Former Dewey executives 'lied, schemed and defrauded,' jury told

By Brendan Pierson (Reuters) - A Manhattan prosecutor on Thursday urged a jury to convict three former executives of Dewey & LeBoeuf for allegedly cooking their law firm's books to defraud lenders and investors, arguing they ordered the fraud even if they did not personally carry it out. "They were all intentionally aiding the criminal conduct in this case," Assistant District Attorney Peirce Moser said of former Dewey chairman Stephen Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders. The three men are accused of manipulating the firm's accounts in a failed attempt to avoid its 2012 bankruptcy, which was the largest ever for a U.S. law firm. They each face dozens of counts including grand larceny, conspiracy and falsifying records. The most serious counts, for grand larceny, carry up to 25 years in prison. Throughout nearly four months of trial, defense attorneys have tried to show that the three executives did not know about any accounting fraud. Moser told the jury Thursday that they could not escape criminal liability "just because they had others do their dirty work." Even though they may not have known all the details of the fraud, he said, they were the ones who ordered it. He pointed to email exchanges in late 2008 in which they, former finance director Frank Canellas and others at the firm discussed the urgency of meeting cashflow covenants with their lenders to avoid bankruptcy. In that context, Moser said, "'We have to meet the covenants' is a command to commit fraud." Moser also responded to arguments made by Sanders' attorney, Andrew Frisch, in his summation Thursday morning attacking the credibility of the former Dewey employees who testified for the government under cooperation agreements, especially Canellas, the government's key witness. Frisch said those witnesses lost credibility because they all initially told prosecutors that they had done nothing wrong. But Moser said it was only natural for people to deny wrongdoing initially and confess when faced with the evidence against them. "If you believe these cooperators, then these defendants are guilty," Moser said. "It is that simple." Moser's summation will continue Friday morning. Lawyers representing the former Dewey & LeBoeuf executives were not immediately available for comment. The case is People v. Davis et al, Manhattan Supreme Court No. 773/2014. (Reporting by Brendan Pierson in New York; editing by Alexia Garamfalvi and Andrew Hay)