Melvyn Weiss, who dominated the field of shareholder class-actions for three decades before pleading guilty to paying plaintiffs kickbacks, has avoided a return to jail after violating the terms of his supervised release from prison.
Weiss, 77, reached a deal with federal prosecutors on the eve of a Friday hearing in U.S. District Court in Los Angeles on whether to revoke his release following an arrest in December for driving under the influence in Boynton Beach, Florida.
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The agreement came after Weiss pleaded guilty to the DUI charge on April 18 in Florida and was sentenced to 12 months probation and 50 hours of community service, court records show.
At a Los Angeles court hearing on Friday, U.S. District Judge John F. Walter said that Weiss had been publicly embarrassed by the DUI episode and had learned his lesson.
Weiss told the judge that he has pledged "that drinking and driving will never again happen in my lifetime."
The law firm that Weiss helped found, Milberg LLP, was once a powerhouse in suing large corporations on behalf of investors. He is perhaps best known for obtaining a $1.3 billion settlement for investors harmed by the Drexel Burnham Lambert Inc junk bond scandal in the 1980s.
Weiss pleaded guilty to a federal racketeering charge in March 2008 for his role in a scheme in which Milberg lawyers paid kickbacks to plaintiffs who agreed to participate in lawsuits. From the 1970s to 2005, prosecutors said, Milberg reaped $239 million in legal fees by making improper payments to plaintiffs in more than 165 lawsuits.
Weiss was sentenced to 30 months in prison in June 2008 and ordered to forfeit $9.75 million and pay a $250,000 fine. He also was ordered to three years of supervised release. His plea bargain stipulated that he wouldn't break any laws while on probation, and that a violation could mean a return to prison.
Four one-time Milberg partners ultimately pleaded guilty in the kickbacks case, including Weiss and William Lerach, who split from the firm in 2004 to establish what is today called Robbins Geller Rudman & Dowd. Milberg itself agreed to pay $75 million to settle the investigation.
The case is United States v. Lazar, et al, U.S. District Court, Central District of Los Angeles, No. 05-cr-00587.
(Reporting by Dana Feldman in Los Angeles and Nate Raymond in New York; Editing by Martha Graybow and Phil Berlowitz)