A filing yesterday in U.S. Bankruptcy Court revealed the names of a few thousand who invested in the Ponzi scheme orchestrated by Bernie Madoff, and included as a customer is Mel Weiss from the plaintiff class action law firm Milberg Weiss Bershad & Schulman LLP who had four accounts with the funds. Weiss was convicted last year with several of his law partners for their roles in a racketeering conspiracy allegedly spanning decades in which serial plaintiffs were illegally paid to file shareholder class action suits against corporations. The firm also was indicted but managed to escape prosecution after it -- now simply known as Milberg LLP -- agreed to pay a $75 million fine and employ a compliance monitor.
It's ironic that a former name partner of Milberg was a presumably defrauded investor in the Madoff funds because the class action firm now is representing a group of those investors:
Bernard Madoff is said to have ruined many a fortune. But for one law firm, history’s largest alleged Ponzi scheme is opening the door for a comeback. The law firm formerly known as Milberg Weiss—considered the go-to firm for shareholder class-action suits until a 2006 kickback scandal landed several of its name partners in prison—is once again in demand. The firm, now called simply Milberg LLP, has signed up more than 100 Madoff victims, the biggest group assembled by any one firm to date. All told, these clients face estimated losses of $1.5 billion to $2 billion. In addition to representing a potential windfall in fees, the cases could help restore the firm’s reputation.
Milberg has teamed up with law firm Seeger Weiss -- where Mel's son Stephen Weiss is a name partner -- on the cases. No word on whether Mel Weiss from his prison cell now is a client of his former firm and Seeger Weiss.
Speaking on the intregity of the remaining partners at Milberg, Ariana Tadler said: "The lawyers that stayed were not implicated or involved in the indictment, and we are going to work just as aggressively as we always have to do the best for our clients."
Although Milberg LLP claims that none of its remaining partners participated in the illegal conduct the question still begged is whether some of them were aware of the scheme and what, if any, steps they took to address the problem. After all, what did they think was happening when the same individuals repeatedly were serving as plaintiffs in dozens of lawsuits? Indeed, in 1995, Congress enacted the Private Securities Litigation Reform Act specifically for the purpose of curbing the abuses for which Milberg Weiss and its partners were indicted, and surely this legislation raised a red flag even among the innocents at the firm.
Frankly, the apparent failure of Ariana Tadler and other current partners at Milberg to uncover the racketeering crimes of Mel Weiss that allegedly occured for decades at the law firm right under their noses hardly instills confidence in their ability now to represent effectively those burned by Madoff.
Weiss and Bershad's names appear on a 163-page list of customers of Bernard L. Madoff Investment Securities LLC. Patricia Hynes, another former name partner of Milberg Weiss who now practices at Allen & Overy, also appears to have been a customer of Madoff, who has allegedly admitted to running a $50 billion Ponzi scheme since the 1970s.
And "it's not just the Milberg attorneys who are listed as customers":
Howard Vogel, the Englewood, New Jersey-based broker that received kickbacks from Milberg Weiss to serve as a name plaintiff, also is listed as a client. So too is his retirement fund, which was used as the name plaintiff in some litigation by Milberg.