Prosecutors offered a choice to two former Dewey & LeBoeuf LLP executives charged with lying to the law firm’s investors: Take a plea deal or face a jury for the second time.

The prosecutors told the New York Supreme Court Dec. 7 that they intend to retry the pair for actions they took before the biggest law-firm bankruptcy in history (People v. Davis, N.Y. Sup.Ct., 773-2014, 12/4/15). A four-month trial of three former executives of the defunct firm ended in mistrial in October after jurors deadlocked on charges of fraud, grand larceny and conspiracy See previous story, 10/20/15, 202 SLD, 10/20/15, 47 SRLR 2044, 10/26/15, 10 WCR 859, 10/30/15, 50 CARE 50, 10/20/15.

A second trial of two of the three—the firm’s former executive director, Stephen DiCarmine, and chief financial officer, Joel Sanders—would probably be shorter and involve only the most serious counts, prosecutors said. They moved to dismiss all charges that the men falsified business records.

Assistant District Attorney Peirce Moser told Justice Robert Stolz that prosecutors are seeking to resolve their case against Dewey’s former chairman, Steven Davis, the third defendant in the original trial.

Elkan Abramowitz, an attorney for Davis, said he is in talks to end the case under a deferred-prosecution agreement that would carry no plea or admission of guilt but would clear his client on the condition that he not commit any crime within a certain period.

‘Never’ Indict.

Davis is relieved that prosecutors are considering such an agreement, Abramowitz said. “He never have should have been indicted in the first place,” the lawyer said.

Moser also said prosecutors are offering to let DiCarmine, Sanders and a fourth defendant being tried separately, Zachary Warren, plead guilty to various counts of scheming to defraud. DiCarmine and Warren were both offered community service, while Sanders would have to accept one to three years in prison 46 SRLR 2227, 11/17/14, 10 APPR 1068, 11/21/14, 217 Securities Law Daily, 11/10/14, 12 CARE 1492, 11/14/14, 217 DER EE-19, 11/10/14.

“The offers presented to the four defendants at this stage are fair and appropriate,” Joan Vollero, a spokeswoman for Manhattan District Attorney Cyrus Vance Jr., said in a statement. “The dismissal of some of the less serious charges in the indictments is an effort to streamline the cases, based, in part, on valuable feedback from jurors in the first trial. If the matters are not resolved, we look forward to trying the cases.”

Defense Objection.

Attorneys for DiCarmine and Sanders objected to a retrial and asked to have the whole case thrown out.

Austin Campriello, an attorney for DiCarmine, and Andrew Frisch, an attorney for Sanders, said that Dec. 7 was the first time they had heard of the plea offers. Paul Shechtman, a lawyer for Warren, said his client wouldn’t accept the offer. Frisch said Sanders was unlikely to consider it.

Vance has decided to take another run at two of three defendants following the mistrial that was declared when jurors couldn’t agree on the most serious charges after weeks of deliberation during which they weighed the testimony of more than 40 witnesses.

The mistrial highlighted the challenges prosecutors face in trying to hold individuals responsible for corporate crime, even with the help of cooperating witnesses. It was also the third setback for Vance’s office in a significant business-crime case this year.

2012 Bankruptcy.

Dewey & LeBoeuf, the product of a 2007 merger, was ranked 28th in gross revenue among large law firms by American Lawyer magazine in 2012 before work slowed and the firm filed for bankruptcy.

Prosecutors argued that Davis, DiCarmine and Sanders manipulated financial statements for four years to hide increasing debt and decreasing revenue. They claimed executives used a “grab bag” of accounting tricks to make it seem as if the firm had survived the financial crisis, including mischaracterizing payments to lawyers, double-booking income and encouraging clients to backdate checks.

Warren, a former client-relations manager at the firm, has pleaded not guilty to charges that he helped plan false accounting entries and cover them up. His trial could begin as soon as March. Attorneys for the three executives are scheduled to return to court in January.

Vance’s probe was aided by seven former Dewey employees, including the finance director, who cooperated and pleaded guilty.

The defense presented no witnesses, using cross-examination to try to show that their clients didn’t know about the fraud or that the accounting was more complicated than alleged.

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