Florida

Drunk Blogging, Financial Fraud, and Mayer Brown

You have to think that once SFL takes a break from various important legal stuff and checks his blog on the blackberry, the title to this post will cause him to pucker. That's pretty funny, and I'll drink to me, since I'm the only one to date who gets to give The Big Man grief, posting on his blog.

Anyhoo, we here at South Florida Lawyers prefer to leave analysis of criminal law issues to that stud across town , but this case caught our eye for a couple reasons. First, Mayer Brown is a fairly fancy Big Law firm, and the Refco Scandal has dinged the firm pretty darn good. Second, its never pretty when lawyers and clients start airing their dirty laundry in public. In Federal District Court. Before an impartial jury of 12 men and women. When rival Big Law firm partners join in the fray like its a bench clearing brawl, however, someone is going to lose an eye.

For those of you not in the know, Mayer Brown partner Joseph Collins, 59, is charged with conspiracy, multiple fraud counts and making a false Securities and Exchange Commission filing. Prosecutors have claimed that Collins helped orchestrate hundreds of millions of dollars in sham loans that eventually bankrupted Refco and forced the company to liquidate.

They tell me that in criminal cases, a good prosecutor proves a motive. They tell me that in federal white collar financial fraud cases, the motive is money. Collins allegedly was motivated to maintain the deception because Refco was his largest client, bringing Mayer Brown more than $40m in fees between 1997 and 2005.

$40 million. In eight years. From one client.

So you gotta think, the dude probably hired a smart lawyer, right? Someone who understands that on these facts, with the staggering amounts of money and sophisticated players involved, a credible defense is essential to winning an acquittal. The last thing you want to pull is the "Don't ask me, I just work here" defense. Right?

Goes to show you what I know.

The New York Law Journal reports that "Speaking forcefully and looking jury members straight in the eyes as he testified yesterday in federal court in Manhattan about his own role in a $2.4 billion corporate fraud case, Collins said executives of Refco Inc. lied to him about financial issues underlying the loan transactions on which he worked."

I, for one, always think its better to look people straight in the eye, as opposed to looking at them askance, eyes darting nervously around the room.

Collins said he worked with the numbers his client gave him and never knew Refco was, for example, concealing debt as he assigned an associate to draft documents needed to apply for a revolving line of bank credit, reports the New York Law Journal.

"I didn't personally spend a lot of time. I delegated them," Collins said of the loan matters on which he worked for Refco. "I didn't structure them. I didn't negotiate them. I didn't talk to customers about them. They just didn't require much of my time."

I bet his billing records will forcefully demonstrate otherwise.

NB: I feel like a kid who turned 16 and just got his driver's license and has the keys to his parents blog, er, car.

Full post as published by South Florida Lawyers on June 20, 2009 (boomark / email).