Defense Lawyer Seeks to Distance Dewey Ex-Chairman from Accusations

A key prosecution witness in the Dewey & LeBoeuf LLP trial said Monday that he never discussed improper accounting practices with Dewey’s former chairman, Steven Davis, one of three defendants accused by the Manhattan district attorney’s office of orchestrating a financial fraud at the now-defunct law firm.

The statements came during cross-examination of Dewey’s former finance director, Francis Canellas, who is on the stand as one of the government’s star witnesses.

On cross-examination Monday, an attorney for Mr. Davis solicited a series of answers aimed at distancing his client from the allegations. Upon questioning, Mr. Canellas told jurors that Mr. Davis had not instructed him to to make an improper accounting adjustment and that he had never told the chairman such adjustments were being made.

Mr. Davis’s lawyer, Elkan Abramowitz, also dismissed the importance of a meeting held in Mr. Davis’s office in December 2011 that jurors heard about last week. Prosecutors showed jurors an email from Dewey’s then-chief financial officer, Joel Sanders, copied to Mr. Davis, asking Mr. Canellas to bring “the list of the ‘accounting adjustments’ you’ve come up with so far,” to the meeting.

Based on Mr. Canellas’s accounting knowledge, Mr. Abramowitz asked, there’s “nothing per se inappropriate about the term ‘accounting adjustments?’”

“No sir,” Mr. Canellas replied. And the term, Mr. Abramowitz asked, “is not a red flag for anything improper?” Again, Mr. Canellas answered, “No sir.”

Last week, Mr. Canellas testified that some of the adjustments on the list brought to the meeting were improper. Mr. Abramowitz countered Monday that Mr. Canellas didn’t even remember the meeting until shown an email about it from prosecutors, and that there’s no record of the list of adjustments he allegedly showed to Mr. Davis.

“You do not have any list to show this jury what was shown to Mr. Davis in December 2011?” Mr. Abramowitz asked. “Correct,” replied Mr. Canellas, who has pleaded guilty to second-degree grand larceny and is cooperating with prosecutors.

Mr. Davis is accused, along with Mr. Sanders and Dewey’s former executive director, Stephen DiCarmine, of hiding the true nature of Dewey’s finances from its banks, auditors and creditors. The three deny wrongdoing.

Referring to Messrs. Davis and DiCarmine, Mr. Abramowitz asked whether it was true that when Mr. Canellas met with prosecutors earlier in the investigation, he could “not pinpoint a moment or meeting where you knew Steve and Steve knew about the false adjustments?”

“Yes sir,” Mr. Canellas answered.

Asked whether a certain accounting action that Dewey made was one where disagreement was possible, Mr. Canellas replied that people’s opinions could differ on, “almost any accounting issue.”