Legal News

Last defendant in Milberg kickback case pleads guilty

By Jason Siegel

Paul Selzer, the last remaining defendant in the federal government's kickback case against Milberg, has pleaded guilty to filing false documents with the Internal Revenue Service (IRS).

The plea agreement ends an investigation spanning nearly a decade in which federal prosecutors alleged that Milberg and seven of its partners generated $251 million in attorney fees by paying kickbacks to lead plaintiffs. Last month, Milberg agreed to pay $75 million as part of a nonprosecution agreement with federal prosecutors. Several former partners, including co-founder Melvyn Weiss and William Lerach, have pleaded guilty in the case.

Lerach is serving a sentence of 24 months; Weiss was sentenced in June to 30 months in prison.

Selzer, who was scheduled to go to trial next month, has agreed to pay a $250,000 fine and serve an unspecified period of probation in home detention. He pleaded guilty on July 14. Sentencing is set for Nov. 3. His lawyer, David Wiechert, a solo practitioner in San Clemente, Calif., declined to comment.

Bonnie Vuong, chief assistant to U.S. Attorney Thomas P. O'Brien of the Central District of California, declined comment.

Selzer is a former lawyer for Seymour Lazar, a lead plaintiff in several of Milberg's cases who pleaded guilty last year to one count of filing false tax returns and one count of obstruction of justice. He also admitted that he made false statements in court. Earlier this year, Lazar was sentenced to two years of probation, including six months of home detention.

According to Selzer's plea agreement, the law firm in Palm Springs, Calif., where Selzer worked received about $991,000 from Milberg between 1984 and June 1995. A firm he later co-founded received another $190,000 from July 1995 to 2001. The payments were all earmarked for Lazar, who did not report the income to the IRS.

In the plea agreement, Selzer admits that in 2000 his firm reported to the IRS as its own income nearly $50,000 of payments from Milberg. Those payments should have been reported as income to Lazar.

-- Amanda Bronstad

Full post as published by Legal Pad | LA on July 14, 2008 (boomark / email).