Guilty Pleas Unsealed in Dewey & LeBoeuf Management Fraud

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This week, a judge in New York unsealed the records of seven former employees of Dewey & LeBoeuf who have pleaded guilty in connection with accounting fraud at the firm. The records were sealed when criminal charges were filed against leaders of the Dewey & LeBoeuf law firm by the Manhattan District Attorney’s office. The record of the first to plead guilty, Francis Canellas, was unsealed on Thursday, while the records of the rest six employees were unsealed on Friday.

The employees, who range from Dewey’s controller to its billing director, have agreed to cooperate with prosecutors in the matter targeting the former leaders of the law firm. Dewey’s former chairman, Steven Davis, 60, Executive Director Stephen DiCarmine, 57, and Chief Financial Officer Joel Sanders, 55, were charged March 6 for creating a conspiracy to cheat stakeholders as they connived to keep the law firm afloat and its credit lines intact.

  

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The employees who have pleaded guilty are mostly billing staff and back-office workers who worked closely with Joel Sanders, the firm’s former chief financial officer, and with Canellas. Thomas Mullikin, the former controller stated, “Beginning in or around early January 2009, I began participating with Canellas, [Jyhjing] Harrington, and others at Dewey & LeBoeuf in a scheme to defraud users of the firm’s financial statements and others by misstating the firm’s financial performance.”

Canellas said in his statement that everything was known to the leaders of the law firm and that “Sanders, Mullikin and I, along with others, provided financial statements and other information to the banks and private placement investors that we knew to be false.”

Lawyers of the ex-Dewey leaders have fired back saying there isn’t a shred of evidence tying their clients to any wrongdoing. They have implied that the cooperating witnesses are trying to save themselves by implicating others, and that’s no surprise.

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