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HomelawA Mystery: Who Are the Dewey Secret Seven?

A Mystery: Who Are the Dewey Secret Seven?

They are the mysterious seven: former employees of Dewey & LeBoeuf who pleaded guilty to taking part in a four-year plan to manipulate the financial statements of the once prominent law firm, but whose identities and plea agreements are being kept under wraps by New York prosecutors.

When Manhattan District Attorney Cyrus R. Vance Jr. announced this month the filing of a 106-count indictment against three former top executives at the law firm and a low-level employee, the disclosure that he had also secured pleas and potential cooperation from seven people in the nearly two-year investigation was a surprise.

But the decision to keep their names secret even after the four accused — Steven Davis, Dewey's former chairman; Stephen DiCarmine, its former executive director; Joel Sanders, the former chief financial officer; and Zachary Warren, a former client relations manager — had been arrested and charged is striking some in the legal world as even more surprising. Defense lawyers say the continued sealing of those cases is akin to the way prosecutors often handle organized crime cases or an undercover investigation.

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"It's not the typical process," said Alafair S. Burke, a criminal law professor at the Hofstra University School of Law and a writer of crime novels. Ms. Burke said she could understand the prosecutors wanting to keeping secret the names of people who had pleaded guilty if there was a fear of witness-tampering or witness intimidation. But that seems unlikely in what is essentially a white-collar accounting fraud case, she said.

The Dewey & LeBoeuf LLP logo is displayed in front of the company's offices in New York, May 3, 2012.Scott Eells | Bloomberg | Getty Images

"It is unusual to have the pleas sealed at this juncture and in the context of this case," said Christopher E. Chang, a defense lawyer and a former Manhattan assistant prosecutor.

Defense lawyers said Mr. Vance's approach to unsealing guilty pleas was markedly different from the one employed by Preet Bharara, the United States attorney for Manhattan, in the government's insider trading investigation. These lawyers said that federal prosecutors would move swiftly to unseal cooperation agreements once the target of an insider trading investigation had been arrested and charged.

The New York Times has filed motions in New York State Supreme Court to unseal the criminal cases of four "John Does" and two "Jane Does," who are believed to be six of the seven former employees to have pleaded guilty in the case. The case for the seventh person could not be identified from the state court's online docketing service.

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In court papers, The Times said news organizations and the public have a right of access to criminal proceedings that "can be abridged only in carefully defined circumstances."

Erin Duggan Kramer, a spokeswoman for Mr. Vance, declined to comment, noting that the state prosecutors would explain their reasons for keeping the matters sealed in their reply to the unsealing motion.

The number of pleas secured by Mr. Vance from people who waived the right to a trial is striking for a financial crimes case. In the nearly 10-year insider trading investigation of SAC Capital Advisors, for instance, federal prosecutors secured guilty pleas from six traders and analysts who once worked for Steven A. Cohen's hedge fund.

The seven pleas from former Dewey employees would suggest that the accusations of financial manipulation at the law firm, which at its peak employed more than 1,300 lawyers before collapsing in bankruptcy in May 2012, were not isolated incidents. The pleas also indicate that authorities have put together a case that will not rest solely on emails, in which some of the defendants openly talked about "cooking the books" at the law firm.

It is expected that some of the seven people who have pleaded will testify against the defendants at trial, said people briefed on the matter who spoke anonymously because they were not authorized to discuss the case publicly. These people said the identities of any cooperating witness and any plea deals they had reached with prosecutors would eventually need to be turned over to lawyers for the defendants.

(Read more: Should insider trading really be considered a crime?)

But some lawyers have suggested Mr. Vance may be trying to keep the pleas under wraps as long as possible to avoid having to reveal whether his office agreed to any sweetheart deals with cooperators who might have avoided prison time, or allowed them to plead to a misdemeanor as opposed to a felony.

Three of the seven people whom Mr. Vance's office has taken pleas from are Francis Canellas, the firm's former finance director; Thomas Mullikin, the firm's former controller; and Ilya Alter, who was the firm's director of budgeting and planning, said the people briefed on the matter.

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