Dewey & LeBoeuf Epic Collapse: 4 Executives Charged With Fraud
Three former Dewey & LeBoeuf law firm executives and one former manager have all been charged with fraud according to various news outlets. Dewey & LeBoeuf’s epic collapse was the largest of its kind for a U.S. based law firm. The fallout from the Dewey & LeBoeuf epic collapse cost not only the jobs of thousands of employees, but also hundreds of millions of dollars in estimated losses for banks, lenders and investors.
According to CNN.com, Manhattan District Attorney Cyrus Vance announced charges against “ex-chairman Steven Davis, former executive director Stephen DiCarmine and ex-chief finance officer Joel Sanders with grand larceny, scheming to defraud and falsifying business records, as well as conspiracy. Vance also charged former client relations manager Zachary Warren with scheming to defraud, falsifying business records and conspiracy.” The charges include grand larceny, securities fraud and falsifying business records.
The law firm of Dewey & LeBoeuf was created following the merger between the Dewey Ballantine and LeBoeuf Lamb law firms back in 2007. Based globally, the firm had approximately 3,000 employees on the books, including 1,300 lawyers in their New York office. When the firm ran into financial issues however, the executives that have now been charged allegedly lied about their books.
According to a report found on Reuters.com it was an email that eventually did these executives in:
“Less than a month after writing that he did not want to ‘cook the books anymore,’ but facing a deadline to show lenders that Dewey & LeBoeuf had enough cash, the law firm’s top finance executive emailed a colleague that he ‘came up with a big one,’ according to investigators.
‘You always do in the last hours,’ the law firm’s executive director Stephen DiCarmine replied to the December 29, 2008 email from chief financial officer Joel Sanders, according to investigators. ‘That’s why we get the extra 10 or 20% bonus.’
This type of scandal that Dewey & Leboeuf have created remind many of a similar case over a decade ago, referring to the infamous Enron scandal that occurred in the late nineties. According to NY Times:
“The indictment paints a portrait of a law firm being run like a criminal enterprise. Mr. Vance said his office had already secured guilty pleas from seven other people who once worked for Dewey. A person briefed on the investigation said several were cooperating with the two-year-old investigation.”
But whether or not the epic Dewey & Leboeuf collapse is on the Enron level, the D.A. simply told reporters, “I can’t say.”
All four men charged in the Dewey & LeBoeuf epic collapse pleaded not guilty in Manhattan criminal court on Thursday March 6th.