- Judge takes larceny off the table for Sanders and DiCarmine
- Once-proud law firm collapsed in income-inflation scandal
Two former executives of the defunct law firm Dewey & LeBoeuf LLP will face a new trial on charges they lied to investors before the firm filed for bankruptcy protection, but it won’t resemble the 3 1/2-month epic that ended in a mistrial last year.
A judge on Friday denied a dismissal bid from ex-Chief Financial Officer Joel Sanders and former Executive Director Stephen DiCarmine, ordering them to trial in September. But they got good news as well. The judge threw out 15 counts of grand larceny, meaning the pair won’t face the most serious charges. Grand larceny carries a maximum 25-year prison term. Now, they will be tried for fraud, with a top penalty of four years.
The firm’s former chairman, Steven Davis, struck a deal with prosecutors in January to avoid a second trial, and former client relations manager Zachary Warren came to a similar agreement earlier this month. Davis was barred from practicing law in New York or acting as an officer of a publicly traded company for five years, while Warren agreed to perform 350 hours of community service.
The first trial of Davis, Sanders and DiCarmine ended in a mistrial in October after a jury, mired in details of the alleged larceny, deadlocked after more than 20 days of deliberations. Prosecutors had accused them of inflating income as the firm’s cash flow diminished, using accounting tricks such as mischaracterizing payments. Warren, who was being tried separately, was set to face a jury next month.
Dewey & LeBoeuf was ranked 28th in gross revenue among large law firms by the American Lawyer, a trade magazine, in 2012 before work slowed and the firm filed for bankruptcy protection in May of that year, owing creditors $245 million.
Emily Tuttle, a spokeswoman for Manhattan District Attorney Cyrus Vance Jr., declined to comment after the hearing. Lawyers for Sanders and DiCarmine said they might consider agreements with prosecutors if deals are offered.
"We hope that the prosecution continues to engage in a reassessment of their case," Austin Campriello, an attorney for DiCarmine, said after court.
The state case is People v. Davis, 773-2014, New York State Supreme Court, New York County (Manhattan).