The defunct legal powerhouse Dewey & LeBoeuf was a Ponzi scheme, according to a former senior partner of that law firm. Henry Bunsow, Dewey’s former IP partner, filed a lawsuit against the firm, accusing it of fraud. The lawsuit casts a light upon the notoriously secretive world of elite global law firms and their compensation practices.
Bunsow claims that Dewey’s former managing partner, Steve Davis, and over 200 former partners of the firm, engaged in fraudulent acts and committed “grand theft, grand larceny, false pretences, and embezzlement.”
The accusations spell new trouble for what remains of Dewey, as well as for the fallen giant law firm’s former leadership. Deway’s stunning, and sudden, collapse from the top of the global legal industry is the largest law firm bankruptcy ever. It sudden collapse was only matched by the speed with which its former partners left “the sinking ship.”
Allegations of impropriety started to surface shortly after the firm’s troubles began.
In his “Ponzi scheme” lawsuit, Bunsow also named as defendants Dewey’s former litigation head, Jeffrey Kessler, its chief financial officer, Joel Sanders, its executive director, Stephen DiCarmine, and partner James Woods.
Bunsow, claims the firm misled him as to its financial situation when it persuaded him to jump ship from its former law firm and promised him a $5 million in guaranteed annual profits.
The former leadership of Dewey conspired to devise a Ponzi scheme “in order to enrich themselves and select partners of the firm,” claims Bunsow. They did that by requiring partners to deposit 36% of their estimated annual take into the firm’s account, when they had no intention to return such money back to the partners, argued Bunsow. Essentially, the Dewey defendants planned to distribute those deposits “to themselves and others” to the detriment of other partners, argued Bunsow.
Dewey’s chief, Davis, took out his own money from the firm when he was terminated, claims Bunsow.
Davis, in turn, claims Bunsow has nothing to complain about, since Bunsow took out more money than Davis in 2011.
The only people to profit from the Dewey law firm debacle are likely to be the lawyers. The question is, which lawyers?
Bunsow’s lawsuit was posted on the American Bar Association Journal’s website and can be accessed here: Dewey Ponzi Scheme Lawsuit