A Palm Springs man who prosecutors say was paid to act as a plaintiff in dozens of class-action lawsuits was sentenced Monday to six months' home detention and two years' probation and will pay more than $2 million.
U.S. District Judge John F. Walter rejected pleas from attorneys for Seymour Lazar that the ailing 80-year-old be sentenced to probation only, saying that Lazar, a retired lawyer, showed "no respect" for the judicial system.
Lazar pleaded guilty in October to obstruction of justice, filing a false tax return and making a false declaration. He could have been sent to prison for 18 years but prosecutors recommended home detention because of his age and deteriorating health. As part of his plea, Lazar, who made millions investing in Coachella Valley real estate, agreed to pay $600,000 in fines and $1.5 million in forfeitures.
Federal prosecutors accused him of receiving about $2.6 million to be a professional plaintiff in a series of class-action lawsuits filed by the New York firm Milberg Weiss, which was indicted in 2006 in connection with the alleged payment of $11.3 million to people like Lazar who agreed to be plaintiffs in hundreds of class-action suits. The payments enabled the firm to take lead status in those cases and collect a larger share of legal fees, according to government lawyers.
Lying under oath is one of the most serious violations an attorney can commit, Walter said. Moreover, by failing to report the illegal kickbacks on his tax returns, Walter said, Lazar "demonstrated an absolute arrogance," which he compounded by later instructing his accountant to destroy documents that may have implicated him.
"In my view the crimes and conviction in this case support a sentence in prison," Walter said.
Flanked by his two attorneys in the Los Angeles courtroom, Lazar wore a light blue cardigan draped over his suit jacket.
"I understand what you're saying about the seriousness of being a lawyer and filing papers that were not right," Lazar said when Walter asked whether he wished to make a statement.
Earlier this month, the State Bar of California suspended Lazar's license to practice law, and in the wake of Monday's sentencing hearing he will either resign or be disbarred.
Prosecutors said Lazar and his relatives -- including his wife, mother-in-law, son and daughter -- received kickbacks ranging from $8,000 to $250,000 for their roles as named plaintiffs in a string of suits against such targets as Genentech Inc., United Airlines and W.R. Grace & Co. Many of the payments were transmitted through lawyers in Palm Springs; Los Angeles; Santa Ana; Portland, Ore.; and Kansas City, Mo. Lazar's relatives weren't charged in the case.
His wife and several relatives and friends filled the back row of the courtroom Monday.
Three former Milberg Weiss partners who have also pleaded guilty in connection with the fraud and conspiracy scheme await sentencing. One of them, securities class action powerhouse William Lerach, will appear before Walter on Feb. 11.
The Milberg Weiss firm and co-founder Melyvn Weiss have pleaded not guilty, as has Palm Springs real estate attorney Paul Selzer, who is accused of laundering the firm's kickbacks to Lazar.