Fourteen months after their indictment and two years after their firm failed, three former Dewey & LeBoeuf leaders will face a jury before Acting Manhattan Supreme Court Justice Robert Stolz Tuesday morning.
In a sprawling, 62-page indictment last March, prosecutors alleged that, from late 2008 to early 2012, former Dewey chair Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders schemed to hide the troubled state of the firm’s finances from bank lenders by rejiggering millions of dollars in expenses and revenues to avoid breaching loan covenants. Prosecutors claim the three men then used the allegedly inflated financial statements to convince 13 insurance companies to invest in a $150 million bond issued by the firm in April 2010—at a time when they had no realistic expectation that those investors and lenders could be repaid.
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