July 9 (Bloomberg) -- Milberg Weiss ex-partner David Bershad pleaded guilty in Los Angeles federal court to a conspiracy charge related to a scheme to pay illegal kickbacks to plaintiffs in securities lawsuits filed by his law firm.

Bershad, 67, will forfeit $7.75 million, pay a $250,000 fine and cooperate with the investigation, according to the plea deal entered today. The conspiracy charge carries a maximum sentence of five years in prison. Sentencing is set for June 23, 2008.

For more than seven years, prosecutors have been probing whether Milberg Weiss, which has recovered more than $45 billion for investors in securities-fraud litigation, paid kickbacks to clients in exchange for them signing on to lawsuits. Bershad's agreement may bring the government closer to charging other lawyers from the firm led by securities litigator Melvyn Weiss, said Laurie Levenson, a professor at Loyola Law School in Los Angeles.

``This will shake up the investigation,'' said Levenson, a former federal prosecutor. She said Bershad ``certainly is an insider and he may be exactly what the prosecution needs.''

Milberg Weiss ``terminated'' its relationship with Bershad, who had been on leave, according to a statement today by firm spokesman Jeff Ingram. Bershad was indicted last year by a Los Angeles grand jury with ex-partner Steven Schulman and the law firm for making ``secret and illegal payments'' in cases for which the firm was paid $216 million.

January Trial

The case against the remaining defendants is scheduled for trial in January in Los Angeles federal court.

Bershad wouldn't comment after appearing in court today.

``David Bershad is committed to making amends for what he has done,'' his lawyer, Robert Luskin said in a statement. ``His efforts to right these wrongs, together with his many good works throughout his career, should be remembered along with the offense he admitted today.''

The law firm and Schulman, 56, who quit in December, have denied the allegations. Weiss and William Lerach, a former partner who left in 2004 to form a San Diego law firm, rejected plea agreements that would have required them to serve as much as four years in prison, according to two people familiar with the case. Lerach will step down as head of his own firm, Lerach Coughlin Stoia Geller Rudman & Robbins, within 60 days, a person familiar with his plans said.

Weiss and Lerach haven't been indicted. They are referred to in court papers detailing the alleged scheme as Partner A and Partner B.

According to the indictment, between 1983 and 2005, Bershad owned from 10 percent to 18 percent of the firm and his share of Milberg Weiss's profits totaled about $160.9 million.

Intermediaries

The government claims the firm, by way of intermediaries, sent payments to plaintiffs including Steven Cooperman, a former Beverly Hills eye surgeon who first informed investigators of the alleged kickback scheme in exchange for leniency in a faked art-theft case.

Bershad oversaw the firm's financial affairs and accounting department. He is the fourth individual to strike a plea deal in the probe. In January, Cooperman agreed to plead guilty to receiving more than $6.4 million in secret payments from Milberg on securities cases.

Benjamin Brafman, a lawyer for Weiss, and Herbert Stern, a lawyer representing Schulman, wouldn't comment. John Keker, Lerach's lawyer, didn't return a call for comment.

In April 2006, Howard Vogel, a retired mortgage broker who served as a plaintiff in Milberg securities-fraud cases filed in Delaware, agreed to plead guilty to accepting $1.1 million in payments. Also last year, a Los Angeles lawyer for Cooperman pleaded guilty to helping funnel Milberg payments to his client.

The case is U.S. v. Milberg Weiss Bershad & Schulman et al, 05-CR-587, U.S. District Court, Central District of California (Los Angeles).

To contact the reporter on this story: Edvard Pettersson in Los Angeles federal court at epettersson@bloomberg.net.

Last Updated: July 9, 2007 19:37 EDT