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Dewey & LeBoeuf former chief financial officer Joel Sanders has been found guilty of concealing the failing financial health of the firm ahead of its collapse.
The Manhattan jury in the three-month retrial of the case found Sanders guilty and acquitted former Dewey executive director Stephen DiCarmine of the same charges. Sanders will spend up to four years in prison.
Manhattan district attorney Cyrus Vance said: “Joel Sanders used his position as chief financial officer to mask the failing financial health of Dewey & LeBoeuf, leading insurers and lenders to believe the firm was still above water.
“For years, the firm’s financial department – led by Sanders – orchestrated a scheme to hide and manipulate its losses, directing employees to alter accounts to feign compliance with the firm’s lending agreements. With today’s verdict, a top executive has been held accountable, in addition to the seven employees who have already pleaded guilty.”
In 2015, the criminal trial of three former Dewey & LeBoeuf executives in the US ended in a mistrial after four months of hearings. The mistrial was declared yesterday following the failure by jurors to reach a verdict on more than 90 counts including charges of grand larceny after a month of deliberations. In that trial, Dewey chair Steven Davis, DiCarmine and Sanders were cleared of multiple criminal charges relating to claims they falsified records that led to the largest collapse of a law firm in history.
The trio faced a maximum 25-year sentence each if convicted on grand larceny charges.
A parallel trial in the UK of four ex-Dewey partners against Barclays Bank concluded in June 2015, with three partners settling and one, Londell McMillan, ordered to repay a £352,000 capital loan to the bank following a High Court ruling.
Barclays launched the High Court litigation in order to recoup money from partners of the now defunct firm, which collapsed in May 2012. When Dewey folded, more than 200 partners owed Barclays Bank around $60m (£39m), which they had borrowed to fund their equity contributions to the firm and which had been lost in the firm’s bankruptcy.
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