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Business Crimes Hotline

By ALM Staff | Law Journal Newsletters |
July 30, 2008

CALIFORNIA

Law Firm Accepts Plea Agreement in Class-Action Lawsuit Kickback Scheme

New York-based Milberg LLP accepted a non-prosecution agreement with the DOJ, the U.S. Attorney's Office for the Central District of California announced. Under the agreement, the New York-based firm admitted that senior members of its partnership distributed secret kickbacks to plaintiffs involved in over 165 class-action and shareholder derivative lawsuits. The lawsuits at issue span from the 1970s through 2005. The majority of the kickbacks were compensation to individuals for serving as named plaintiffs in Milberg's suits, while others were directed to stockbrokers in return for client referrals. According to the DOJ, Milberg agreed to pay a $75 million fine, employ a compliance monitor, and enact a Best Practices Program for two years. The guilty plea by the firm comes on the heels of similar pleas by four former Milberg partners. One individual defendant remaining in the government's case has been set for an August trial date.

GEORGIA

Former Home Depot Executive Pleads Guilty to Vendor Kickback Scheme and Tax Evasion

A former Home Depot executive pled guilty to a single count of conspiracy to commit wire fraud and three tax evasion counts. According to the DOJ, from October 2002 up to October 2007, the executive orchestrated a conspiracy to defraud his employer, Home Depot, by taking vendor kickbacks from companies seeking business. He allegedly provided kickbacks to other Home Depot employees both during his employment and continuing after, in order to insure that the products of vendors were included in stores nationwide. According to the DOJ, the kickback schemes totaled more than $2.5 million. In addition to these charges, the executive also pled guilty to federal income tax evasion relating to the payoff income from 2003 through 2005. Sentencing is currently scheduled for Sept. 2, 2008 in Atlanta.

CALIFORNIA

Law Firm Accepts Plea Agreement in Class-Action Lawsuit Kickback Scheme

New York-based Milberg LLP accepted a non-prosecution agreement with the DOJ, the U.S. Attorney's Office for the Central District of California announced. Under the agreement, the New York-based firm admitted that senior members of its partnership distributed secret kickbacks to plaintiffs involved in over 165 class-action and shareholder derivative lawsuits. The lawsuits at issue span from the 1970s through 2005. The majority of the kickbacks were compensation to individuals for serving as named plaintiffs in Milberg's suits, while others were directed to stockbrokers in return for client referrals. According to the DOJ, Milberg agreed to pay a $75 million fine, employ a compliance monitor, and enact a Best Practices Program for two years. The guilty plea by the firm comes on the heels of similar pleas by four former Milberg partners. One individual defendant remaining in the government's case has been set for an August trial date.

GEORGIA

Former Home Depot Executive Pleads Guilty to Vendor Kickback Scheme and Tax Evasion

A former Home Depot executive pled guilty to a single count of conspiracy to commit wire fraud and three tax evasion counts. According to the DOJ, from October 2002 up to October 2007, the executive orchestrated a conspiracy to defraud his employer, Home Depot, by taking vendor kickbacks from companies seeking business. He allegedly provided kickbacks to other Home Depot employees both during his employment and continuing after, in order to insure that the products of vendors were included in stores nationwide. According to the DOJ, the kickback schemes totaled more than $2.5 million. In addition to these charges, the executive also pled guilty to federal income tax evasion relating to the payoff income from 2003 through 2005. Sentencing is currently scheduled for Sept. 2, 2008 in Atlanta.

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