Photo

The seven former employees of Dewey & LeBoeuf who pleaded guilty to participating in a scheme to manipulate the law firm’s finances came from much different backgrounds than many of the high-powered lawyers at the once-prominent New York firm.

None of the seven employees, whose guilty pleas were unsealed on Thursday and Friday, was a lawyer. Most either had college degrees in accounting or had taken a few courses in accounting at a New York-area community college.

Just one of the former employees was a certified public accountant.

Cyrus R. Vance Jr., the Manhattan district attorney, is counting on the testimony and cooperation of the seven former back-office employees to support a 106-count indictment filed this month against the law firm’s three top executives, all of whom are lawyers. The seven former employees, four of whom pleaded guilty to misdemeanor charges, provided prosecutors with detailed statements outlining their role in the manipulation scheme to break the law.

The indictment, approved by a New York grand jury, charged Steven H. Davis, Dewey’s former chairman; Stephen DiCarmine, the firm’s onetime executive director, and Joel Sanders, the firm’s former chief financial officer, with orchestrating a four-year scheme to manipulate the firm’s finances in an effort to keep Dewey in business and persuade investors and banks to provide it with badly needed financing.

Also indicted was a fourth man, Zachary Warren, a low-level employee who worked in client relations, who later went on to graduate from Georgetown University School of Law and clerk for a federal judge.

The authorities contend that the scheme, which fell apart when Dewey collapsed in bankruptcy in May 2012, cost investors $150 million to $200 million. The scheme began shortly after the completion of the 2007 merger of Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae, a move that created a firm with more than 1,300 employees but too many high-priced lawyers under contract. Within a year, as the economy started to collapse, the firm was having trouble weathering the sharp decline in revenue.

The unsealed pleas from the former employees reveal that most are prepared to provide testimony directly linking Mr. Sanders to accusations that the firm made improper year-end adjustments to its revenue and expenses and lied about those adjustments to the firm’s auditor, Ernst & Young. Several of the employees said they believed that Mr. Davis and Mr. DiCarmine were aware of the financial manipulation, but some also said they had little direct dealings with the two men.

Only one former employee, Francis Canellas, the firm’s former director of finance, even mentioned Mr. Warren in the statements accompanying the guilty pleas.

In return for the cooperation of the seven former employees, Mr. Vance’s office is prepared to recommend that five of them not be sentenced to any jail time and perform community service instead. In the case of Mr. Canellas, the plea deal says that prosecutors will recommend a sentence of two to six years for a guilty plea to a felony charge of grand larceny. In the seventh case, involving Thomas Mullikin, the firm’s former controller, who pleaded guilty to a felony, prosecutors are recommending up to five months in jail.

Mr. Canellas, whose plea was unsealed on Thursday, offered the most direct evidence against Mr. Davis. In his statement, he said Mr. Davis was nervous before a meeting with the firm’s auditor to review the 2010 financial statements because he thought the firm’s former chairman was worried the inappropriate accounting adjustments would be discovered.

Also pleading guilty to a single felony charge was Jyhjing Harrington, known as Victoria, the firm’s former accounting manager and the lone certified public accountant to plead guilty in the investigation. Both Mr. Mullikin and Ms. Harrington pleaded guilty to a charge of scheme to defraud.

Mr. Canellas and Mr. Mullikin face civil securities fraud charges in a parallel lawsuit filed by the Securities and Exchange Commission, which also names Mr. Davis, Mr. DiCarmine and Mr. Sanders as defendants. The S.E.C. charges that the five men misled investors in a $150 million debt offering in 2010 about the financial well-being of the law firm.

The other former employees who pleaded guilty and cooperated with the investigation — Dianne Cascino, Ilya Alter, David Rodriguez and Lourdes Rodriguez — all pleaded to misdemeanor charges. All of those former employees worked in the firm’s finance division and were responsible for client billing, budgeting or revenue collection.

Mr. Rodriguez, who was responsible for working with the firm’s top lawyers on their compensation, said in his statement that he was directed by Mr. Canellas to make false reclassifications in partner distributions “to make the firm’s net income appear higher than it really was.” He said one of the partner distributions that he was instructed to reclassify was a payment to Mr. Davis.

The statements, taken together, suggest that in building their case, prosecutors are using a typical strategy of getting guilty pleas from lower-level employees as they work their way up the chain of command. Many of the employees who pleaded guilty reported to Mr. Canellas, who, in turn, reported to Mr. Sanders.

Prosecutors also have email evidence to bolster their case. The indictment and the S.E.C. lawsuit cited numerous emails in which Dewey’s top executives were talking openly about things like managing to trick the firm’s “clueless auditor” or getting tired of “cooking the books.”

Mr. Davis, Mr. DiCarmine, Mr. Sanders and Mr. Warren have all pleaded innocent to the charges.