Former Dewey & LeBoeuf employee Zachary Warren at his arraignment in New York state court on criminal charges. (Rick Kopstein)
When the Manhattan district attorney’s office charged four defendants Thursday with a combined 106 counts of criminal fraud, theft and conspiracy for allegedly concocting a scheme that put Dewey & LeBoeuf on the path to bankruptcy, three of the accused—the firm’s former chairman, Steven Davis; its former executive director, Stephen DiCarmine; and its former chief financial offer, Joel Sanders—were familiar figures to observers, and victims, of the Dewey debacle.
The fourth man named in the case was a stranger to even longtime Dewey insiders.
So who is Zachary Warren, the 29-year-old former client relations manager who prosecutors say “helped launch the scheme and helped cover up the fraud” that Davis, DiCarmine and Sanders allegedly continued until Dewey began to implode? (All four have pleaded not guilty to the charges against them.)
Beyond providing a statement insisting on Warren’s innocence, one of his attorneys, Steven Hyman of McLaughlin & Stern, declined to answer any questions about his client. “Zach Warren is a young man with an impeccable background and character, with a bright future ahead of him,” Hyman said in the statement. “Dewey and LeBoeuf was his first job after college. He did nothing wrong. That he is charged in this case is a travesty.”
Warren graduated from Stanford University in 2006 with a degree in international relations, according to school records, and joined Dewey sometime in 2008 at an annual salary of $100,000, according to Assistant District Attorney Peirce Moser. As the firm’s client relations manager, his job was to pester partners to make sure clients paid their bills, according to two former Dewey employees.
Most former Dewey partners and employees contacted this week said he left little to no impression on them. Former Dewey partner Sean Gorman, now with Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing in Houston, said Friday that he had never heard of Warren until the indictments were unsealed. “He’s a man of mystery,” Gorman says. “He must have been in the bowels of the bureaucracy.”
The two ex-employees who were familiar with Warren’s role at the firm described him as one of Sanders’ “guys”—a small circle of staffers that also included finance director Frank Canellas. Warren and Sanders sometimes got drinks together, one of the former Dewey employees says, and the younger man could often be seen talking to Canellas outside Dewey’s midtown Manhattan offices. (Along with Davis, DiCarmine, Sanders and former Dewey controller Thomas Mullikin, Canellas is named as a defendant in a parallel civil action brought Thursday by the Securities and Exchange Commission.)
According to the indictment, the scheme began with Warren, Sanders and another individual working under Sanders’ supervision identifying “fraudulent adjustments that could be made to Dewey’s accounting records [to] falsely demonstrate compliance” with covenants attached to the firm’s bank loans. In order to adhere to the convenant requirements, the indictment says, Dewey’s former leaders routinely “cooked the books” to give the appearance that the firm had more revenue and fewer expenses than it actually did.
Of the four defendants, Warren is the only one charged in two separate indictments, the first of which contains six counts of falsifying business records and is dated last year. The second, in which Davis, DiCarmine and Sanders are also charged, includes email messages allegedly sent between Warren and Dewey’s three former leaders.
In one of those messages, Sanders allegedly told Warren on Dec. 30, 2008, that he would receive his full bonus if the firm satisfied its bank covenants. A day later, Sanders and an unidentified employee allegedly laid out fraudulent adjustments to the firm’s finances in Warren’s presence, calling the document the “Master Plan.” Warren allegedly followed up by sending the unnamed employee the following message: “Hey man, I don’t know where you come up with some of this stuff, but you saved the day. It’s been a rough year but it’s been damn good. Nice work dude. Let’s get paid!”
Warren left Dewey in mid-2009—after earning a $75,000 bonus in 2008 and a $40,000 bonus in 2009, according to Moser—and enrolled in Georgetown University Law Center. He graduated from Georgetown in 2012, the school confirmed Friday. With time on the Georgetown Law Review on his resume, he took a clerkship for U.S. District Court Judge J. Frederick Motz in Maryland. From there, he moved to Tennessee for a job as a clerk for the Memphis-based U.S. Court of Appeals for the Sixth Circuit Judge Julia Smith Gibbons.
Bar records show he was admitted to practice law in Washington, D.C., last July.
On Thursday, Warren was released from custody on $200,000 bail upon entering his plea at an arraignment of the four defendants. New York State Supreme Court Justice Robert Stolz also gave Warren, who lives alone, permission to return home. Before authorizing his release, Stolz asked Warren whether he would be able to return to New York for the required court hearings if he traveled back to Tennessee. A second attorney representing Warren, Michael Armstrong, assured the judge that that would not be a problem. After being let out of handcuffs, Warren joined his parents, who were in the courtroom gallery awaiting his release.
In addition to going home, as of Friday, Warren still had a job to go back to. Sixth Circuit clerk Deborah Hunt said he was still employed by Gibbons. She declined further comment.