White-Collar Crime

Arguing lack of intent, lawyers seek dismissal of charges against former Dewey & LeBoeuf leaders

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Leaders accused of cooking the books at a once-storied, 1,300-attorney law firm lacked criminal intent, their lawyers said at a Monday court hearing in New York state court, arguing that criminal charges against their clients should be dismissed.

“I don’t think we can write the definition of larceny out of a larceny case,” said attorney Austin Campriello. He represents Stephen DiCarmine, who served as executive director at now-defunct Dewey & LeBoeuf.

But prosecutor Peirce Moser said DeCarmine and his co-defendants “knew there were lies tucked into the paperwork,” the Wall Street Journal Law Blog (sub. req.) reports. Hence, the defendants “didn’t need to be intimately familiar with every single entry,” Moser contended.

DeCarmine and his co-defendants, former Dewey & LeBoeuf chairman Steven Davis and chief financial officer Joel Sanders, pleaded not guilty in the Manhattan Supreme Court case that followed Dewey’s collapse and bankruptcy filing in 2012. They are accused of inflating revenue and hiding the deteriorating financial situation at the law firm from lenders and investors who participated in an unusual private bond placement to raise operating funds in 2010.

Also facing charges and seeking a separate trial is Zachary Warren, who worked at the firm before enrolling in law school. He has pleaded not guilty and his lawyer, too, argues that Warren had no criminal intent—because he was too inexperienced to realize that accounting techniques being used were improper.

“If you don’t know it’s wrong, it’s hard to have an intent to defraud,” said attorney Paul Shechtman of Zuckerman Spaeder, at Monday’s hearing.

Meanwhile, the Securities and Exchange Commission has reached a partial settlement on undisclosed terms with former Dewey controller Thomas Mullikin, which has been approved by a federal judge in Manhattan, the New York Law Journal (sub. req.) reports.

“He acknowledged his involvement and wanted to put this behind him.” his lawyer, Kenneth Kaplan of Kaplan & Katzberg, told the legal publication.

Mullikin, as well as other ex-employees of the now-defunct Dewey, took pleas earlier in criminal cases related to their work there.

Related coverage:

ABAJournal.com: “Honors Georgetown law grad, 29, retains 6th Circuit clerkship despite being charged in Dewey case”

See also:

ABAJournal.com: “How appeasement and high partner guarantees led to Dewey’s downfall”

ABAJournal.com: ” ‘Voracious greed’ of some Dewey partners contributed to firm collapse, former leaders say”

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