By Brendan Pierson
Feb 26 (Reuters) - A New York state judge on Fridaydismissed grand larceny charges against two former executives ofdefunct U.S. law firm Dewey & LeBoeuf, leaving only threelower-level charges to go to trial this fall.
Acting Supreme Court Justice Robert Stolz said at a hearingthat he did not think any jury could find former Dewey ExecutiveDirector Stephen DiCarmine and former Chief Financial OfficerJoel Sanders guilty of the charges, which carried a maximumsentence of 25 years in prison.
Two remaining charges, scheming to defraud and violating NewYork's securities law, each carry a maximum sentence of fouryears, while the third, for conspiracy, carries a maximumsentence of one year.
Once one of the largest U.S. law firms with 1,400 lawyers,Dewey filed for bankruptcy in 2012.
DiCarmine, Sanders and former Dewey Chairman Steven Daviswere accused of using illegal accounting adjustments to mask thefirm's teetering finances between 2008 and 2012 and convincelenders and investors, including Bank of America Corp and HSBC Holdings PLC, that the law firm was stillhealthy.
That case went to trial last year and ended in a mistrial onOct. 19, with a jury reporting it was deadlocked on most of thecounts after nearly a month of deliberations.
Davis reached a deal in January with prosecutors to avoidbeing retried. Under the deal, Davis is barred from practicinglaw in New York for five years, though he can practice in otherstates or abroad.
Zachary Warren, a former client relations manager at thefirm who also faced criminal charges, reached a deal to avoidtrial earlier this month. Warren, who was never charged withgrand larceny, agreed to do 350 hours of community service butremains free to practice law.
Attorneys for DiCarmine and Sanders said after Friday'shearing that they hoped their clients could also strike deals toavoid retrial.
"The judge has dismissed the heart of the people's case,"said Austin Campriello, who represents DiCarmine. "We hope thatthe prosecution continues to engage in a reconsideration of thecase."
"The number of counts in the case keeps getting fewer, sowe're going in the right direction," said Andrew Frisch, whorepresents Sanders.
A spokeswoman for Manhattan District Attorney Cyrus Vance,whose office is prosecuting the case, declined to comment.
A trial on the remaining charges is set to begin inmid-September.
The case is People v. Davis et al, Manhattan Supreme CourtNo. 773/2014. (Reporting by Brendan Pierson in New York; Editing by AlexiaGaramfalvi and David Gregorio)
HSBC Holdings (HSBA)
