A former Hunton & Williams and Willkie Farr & Gallagher partner will return to court Wednesday for sentencing on charges that she cheated her former firms and client MasterCard Inc. out of $7.8 million.
The government is recommending Keila Ravelo be sentenced to six years, as well as three years of supervised release, while Ravelo says four years in prison “would be the only just outcome.”
Ravelo is set to appear before U.S. District Judge Kevin McNulty of the District of New Jersey for sentencing at 2 p.m. Wednesday.
Ravelo pleaded guilty in November 2017 to one count each of conspiracy to commit wire fraud and tax evasion. Seven remaining counts will be dropped, as part of a plea agreement.
Ravelo was first arrested alongside her now-estranged husband, Melvin Feliz, in December 2014. New Jersey federal prosecutors alleged the two used bogus litigation vendor companies to obtain more than $7.8 million from Willkie and Hunton & Williams and their client, MasterCard.
Ravelo and Feliz were accused of setting up a pair of dummy litigation support companies, then using her partner position at the two law firms to submit false invoices and funnel millions of dollars to the vendors, which provided little or no service.
Federal prosecutors said Ravelo and Feliz put most of the money into a joint bank account and used it for personal expenses and investments. Prosecutors also said Ravelo and Feliz, after swindling nearly $8 million, failed to pay $2 million in taxes.
Feliz admitted to his role in the scheme in August 2015, pleading guilty to one count of conspiracy to commit wire fraud and one count of tax evasion. In his case, the parties stipulated to a four-year sentence, to be served consecutively to his 10-year sentence for a narcotics conviction.
In her sentencing memo asking for only four years, Ravelo’s defense attorneys at Gibbons, Lawrence Lustberg and John Haggerty, placed blame on Feliz.
“It was Feliz who initiated the fraudulent scheme at issue and opened and operated the two litigation support companies that served as the scheme’s linchpin, for his benefit, from inception,” Ravelo’s attorneys said. “His deceit, manipulation and abuse of Ms. Ravelo throughout their marriage also illuminates her aberrational decision to take the actions that she did.”
Her lawyers said Ravelo has already suffered significant punishment and deterrence, through the extensive case publicity, her disbarment, destroyed reputation and forfeiture of all her assets, leaving her “virtually penniless.”
“Her psychological and even physical health, already tenuous, have been devastated, so that she is, in every sense, a true shell of her former self,” they said.
‘Stupid and Wrong’
In a pre-sentencing report cited by her attorneys, Ravelo wrote that before joining the conspiracy with her husband in 2012, she represented MasterCard for over a decade. “During that time, I gained the trust of MasterCard’s most senior executives and developed a lucrative, and legitimate, legal practice. But my professional success was a point of contention throughout my troubled, abusive marriage to [Feliz].”
She added that she “worked hard to help [Feliz] succeed in his business endeavors” but those efforts took a devastating turn in 2012. She said she learned that Feliz had not, in fact, been providing much of the work product that he had been paid to provide for Willkie, and, in turn, MasterCard, and “I pleaded with him to make it right by producing the work. He did not.”
“Instead of reporting him, as I should have, I helped to cover up his fraud. To say that this was an extremely poor decision is an understatement, and I make no excuses for it. I was stupid and wrong,” she wrote.
“I cannot adequately express in words how sorry I am to the law firms for which I worked, to my client, MasterCard, which reposed its trust in me, and to my family and friends, whom I have caused incredible pain and embarrassment,” she said.
Meanwhile, the government’s six-year recommendation for Ravelo is the top of the parties’ agreed-upon sentencing range in her plea agreement. The government said it is recommending a sentence longer than that of Feliz for the same conspiracy because her conduct was worse. “Ravelo, not Feliz, used a position of trust to commit her crime,” wrote Assistant U.S. Attorneys Andrew Kogan and Brian Urbano in New Jersey.
Ravelo went to great lengths to further the wire fraud conspiracy and deceive her law firms, prosecutors said, adding “Ravelo was able to pull the wool over” her firms’ eyes.
For instance, Ravelo led an associate at Willkie—whose professional life “Ravelo essentially controlled”—to submit a chart dealing alleged work by the vendor to Willkie, making it appear that the firm and associate had first-hand knowledge of the vendor’s work product, prosecutors said.
“Ravelo did what only she had the power to do and what only a committed and die-hard fraudster would do—she doubled down on her scam by finding a new and ingenious way to prolong the conspiracy,” prosecutors said.
The government pointed to the reputation damage of her former law firms and her client, apparently referring to MasterCard. “Ravelo’s actions led to repeated news headlines concerning how Ravelo defrauded one of the largest companies in the world and two prestigious law firms. No one can know exactly how many existing or potential clients, if any, chose other representation because of Ravelo’s scandal,” the prosecution said.
Meanwhile, the law firms had to notify the client of Ravelo’s deceit, prosecutors said. “It is hard to imagine a law firm/client relationship existing on the same level after going through such an ordeal,” they added.