Manhattan prosecutors Thursday blasted three white-shoe lawyers as greedy and arrogant for hiding their firm’s snowballing financial problems from auditors and even their own partners as it buckled in the biggest law-firm bankruptcy in the nation’s history.
“These defendants acted out of a shocking mix of greed and hubris,” said Assistant District Attorney Peirce Moser in Manhattan Supreme Court. “Defendants Davis, DiCarmine and Sanders concocted the scheme and kept it going for nearly the life of Dewey & LeBoeuf until it collapsed in 2012.”
Ex-Chairman Steven Davis, 60, former Executive Director Stephen DiCarmine, 57, and ex-CFO Joel Sanders, 55, were arraigned Thursday on numerous counts of grand larceny and fraud charges for lying to lenders and investors and stealing nearly $200 million from insurers. They face up to 25 years in prison.
A fourth defendant, Zachary Warren, 29, who was a client relations manager at the firm, was also charged.
All four pleaded not guilty before Justice Robert Stolz. Bail for each of the three high rollers was set at a whopping $2 million; Warren’s bail was set at $200,000.
The big three — who each earned over $2 million — brazenly falsified audits and records to make the firm appear financially healthy, allowing them to dole out extravagant salaries and bonuses from 2008 to 2011, prosecutors charge.
The trio even bragged about their success cooking the books to the tune of millions of dollars, according to court documents.
“You always do in the last hours,” DiCarmine wrote in a Dec. 29, 2008, email congratulating Sanders on finagling the firm’s revenue numbers. “Tell [your wife], stick with me! We’ll buy a ski house next. Just to keep the ship a float [sic]…”
DiCarmine — a cousin and character witness for murderous ex-mob boss Vincent “Vinny Gorgeous” Basciano — and Sanders were both sued last year in Manhattan Bankruptcy Court over the lavish pay packages they pocketed as their powerhouse firm headed into the tank.
Dewey & LeBoeuf was formed in 2007 through the merger of the storied firm of Dewey Ballantine — founded by one-time New York Gov. Thomas E. Dewey — and LeBoeuf, Lamb, Greene & MacRae.
Billings plummeted when the economy melted down, and most of the 300 partners bailed out in January 2012 after learning they would only share about $125 million in profits from the previous year. The firm filed for bankruptcy protection that May.
Lawyers for Davis, DiCarmine, Sanders and Warren insisted on their clients’ innocence.