Earlier this week, we mentioned that Manhattan District Attorney Cyrus Vance was interested in unsealing the criminal case filed against Dewey & LeBouef’s former executives. Such a move would have the potential to reveal the identities of the “secret seven” — the finance folks who turned to the authorities after things at the failed firm went sour.
Today, documents in the case are slowly being unsealed, and we’ve got info on those who squealed to law enforcement. Get your fill of schadenfreude here…
Right now, information is available for just one of the secret seven, but we expect that more may be released as the day continues. Please check back here for the latest updates.
The first member of the secret seven is Francis Canellas, the failed firm’s former finance director. Canellas joined LeBoeuf Lamb in 2001 and worked as a junior accountant. Canellas became the finance director after the merger with Dewey Ballantine, and reported directly to Joel Sanders, Dewey & LeBoeuf’s CFO. Canellas pleaded guilty as part of an agreement with the DA’s Office in mid-February.
Here are some of the details, according to the New York Law Journal (reg. req.):
In an exhibit attached to his Feb. 13 plea agreement, Canellas discussed how he worked with firm leaders, including former chairman Steven Davis, former executive director Stephen DiCarmine, former CFO Joel Sanders, former controller Thomas Mullikin and other insiders to make misleading statements to banks.
“Sanders, Mullikin and I were the main contacts with individuals at JPMorgan, the placement agent on the private placement. Sanders, Mullikin and I, along with others, provided financial statements and other information to the banks and private placement investors that we knew to be false and intentionally failed to provide information that we knew would be of interest to the banks and investors,” according to an exhibit in Canellas’ court papers.
In exchange for disclosing “all information concerning any criminal conduct whatsoever” with regard to Dewey & LeBoeuf’s alleged wranglings with white-collar crime, Canellas will receive a maximum of five to 15 years in prison, but the DA will supposedly recommend two to six years in jail with full cooperation.
We’ll be sure to let you know who else will be singing the blues in Sing Sing as we find out.
Ex-Dewey Finance Director Pleads to Grand Larceny [New York Law Journal (reg. req.)]