A Guilty/Not-Guilty Peculiarity: The Split Verdict in the Second Dewey LeBoeuf Trial

By: Mike Garrigan*| Guest Writer

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When Dewey & LeBoeuf declared bankruptcy in 2012, it was the largest “big law” failure in U.S. history. On paper, Dewey & LeBoeuf portrayed itself as a booming, large-scale law firm. In reality, the firm was collapsing under the weight of immense debt and false promises.

Dewey & LeBoeuf formed out of a 2007 merger between Dewey Ballantine and LeBoeuf, Lamb, Green & MacRae, both prestigious firms formed in the early 20th century. Up until its demise, Dewey & LeBoeuf employed 1,400 lawyers in over 20 offices around the world. Upon filing for Chapter 11 in Manhattan bankruptcy court, Dewey & Leboeuf reported $245 million in debt and $193 million in assets.

Chairperson Steven Davis, executive directive Stephen DiCarmine, chief financial officer Joel Sanders, and client relations manager Zachary Warren faced charges of grand larceny, securities fraud conspiracy, and falsifying business records. Warren, a 22-year-old attorney at the time of the alleged malfeasance, convinced the prosecution to sever his case from the other three because he was involved to a lesser extent. The Manhattan district attorney, Cyrus R. Vance, agreed to drop Warren’s charges as a part of a deferred prosecution arrangement.

In 2016, Davis, DiCarmine, and Sanders underwent a four-month trial and one-month of jury deliberations. After the jury deadlocked and Judge Stolz declared a mistrial, Davis agreed to a five-year ban on practicing law in New York in exchange for having his charges dropped.

In 2017, DiCarmine and Sanders endured a second trial, but faced fewer charges. Manhattan district attorney Vance decided to narrow the prosecution’s case. It worked—sort of. The jury delivered a split verdict, finding Sanders guilty of securities fraud, scheme to defraud, and conspiracy. But, the jury acquitted DiCarmine of the same charges.

Why the jury delivered a split verdict is likely a question of evidence. One juror commented that the prosecution “did a much better job with Sanders.” Another juror observed that DiCarmine’s name did not appear on any implicating emails. Also, jurors in the first trial struggled more with evidence against Sanders.

When asked about the split verdict, DiCarmine’s defense attorney, Rita Glavin, observed “undeniable facts that showed he was not involved in the accounting transactions at issue or would have had reason to think they was anything improper about the accounting.” Glavin followed by stating, “[n]evertheless, a split verdict is unusual for large-scale white-collar criminal cases. It’s not something you see a lot.”

Andrew Frisch, attorney for Joel Sanders, intends to appeal. In a written statement, Frisch observed that, in the first trial, the jury had acquitted Sanders of some of the charges and “no New York appellate court has ever sanctioned the rebranding of acquitted conduct as a conspiracy or a scheme.” Thomas Curran, a former Manhattan prosecutor, is cautiously optimistic of Frisch’s argument, noting its merit while expressing some uncertainty of its success on appeal.

Mike Garrigan is a second year law student at Wake Forest University. He received a Bachelor of Arts in History and Political Science from the University of North Carolina at Chapel Hill. Upon graduation, he plans to practice entertainment law.