Partners jailed over class-actions scam

Two former partners of US class action law firm Milberg Weiss have been jailed for six months for their part in a scheme to pay clients to be plaintiffs in actions against companies.

The firm maintained a stable of paid plaintiffs who agreed to be named in lawsuits in exchange for a cut of the legal fees. The judge branded the scam "breathtaking".

David Bershad, 68, and Steven Schulman, 57, were sentenced in separate hearings in which Judge John Walter rejected calls for leniency. Bershad will also pay $8 million (£5 million). Schulman has paid about $2 million in fines and forfeiture of gains from the tainted cases.

In 2007, Bershad became the first of four Milberg partners to plead guilty to the wide-ranging kickbacks scheme that helped the firm, now known as Milberg, become one of the top class-action firms.

Prosecutors say the scam went on for 20 years and more than $11 million was paid to professional plaintiffs.

Milberg Weiss has a string of high-profile scalps on its belt including Shell, Vodafone and KPMG. By its own estimates it won more than $45 billion in suits against corporations.

In 2004 alone the firm paid out $30 billion in settlements to investors in class actions.