Former Dewey controller testifies he falsified accounting records
The former controller of Dewey & LeBoeuf testified on Wednesday that he falsified accounting records to bolster the law firm’s income numbers in the years before its collapse.
The former Dewey official, Thomas Mullikin, said his boss, finance director Francis Canellas, asked him to make the changes to avoid breaking bank loan covenants, report the Am Law Daily and the Wall Street Journal (sub. req.). Mullikin and Canellas have both pleaded guilty and are cooperating with prosecutors in the trial of three former Dewey leaders for an alleged scheme to defraud lenders and bond buyers.
When the firm was $25 million short of meeting the loan covenants, Mullikin said, Canellas told him to reverse a $2.4 million write-off associated with a credit card linked to chief financial officer Joel Sanders, taken because the financial department couldn’t determine what the charges were for, according to the Am Law Daily account.
He also testified he changed a $3 million subleasing fee to an asset, and reclassified of counsel salaries as distributions to partners.
See also:
ABA Journal: “How Dewey management’s rosy picture masked an ugly truth”
