FOR a man who gives millions to charity, Melvyn Weiss is hated by a lot of people. Once he was the most feared man in corporate America, making a fortune by chasing companies accused of ripping off investors and winning billions in settlement. Now it’s Weiss’s turn in the dock.

After years of digging, American prosecutors have brought charges against Weiss, 72, head of the New York law firm Milberg Weiss. They could put him behind bars for the rest of his life.

The government alleges that Weiss, a leading figure on the New York charity circuit and donor to the Democratic party, paid people to act as injured shareholders in class-action lawsuits against companies, earning $250m (£125m) in the process.

The investigation has shone a harsh light on the world of class-action lawsuits but it has also thrown up accusations of political motivation and revenge from corporate bosses who have been beaten up by Weiss’s firm.

It has been a tough week for the country’s formerly most feared class-action lawyers. Weiss’s old partner William Lerach, who won billions for Enron’s shareholders, pleaded guilty to a felony conspiracy charge. Under the agreement, Lerach will serve up to two years in prison and pay $8m to the government. Former Milberg Weiss partner Steven Schulman also pleaded guilty last week and said he would cooperate with the Los Angeles-based prosecution. David Bershad, another former partner, pleaded guilty in July.

Weiss and Lerach were the biggest names in shareholder lawsuits. Weiss landed more than $1 billion in settlements for investors hit by the Drexel Burnham Lambert junk-bond scandal in the 1980s and Lerach led the charge against Enron.

The 72-page indictment of Weiss depicts him as the architect of a conspiracy dating back to 1979. He is alleged to have paid $11.3m to maintain a stable of plaintiffs who could be used to swiftly bring a claim on behalf of shareholders. Until the law changed in 1995 the first law firm to file such an action could count on winning coveted lead-counsel status, and get the largest share of legal fees in a case.

According to the indictment, Weiss personally transported thousands of dollars in cash from New York to Florida to make payments to plaintiffs.

The charges follow a long investigation into Milberg Weiss and Lerach, who left in 2004 to set up his own firm after a bitter split with Weiss.

In a statement, Benjamin Brafman, attorney for Weiss, said his client “will be fully exonerated”.

Weiss’s firm put out a statement saying Milberg Weiss will “continue to fight for our clients and class members and to achieve the record recoveries for which our firm has long been known”. The firm’s active partners are not alleged to have been involved in any wrongdoing.

John Coffee, a professor at Columbia Law School, said both Weiss and his firm were in serious trouble: “Lerach made the sensible decision. Weiss is not accurately perceiving reality,” he said.

Coffee said that given the number and rank of the partners who had pleaded guilty, Weiss had “no realistic chance” of seeing off the prosecution.

“This firm used to be called Milberg Weiss Bershad Schulman & Lerach. Three of those people have pleaded guilty and one is dead,” he said.

Coffee, who knows both players personally, described Lerach as “intense, ruthless and driven”. Weiss, he said, was more of a backroom negotiator.

The difference in their strategies for fighting the case may be down to age, personality and the strength of the cases against them, said Coffee. “At 61 [Lerach’s age], it’s easier to contemplate a couple of years in jail.”

There were dire warnings for Weiss in Lerach’s plea deal, said James Cox, law professor at Duke University. Lerach has not cooperated with the authorities, a move Cox said may signal the government has enough evidence not to need him.

“Lerach must have felt the government had a very good case against him. He must have had a clear idea that his days were numbered.”

The trial of Weiss will mark the end of an era for class-action lawsuits. Legislation introduced in 1995 was supposed to curb the excesses of the industry. But then came the dotcom boom and the subsequent stock-market crash, which exposed corporate corruption. Class-action lawsuits soared and Milberg Weiss led the charge, giving weight to their oft-touted claims to be champions of the consumer.

Class-action lawsuits have fallen sharply in recent years. According to Stanford Law School, there were 497 cases in 2001 and 117 in 2006.

Coffee said the fall may in part be due to stiff corporate accounting rules brought in under the Sarbanes-Oxley law in 2002. The golden era for class-action lawsuits is gone, for now, but thanks to Weiss and Lerach and the upcoming trial they are not likely to be forgotten.

“Give the devil his due - he was damn good,” said Coffee.

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