By DANIEL CASSADY & ULRIK NARCISSE
Jurors requested the dictionary definition of the word “false” from the judge on Thursday, as jury deliberations for former global law firm Dewey & LeBoeuf’s fraud case continued into the second week, reflecting the panel’s continued confusion about the charges and requests for clarification of legal jargon.
Charged in March of 2014, the defendants, Former Chief Financial Officer Joel Sanders, Chairman Steven Davis, and Executive Director Stephen DiCarmine were all members of the now defunct law firm dissolved in 2012, and stand charged in Manhattan Supreme Court with intentionally misstating revenue and profitability records in order to defraud and thereby retain support from four bank creditors at the end of 2008.
Jurors in the long grueling trial previously raised concerns regarding the definition and interchangeability of words used by the prosecution and witnesses, particularly on whether words like false or wrong could be classified as illegal from an accounting standpoint.
Acting Supreme Court Justice Robert Stolz last week clarified the definition of the words to jurors, saying that the words like “false” or “inappropriate” do not imply that the acts were in fact illegal, and that the jurors would have to prove that the firm’s members did in fact falsify the financial records with the intent to defraud their creditors.
Some jurors still sought the same clarifications on Thursday.
Lengthy prosecutor court documents attempt to reveal the substantial lengths firm employees went through to cover the firm’s financial shortfalls from creditors. Within the last month of 2008, email correspondence at the firm showed the awareness of risks by their creditors due to their inability to meet net profit and revenue margins. On December 30, 2008, Sanders emailed DiCarmine and Davis to inform them that the firm needed $50 million in collections the next day in order to meet their covenant with the banks.
Rather than risking losing their lines of bank credit due to the firm’s lack of cash flow, firm members are accused by prosecutors of embarking on a plan at the end of 2008 to figure out how to bury their financial results from creditors. According to plaintiff documents, firm finance director Frank Canellas partnered with Sanders and a collections manager to falsify records in Dewey & Lebouef’s books and make adjustments that would boost the overall net profit of the firm.
Courtroom observers predicted that it could take jurors a still longer time to reach a verdict, due to the complexity of the charges.
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