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Like lilacs and hurricanes elsewhere in the country, spring’s transition to summer brings its own annual rite to Southern California: prosecutorial convulsions in the seemingly endless Milberg Weiss case. On Wednesday, four top-level partners from the firm spent an hour in the U.S. attorney’s office in Los Angeles trying to negotiate a deal. That session came amid a downpour of rumors and media reports raising new questions about the firm, its lead partner, Melvyn Weiss, and William Lerach, the former star partner whom prosecutors have been after for nearly eight years � and who may now be stepping away from the firm. For the last three of those years, late spring has brought jarring developments in the investigation of the country’s top plaintiff firm. When the probe began in 1999, it was focused on Lerach. But it didn’t produce charges until the May 2005 federal indictment of former client Seymour Lazar for allegedly taking illegal kickbacks from the firm. After another year of intense investigation, the L.A. U.S. attorney’s office last May charged Milberg Weiss and two former name partners, David Bershad and Steven Schulman, with participating in a scheme to illegally pay kickbacks to name plaintiffs in securities class actions. This week, Brad Friedman, Ariana Tadler, Michael Spencer and Matthew Gluck flew to L.A. to discuss a possible deal in which Milberg Weiss would pay a heavy fine in exchange for the government dropping its criminal prosecution. Those partners did not return calls by press time Thursday. But at a Milberg Weiss partner meeting on Thursday, they said they had been pleased with the L.A. rendezvous, according to a person with knowledge of the discussion. How much the firm would be willing to shell out is unclear, though people familiar with the case said that amounts ranging from $50 million to $100 million have been discussed. Such a deal was discussed in the weeks before last year’s indictment, and � to the dismay of many Milberg partners � fell through after a deal could not be reached that met the law firm’s desire to admit little guilt.
Probing the Milberg Weiss ProbeFederal prosecutors have it in for the ailing class action leviathan. Follow our complete coverage of the kickback investigation.

The renewed talks between prosecutors and the firm aren’t the only ongoing discussions. As the Wall Street Journal reported Thursday, Bershad � accused of keeping money for kickbacks in an office credenza � is close to reaching a plea deal with prosecutors. Two people with knowledge of the investigation said Thursday that a Bershad guilty plea could be imminent, and that partners at Milberg Weiss discussed it briefly in a meeting this week. Bershad’s lawyer, Cristina Arguedas of Arguedas, Cassman & Headley, declined to comment. Bershad himself did not return a call by press time. People with knowledge of the probe also said that Schulman has been in plea talks for some time, though those discussions have hit some sticking points. For one, they said, the government’s case against Schulman doesn’t appear to be as strong as the charges against Bershad. And perhaps just as importantly, the notoriously temperamental Schulman � who wept as he announced his departure from the firm last year � has long struggled with health and anxiety problems that have made him reluctant to agree to go to jail. His lawyer, New Jersey-based Herbert Stern, did not return a call Thursday. WHERE’S BILL? WHERE’S MEL? Several people familiar with the case said that Lerach � who split from Milberg Weiss in 2004 to form Lerach Coughlin Stoia Geller Rudman & Robbins � has not been among the people discussing a potential plea. Neither Lerach nor his lawyer, John Keker of Keker & Van Nest in San Francisco, returned calls by press time. And while Lerach’s assistant said Thursday that he’s still with the firm, several plaintiff lawyers and others familiar with the case said he’s told partners that he’ll be leaving shortly. There’s been widespread speculation that his departure is linked to a potential Bershad guilty plea, and several people with knowledge of the case said that if Bershad were to cooperate with prosecutors, he’d probably be able to point to specific financial transactions in which Lerach played a role. Curiously absent from the latest turmoil is Melvyn Weiss, the Milberg head and someone widely assumed to be controlling that firm’s decision-making process. Weiss didn’t return calls to his home and office Thursday, nor did his lawyer. But he’s widely assumed to be a target of the federal probe. That has complicated his role in determining the firm’s future, said several people familiar with the case. Over the last year or so, there has been concern within the firm that Weiss’s desire to protect himself from charges may conflict with the firm’s interests. Indeed, last year, the firm’s executive committee brought in new counsel with Quinn Emanuel Urquhart Oliver & Hedges to discuss a potential deal. While that didn’t work out, lawyers involved in the case are now speculating on what it means that Weiss didn’t attend the Wednesday meeting in Los Angeles � and also on whether deals between the prosecutors and the firm � or any of its former lawyers � would result in his being charged.

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