Three former executives at Dewey & LeBoeuf LLP, once the No. 3 legal adviser to banks handling merger deals, were charged with a “blatant” $200 million fraud that spurred the largest law firm bankruptcy in history.
The three, including the chairman, executive director and chief financial officer, were accused of using accounting gimmicks similar to those that sent top executives at WorldCom Inc. and Tyco International Ltd. to prison a decade ago. Authorities cited e-mails in which the men referred to “fake income,” “cooking the books” and “accounting tricks.”
Dewey, which once had 1,300 lawyers in Manhattan and 3,000 internationally, filed for bankruptcy protection in May 2012, owing creditors $245 million.
Accused in a 106-count indictment were Chairman Steven Davis; Stephen DiCarmine, the former executive director; and Joel Sanders, the ex-chief financial officer. Ex-client relations manager Zachary Warren was also arrested. Seven others, some of whom are cooperating with prosecutors, have pleaded guilty, Vance said. They weren’t identified.
The Securities and Exchange Commission yesterday sued Davis, DiCarmine, Sanders and two others, alleging a “bold and long-running accounting fraud.”
The four criminal defendants, in handcuffs and suits, appeared in state Supreme Court in Manhattan and denied wrongdoing. Davis, DiCarmine and Sanders were freed on $2 million bail, Warren on $200,000.
Elkan Abramowitz, an attorney for Davis, who lives in London, said his client acted in “good faith” and “in service of the firm’s best interest.” DiCarmine’s lawyer, Austin Campriello, said the indictment “is guilty of scapegoating” and “spins some inartful e-mails into crimes.”
“They are attempting to elevate traditional and typical accounting adjustments to crimes,” Ned Bassen, a lawyer for Sanders, said in a phone interview.
Michael F. Armstrong, Warren’s lawyer, declined to comment.
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In-House Counsel News
Deutsche Bank Compliance Chief Procter Will Leave for Law Firm
Deutsche Bank AG’s compliance chief, Andrew Procter, will leave for law firm Herbert Smith Freehills LLP as the company grapples with regulatory probes and lawsuits.
Procter, who was also Deutsche Bank’s head of government and regulatory affairs, will join the law firm’s financial services regulatory practice as a partner in June, the firm said in a statement.
Procter led the U.K. Financial Services Authority’s enforcement division from 2001 to 2005, before joining Deutsche Bank.
BakerHostetler, Gowlings, K&L Gates: Lateral Partner Moves
Baker & Hostetler LLP added Los Angeles lawyer Alan Friel to the firm’s intellectual property group and privacy and data protection and information technology and transaction teams.
Friel, who joins from Edwards Wildman Palmer LLP, will coordinate the firm’s advertising, retailing and e-commerce industry initiative.
While at Edwards Wildman, Friel was the chairman of the media and technology transactions group, the co-chairman of the technology, media and telecommunications industry practice, and was on the steering committees of both the IP and privacy and data security departments.
Canadian firm Gowlings added Jeffrey Beedell, formerly of McMillan LLP, where he headed the Supreme Court advocacy practice, as a partner in the Ottawa office and member of the Supreme Court Services Group.
The Sydney office of K&L Gates LLP added Liz Gray as a partner in its investment management practice. She joins from Henry Davis York, along with three other lawyers.
Government contracts lawyers Stanley Soya and Michael Golden, formerly of Pepper Hamilton LLP, joined Baker Botts LLP as partners in the firm’s Washington office.
Akerman LLP added a team of three commercial litigators to the firm’s Chicago office, who enhance the firm’s financial services sector. The new litigators, previously with Ulmer & Berne LLP, include partners Kasey Folk and Eric Gribbin.
Carlton Fields Jorden Burt added William P. Sklar and C. Cory Mauro to its West Palm Beach, Florida, office. Sklar, a professor at the University of Miami, will be of counsel in the firm’s real estate and commercial finance practice group. Mauro joins the national trial practice business litigation section.
Littler Mendelson PC added employment lawyer and business competition litigator Kevin E. Griffith, formerly of Porter Wright Morris & Arthur LLP, as a shareholder in the Columbus, Ohio, office.