transferred to Arizona after offering a prison guard his season tickets to the San Diego Chargers game. He later was transferred to home confinement.
Two other partners, Steven Schulman and David Bershad, were sentenced to six months in prison after pleading guilty to a single federal racketeering charge each. Lead plaintiffs Howard Vogel and Steven Cooperman were sentenced to three months and four months, respectively. A former lawyer who served as an intermediary in the scheme, Richard Purtich, was sentenced to two months, and a Milberg expert, John Torkelson, was sentenced to 18 months after pleading guilty to lying to a federal judge.
Another lead plaintiff, Seymour Lazar, and his attorney, Paul Selzer, did not serve prison sentences but reached plea deals with the government.
Contact Amanda Bronstad at email@example.com.