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Business

US 'king of class actions' jailed for kickbacks scam

Bill Condie, Evening Standard
3 Jun 2008


Lawyer Melvyn Weiss, the king of class actions with a string of high profile corporate scalps including Shell, Vodafone and KPMG, has been jailed for 30 months in the US after admitting he paid secret kickbacks to clients to act as plaintiffs.

His firm Milberg Weiss - now known as Milberg - has netted more than $45 billion (£22.9billion) from major corporations over the years, including $24.5 million from Vodafone, a $90 million settlement for pension savers in the Shell oil reserves scandal and $225 million from KPMG and a US law firm over tax schemes.

Weiss, 72, was born in the Bronx and made his reputation by winning $1billion for investors in the Drexel Burnham Lambert junk bonds scandal in the Eighties. Described by adversaries as grizzled and power-hungry, often his name alone has been enough to scare corporations into settlements.

He is "manipulative, deceptive, ruthless", rival lawyer Howard Sirota says of him.

"He works 25 hours a day at getting more - more money, more power. That's who he is." Another rival says watching Weiss in court is "like watching a scene from The Godfather" because the man speaks so softly that it can be menacing.

Weiss admitted running an illegal scheme, which maintained a stable of professional plaintiffs with wide shareholdings in the world's biggest companies to launch class actions.

That gave Weiss the edge by making him the first to file and to win lead counsel status and a larger share of fees. He then paid kickbacks totalling more than $11million to the plaintiffs, hiding them from judges.

Weiss is the fourth lawyer from the firm to plead guilty to the conspiracy. Three ex-Milberg clients have also admitted to their part in the scam and an external lawyer is set to go to trial on charges of funnelling kickbacks to Milberg clients.

Before being sentenced, he apologised to his family, his former colleagues and his former firm "for my wrongful conduct".

"My remorse and contrition are beyond my ability to express. I promise that my contrition is honest," he said.

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