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New Allegations Made Against Dewey & LeBoeuf Executives

New allegations have been brought against two former executives from Dewey & LeBoeuf LLP by the bankruptcy trustee who is unwinding the defunct firm, according to The Wall Street Journal. The lawsuit asks for the return of $21.8 million the two executives were paid as the firm moved further into insolvency.

The complaint was filed on Monday in U.S. Bankruptcy Court in Manhattan. It names Stephen DiCarmine, former executive director and Joel Sanders, former chief financial officer. This complaint was filed six months after the men were first sued by Dewey trustee Alan Jacobs.

The updated lawsuit includes civil and criminal allegations against the men in March by the district attorney’s office for Manhattan and the Securities and Exchange Commission. The charges include that the men used fraudulent accounting practices to cover up the state of the firm’s finances before it collapsed in 2012. Also charged are former chair Steven Davis and a low-level employee. All four of them have denied any wrongdoing in the firm’s collapse.

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The lawsuit also makes mention of plea agreements that have been reached with seven former employees of the law firm. They admitted to carrying out plans that overstated the revenue of the firm, covered up cash shortages and hid losses.

According to the lawsuit, DiCarmine and Sanders were “acutely aware of Dewey’s deteriorating financial condition” and “went to considerable lengths to ensure that their own financial well-being was not disrupted.”

On Tuesday, an attorney for Sanders, Ned Bassen, said, “the allegations are palpably wrong…and the evidence will show that [Mr. Sanders] continuously urged the law firm not to spend money they did not have, not to increase their credit, not to draw down on their line of credit with the banks–and was constantly rebuffed.”

DiCarmine’s attorney, Austin Campriello, said, “No one was more faithful and loyal to Dewey & LeBoeuf than Steve DiCarmine. And no one worked harder to make the firm a success.”

The lawsuit claims that DiCarmine and Sanders were compensated $21.8 million under the contracts.

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Posted by on June 11, 2014. Filed under Law Firm News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.



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