Former Dewey law firm executives to be criminally charged: source

Reuters News
Posted: Mar 05, 2014 10:15 PM

By Karen Freifeld

NEW YORK (Reuters) - Three former top executives from the bankrupt U.S. law firm Dewey & LeBoeuf are expected to be hit with criminal charges on Thursday related to their alleged misleading of lawyers and banks about the firm's financial straits, according to a person familiar with the matter.

Indictments are set to be unsealed in New York State Supreme Court in Manhattan against former Dewey Chairman Steven Davis, former Executive Director Stephen DiCarmine, and former Chief Financial Officer Joel Sanders, said the person, who spoke on condition of anonymity.

The Manhattan District Attorney has been investigating the executives since around April 2012, when a group of Dewey & LeBoeuf partners asked the prosecutor's office to examine "financial irregularities" at the firm.

It could not be learned what the specific charges against the three are, though the source said they involve felonies.

Lawyers for Davis, DiCarmine, and Sanders did not immediately return requests for comment. A spokeswoman for the Manhattan District Attorney did not immediately respond to an email for comment.

The expected charges were first reported Wednesday evening by the New York Times, quoting two unnamed sources.

Dewey & LeBoeuf collapsed in 2012, becoming the largest law firm in U.S. history to go bankrupt. The firm filed for protection under Chapter 11 of the Bankruptcy Code after lawyers left over disputes over unpaid compensation and questions about the firm's financial health.

At the time, Dewey's lenders were a bank group led by JPMorgan Chase & Co that also included Citi Private Bank, Bank of America Corp and HSBC Holdings Plc.

(Editing by Lisa Shumaker)