The Blame Game Begins: Opening Statements In The Dewey & LeBoeuf Trial

Not surprisingly, the attorneys for the prosecution and the defense painted two drastically different pictures of the firm’s demise.

Nearly three years to the day since the once-mighty Dewey & LeBoeuf filed for bankruptcy, the criminal trial of the firm’s former executives kicked off in front of a packed courtroom. In the audience were a number of familiar faces from the firm’s glory days, ranging from former support staff to retired partners.

The three defendants, Steven Davis, Stephen DiCarmine, and Joel Sanders, face one count of Scheme to Defraud in the First Degree, one count of Conspiracy in the Fifth Degree, 15 counts of Grand Larceny in the First Degree, one count of Securities Fraud, and multiple counts of Falsifying Business Records in the First Degree. Sanders also faces multiple additional counts of Falsifying Business Records in the First Degree for actions he allegedly took in connection with the firm’s banks and lenders.

The fates of Sanders and The Steves lie in the hands of a panel of 12 jurors and six alternates — 10 women and eight men. These poor, unfortunate souls are facing several months of what, if opening statements were any indication, will likely be very dry testimony and evidence regarding accounting improprieties. Not surprisingly, the attorneys for the prosecution and the defense painted two drastically different pictures of the firm’s demise.

The prosecution addressed the jury for nearly two hours on accounting practices. The unimpassioned monologue was accompanied by projected graphics, which centered around what can best be described as a keg being repeatedly filled and depleted by metaphorical revenues and expenses. While the graphics will undoubtedly be helpful in keeping the jurors from nodding off, I can only imagine that by the end of the trial, they will only add to the jurors’ desire for a much-needed drink.

The People painted a picture of the defendants as greedy executives who padded their own bank accounts and those of their cronies while average, hard-working New Yorkers were being given pink slips. The opening statement walked jurors through D&L’s entire short existence, from the merger through the untimely demise, stressing how both predecessor firms had survived the Great Depression and World War II, while the merged firm couldn’t even last five years.

By the lunch break, jurors were overloaded with keg imagery showing how the defendants allegedly made countless improper adjustments year after year in order to defraud the outside world into believing that the firm was financially sound. Most jurors seemed surprisingly attentive, and many even took notes. For the most part, the defendants sat impassive, even as damning emails were quoted aloud to the jury.

A highlight of the prosecution’s opening was a rundown of the seven “insiders” who are cooperating and testifying to committing illegal actions at the direction of the defendants in exchange for get-out-of-jail-free cards (or for significantly reduced sentences). Those expected to testify, and what they’re getting in return, are:

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  1. Frank Canellas – Director of Finance: One count of Felony Grand Larceny in the Second Degree; will serve 2-6 years in state prison
  2. Tom Mullikin – Controller: One count of Felony Scheme to Defraud in the First Degree; will serve 5 months in jail
  3. Victoria Harrington – Accounting Manager: One count of Felony Scheme to Defraud in the First Degree; will serve no jail time
  4. Ilya Alter – Director of Budgeting: One count of Misdemeanor Scheme to Defraud; will serve 200 hours of community service and no jail time
  5. Dianne Cascino – Director of Revenue Support: One count of Misdemeanor Falsification of Business Records in the Second Degree; will serve 50 hours of community service and no jail time
  6. Lourdes Rodriguez – Director of Billing: One count of Misdemeanor Scheme to Defraud; will serve no jail time
  7. David Rodriguez – Partner Relations Specialist: One count of Misdemeanor Falsification of Business Records in the Second Degree; will serve 15 hours of community service and no jail time

The defendants’ attorneys, on the other hand, pulled no punches in blaming these seven employees for the firm’s downfall. Davis’s lawyer, Elkin Abramowitz, referred to them as “cheaters” who were blaming their bosses in order to get reduced sentences, and panicking people who concocted relatively small accounting adjustments out of fear of losing their jobs.

Abramowitz was by far the most engaging speaker of the day, and the accounting department was not the only place he laid blame. He repeatedly invoked the partners who left D&L as the firm was going under, calling them disloyal deserters who jumped ship in the firm’s time of need, taking their crucial books of business elsewhere rather than sacrificing to help save the firm. They were also described as a greedy, jealous, and resentful group of people with huge egos who are now doing just fine at their new firms, while the D&L support staff was hung out to dry. The overriding message of Abramowitz’s 45-minute opening was that Davis had no knowledge of any wrongdoing and was being prosecuted for his role as chairman of the firm rather than for anything that he actually did. In his words, the prosecution’s case was simply “nothing more than a misguided and fanciful theory in search of reality.”

DiCarmine’s attorney, Austin Campriello, took a different approach, describing DiCarmine to the jury as a regular, working-class guy who got to live the American dream by getting ahead on good, old-fashioned hard work. He repeatedly mentioned DiCarmine’s plans to leave the firm and study textile design and fashion at Parsons as a sign that he was just a mere employee with no financial motive to bring down the firm. Campriello went so far as to claim that DiCarmine was simply a “victim of an ill-conceived quest to find someone to blame.” He was also quick to point out that being well-compensated isn’t a crime.

Like Abromowitz, Campriello was eager to blame the defecting partners, mentioning corporate partner Alex Dye by name. The blame game didn’t end there, as he went on to state that the District Attorney’s criminal investigation of the firm was truly to blame, as that was what torpedoed a merger that would have saved the firm, spurring on the defections.

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The engaging part of Campriello’s opening statement ended there, and he went on to spend the better part of the next hour getting into accounting specifics and droning on at length about the various loans and agreements the firm entered with banks and insurance companies. By the time he was concluding by quoting the prophet Isaiah and telling the jurors to “question everything,” they were starting to visibly fade and many eyes in the courtroom had glazed over.

Mercifully, the opening statement of Sanders’s attorney was saved for the next day.