Opening statements in the criminal trial of three former top managers at Dewey & LeBoeuf wrapped up Wednesday with a defense lawyer suggesting that what prosecutors are calling fraud was merely “creative accounting.”
“Lawyers know these tricks,” said Andrew Frisch, who represents former chief financial officer Joel Sanders.
Frisch added that it’s a “regular part of the job” at a big firm to play with financial figures. He said prosecutors were overreaching: “There will be issues that will have you scratching your head as to why they’re playing out in a criminal courtroom.”
Sanders is one of three former Dewey & LeBoeuf executives who are charged by Manhattan state prosecutors with grand larceny, securities fraud and other charges in connection with their actions before Dewey’s abrupt bankruptcy in May 2012.
Lawyers for the other two defendants, Dewey chairman Steven Davis and executive director Stephen DiCarmine, gave opening statements on Tuesday. It is expected to be a four-to-six month trial.
On Wednesday, Frisch said that much of the evidence prosecutors are using against Sanders is taken out of context. For instance, in one email in which his client asked for a “clueless auditor,” Frisch suggested the comment was sarcastic.
At the same time, the defense lawyer blamed Francis Canellas, the firm’s director of finance, for any accounting improprieties. Canellas has pleaded guilty to grand larceny in the second degree, and his testimony is a key piece to the prosecutors case against the three Dewey executives.
“The firm dissolved before Canellas was given the proper title of chief accounting officer – that was his job,” said Frisch, calling Canellas a “bully” and someone “who wanted to prove himself” after vying for the position despite not being a certified public accountant.
After opening statements, prosecutors began calling witnesses including the former co-chair of Dewey’s insurance regulatory practice group, and began to lay out the compensation packages the executives received, as well as management structure of the firm.
Jane Boisseau, the former Dewey partner, said she was personal friends with Davis and DiCarmine, and at least “friendly” with Sanders. She described the firm’s management structure and how compensation was determined for its top brass.
“My recollection was that Steve Davis would visit me as a member of the Executive Committee and tell me what he thought he would set his compensation at, so he basically set his own compensation, but he typically asked for input,” she said, noting that he never proposed what she considered to be an unreasonable figure.
The trial will resume on Thursday, during which prosecutors intend to continue questioning Boiesseau.