Dewey Defense: 15 Reasons to Doubt the Prosecution’s Case

As the Dewey & LeBoeuf trial winds down, lawyers for the defunct law firm’s onetime leaders are giving their final pitches to jurors in a bid to keep their clients out of prison.

Elkan Abramowitz, the attorney for Dewey’s former chairman, Steven Davis, took the listicle approach to closing arguments this week. Over the course of several hours, he walked jurors through his 15 reasons to doubt the Manhattan district attorney’s office’s case. Here are a selection of those on the list:

Steven Davis, the ex-chairman, had no reason to be nervous or sarcastic when meeting with the firm’s auditors.
One of the prosecution’s key witnesses, former Dewey finance director Frank Canellas, testified that at a meeting with Dewey’s Ernst & Young auditors, Mr. Davis appeared nervous beforehand and made a sarcastic remark afterwards about how well the finance department was doing. His defense lawyer says E&Y had already issued a clean audit opinion to the firm at that point, making this supposed memory a non-issue.

Ex-finance director Frank Canellas, a key government witness, retreated from his testimony about a meeting with Mr. Davis.
While on the stand, Mr. Canellas told jurors he had a meeting with Mr. Davis on Dec. 22, 2011, and brought a list of both false and appropriate accounting adjustments with him. “This supposed list has not been produced or shown to you,” Mr. Abramowitz said, because, “there is no list.”

Accounting adjustments are not red flags.
Even if Mr. Davis saw emails that included the term “accounting adjustments,” his lawyer argued, that doesn’t mean anything nefarious was going on. Accountants typically adjust the books at year-end, he said, and he said jurors haven’t been told by an expert why the adjustments at issue in the trial are patently improper.

Mr. Canellas was in charge and he and others hid their activities from Mr. Davis. 
One defense theory is that even if some of the adjustments made to the books were improper, the defendants didn’t know about it. To bolster that point, an email sent by Mr. Canellas was shown in court this week that said, “Sometime the hardest thing about being in charge is knowing what’s at stake and having to figure out a solution without telling anyone else what’s really at stake.”

Cooperating witnesses for the government disagreed over whether accounting entries were false or legitimate.
Mr. Abramowitz says the seven cooperating witnesses who form the crux of the prosecution’s case sometimes differed in their opinion of the legitimacy of certain accounting adjustments.

The cooperators believed they were doing nothing wrong at the time.
Many of the cooperating witnesses said they didn’t think anything they did in Dewey’s accounting department was wrong until after they met with prosecutors. “How could they have conspired with Mr. Davis or anybody else to do something wrong when they didn’t know they were doing anything wrong?” Mr. Abramowitz asked.

Backdating checks is perfectly legal under appropriate circumstances.
Even if Mr. Davis asked partners in January to request December-dated checks from clients to pay bills from the previous year, his lawyer said, “in and of itself, the backdating of a check is not a crime.”

Mr. Davis did not fear breaching a bank covenant.
Prosecutors say many of the allegedly improper accounting adjustments were done to help the firm meet crucial covenants on its bank debts. Mr. Davis’s lawyer said the banks wouldn’t have pulled the loans if these covenants were breached and that because of that, firm leaders didn’t live in fear of a breach.

Partner defections, not accounting adjustments, led to the firm’s demise.
“Until the firm went into bankruptcy in 2012, every nickel that was owed to the banks was paid when due,” Mr. Abramowitz said. What really killed the firm, he said, was the departure of “selfish” partners who “sought greener pastures at other firms.”