Former top executives at defunct law firm Dewey & LeBoeuf, including chairman Steven Davis, conspired to falsify income statements in an attempt to forestall its collapse in 2012, the firm's former finance director testified yesterday, Reuters reported. Francis Canellas, a key prosecutorial witness at the criminal trial of Davis, executive director Stephen DiCarmine and chief financial officer Joel Sanders, said all three were aware of improper accounting tricks intended to fool auditors about Dewey's true financial state. "I participated and directed others to make false accounting entries" from 2008 to 2011, Canellas testified in state court in Manhattan. In March 2014, he pleaded guilty to grand larceny as part of a cooperation agreement with the Manhattan district attorney's office. In 2012, Dewey became the largest law firm in U.S. history to file for bankruptcy due to crushing debt and a stream of partner departures.
