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White-Collar Crime

Milberg Forfeitures Total $32M So Far, Well Below the $251M Target

Posted Apr 18, 2008 7:06 AM CDT
By Debra Cassens Weiss

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Prosecutors claim Milberg Weiss and its lawyers pocketed $251 million in attorney fees that were tainted by kickbacks paid to lead plaintiffs in securities cases. But so far the government has recovered only $32 million in plea deals with nine defendants.

Recoveries in forfeiture cases may be lower than targeted amounts because of several factors, lawyer Andrew Weissmann of Jenner & Block told the National Law Journal. The cases could be weak, the defendants may not have the cash, or they may get leniency because they cooperated.

Prosecutors probably won’t reach the targeted $251 million amount in the Milberg case even if they obtain forfeitures from the remaining defendants, said Columbia Law School professor John Coffee. The remaining defendants are the firm itself and lawyer Paul Selzer, who formerly represented Seymour Lazar, a lead plaintiff who agreed to forfeit $1.5 million.

"A firm like Milberg probably couldn't come up with $200 million," Coffee told the NLJ, "but probably could pay $50 million."

The biggest forfeiture amounts have been paid by three former partners of the firm:

--Melvyn Weiss, who agreed to forfeit $9.75 million.

--William Lerach, who agreed to forfeit $7.75 million.

--David Bershad, who also agreed to forfeit $7.75 million.

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