When a firm of Dewey & LeBoeuf's size and stature does the unthinkable and collapses, costing investors and creditors $200 million, you had better believe somebody is going to get sued - no matter how innocent the crash.

1. The Trial Against Dewey's Leaders
Begins
BCG ATTORNEY SEARCH

2. BCG ATTORNEY SEARCH
When a firm of Dewey & LeBoeuf's size and stature does the unthinkable and collapses,
costing investors and creditors $200 million, you had better believe somebody is going to
get sued - no matter how innocent the crash. That, at least, is the narrative of the defense
in a case taking place in a New York state court where prosecutors are claiming that three
former executives of Dewey are guilty of "[directing] a fraudulent scheme" to deceive
lenders and investors that Dewey was doing well. Former firm chair Steven Davis,
onetime executive director Stephen DiCarmine, and ex-chief financial officer Joel Sanders
are on trial.
The prosecutors are claiming fraud, that these executives ordered false financial
statements to be made that influenced the bond prospectus. The defendants face 100
criminal counts of larceny, scheming to defraud, falsifying business records and
conspiracy.
The defense, meanwhile, aims to prove that any accounting misconduct is the doing of
subordinates, and besides, Dewey collapsed due to a double whammy between the
recession and key lawyers exiting in 2011 and 2012.

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Seven former Dewey employees have agreed to cooperate in taking down the big guys,
with finance director Francis Canellas at the front, accompanied by former controller
Thomas Mullikan, former accounting manager Victoria Harrington, former director of
budgeting and planning Ilya Alter, and so forth. For their cooperation, Canellas will serve
two to six years in prison, while Mullikin five months in jail, and the rest will receive
community service.
Opening statements were made Tuesday, and the trial is expected to stretch across four
to six months, covering 1.5 million pages of emails and documents, and involving 79
witnesses.
Assistant district attorney Steve Pilnyak made the opening statements, quoting a few
suspicious emails written by the three executives that suggested they intended to dupe
investors.
Davis' attorney, Elkan Abramowitz, of Morvillo Abramowitz Grand Iason & Anello
countered such claims saying, "the firm failed for reasons having absolutely nothing to do
with misbehavior in the accounting department, which Mr. Davis did not know about and
did not condone.

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The firm failed because too many partners left, taking significant clients with
them…Despite their attempt to squeeze meaning out of a few emails, the people do not
have a shred of evidence.“
This article ‘The Trial Against Dewey's Leaders Begins' first appeared on BCG Attorney
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