• Former Hunton & Williams and Willkie Farr partner pleaded guilty to wire fraud and tax evasion
• Lawyer helped ex-convict husband form two litigation support companies, directed nearly $8 million in unearned fees to them
Keila Ravelo, a former partner at Hunton & Williams and Willkie Farr & Gallagher, was disbarred in New York for approving payments of nearly $8 million to her ex-convict husband’s companies in exchange for “little or no services.”
Ravelo’s disbarment was retroactive as of her November 2017 guilty plea to federal wire fraud and tax evasion charges. Sentencing is pending in that case.
In its opinion, the Supreme Court of New York, Appellate Division, First Department said a New York statute automatically disbarred Ravelo when she pleaded guilty to the felony of conspiracy to commit federal wire fraud. That offense doesn’t exist under New York state law. But because the elements of the similar New York felony of scheming to defraud were met, the statute applied to disbar Ravelo, the court said.
As reported in a 2015 article in Bloomberg Businessweek, in the 1990s, Ravelo and fellow associate at Sidley Austin, Gary Friedman, represented convicted cocaine dealer Melvin Feliz in a civil suit alleging the DEA beat him up. Ravelo later married Feliz.
Years later, Ravelo defended MasterCard in antitrust litigation regarding the fees it charged merchants. Friedman represented merchants suing MasterCard, as well as those separately suing American Express.
In 2012, two litigation support companies the couple started were identified by the DEA, while looking into the source of funds Feliz’s associate used for an attempted cocaine buy, Bloomberg Businessweek reported.
Just before Christmas in 2014, Ravelo was arrested, the federal court in the AmEx case said. Ravelo and Feliz were accused of conspiring to defraud Hunton, Willkie, and MasterCard by submitting false invoices for several million dollars to two litigation support vendors they controlled, the AmEx court said.
The criminal complaint alleges that Ravelo approved “many, if not all,” payments totaling over $5 million to one of the vendors while she was at Hunton and Willkie, and $750,000 to another vendor. For all payments, the complaint alleges the vendors provided “little or no services.”
The government claimed that the payments made to the vendors either were used directly to pay for the couple’s personal expenses, including $250,000 to a jewelry store, or were transferred to their personal joint account.
After Willkie learned Ravelo was under investigation, she resigned, the AmEx court said. Willkie’s internal investigation uncovered emails between Ravelo and Friedman containing confidential information about the latter’s clients, the AmEx court said.
As a result, the AmEx court rejected the proposed class settlement: “Friedman’s bringing MasterCard’s counsel into the negotiating process created a conflict between class members and Class Counsel, and specifically a risk that Friedman, with Ravelo in his ear, negotiated settlement terms that are worse for class members than the terms he might have negotiated absent that conflict. This risk requires the court to deny approval of the Settlement.” That settlement would have resulted in $75 million in fees to Friedman’s firm and the other plaintiffs’ lawyers.
Ravelo’s sentencing is scheduled for September 2018. In her plea agreement, which the court isn’t bound to adopt, she agreed to serve between 48 and 72 months in jail, with three years of supervised release. In a consent judgment Ravelo agreed to forfeit the proceeds of the sale of properties in New Jersey, New York, and Miami, as well as her 2009 Bentley Continental Flying Spur Sedan, to satisfy the roughly $8 million traced to the fraud.
The case is Matter of Ravelo, 2018 BL 230648, N.Y. App. Div., No. M-1366, 6/28/18.