It is the kind of rogue language that one might expect to find in emails unearthed during a corporate fraud case from the Enron era, but not at a law firm that carried the name of Thomas Dewey, the former governor of New York, who began his legal career by prosecuting organized crime. The indictment is an unusual coda to the collapse of a firm that was created by the 2007 merger of Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae, and that filed for bankruptcy in May 2012.
"Those at the top of the firm directed employees to hide the firm's true financial condition from creditors, investors, auditors and even partners of the firm," the Manhattan district attorney, Cyrus R. Vance Jr., said at a news conference announcing the indictment.
The case is also surprising in that it stems partly from a revolt within the firm itself. Lawyers at Dewey ousted Mr. Davis, an architect of the merger, as chairman just as the firm was preparing to file for bankruptcy. Soon afterward, several of them went to Mr. Vance, urging him to investigate Mr. Davis and his administrative team.
Through their lawyers, all of the men denied the charges.
The indictment paints a portrait of a law firm being run like a criminal enterprise. Mr. Vance said his office had already secured guilty pleas from seven other people who once worked for Dewey. A person briefed on the investigation said several were cooperating with the two-year-old investigation.
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"I can't say whether this is the Enron" of the legal world, Mr. Vance said. "Clearly this is the largest law firm bankruptcy that we know of in history."
At its peak, the combined firm had 26 offices around the globe and employed more than 1,300 people. The $550 million in claims against the firm's estate made it the largest bankruptcy filing by a law firm on record.
The bankruptcy revealed that while Dewey was a brand-name operation, it failed to generate sufficient revenue to pay the big contracts of its star lawyers and meet its expensive overhead. The firm struggled to keep up with loan payments during the worst of the financial crisis.
But the indictment and a parallel civil complaint filed by the Securities and Exchange Commission surprised even some who had worked at Dewey.
"If the allegations are true, then once again we see a cover-up giving rise to a crime, when the same people had the option of speaking up and being heroes for helping to solve a sympathetic debt problem at the height of the Great Recession," said Martin Bienenstock, a former Dewey lawyer and now chairman of the bankruptcy and restructuring practice at Proskauer Rose.
Roy D. Simon, a professor at the Hofstra University School of Law, who specializes in legal ethics, said it was ironic that far too many lawyers at Dewey were "uncurious about the management of their firm," until it was too late.
Prosecutors contend that the accounting games at Dewey began in November 2008, not long after the merger was completed, and continued until March 7, 2012, a little before Dewey filed for bankruptcy two months later. The firm found it could not meet provisions in bank loans that required it to meet certain cash-flow projections. To make it appear as though Dewey was meeting those conditions, the top executives schemed to make a series of fraudulent accounting entries that either increased revenue, decreased expenses or appeared to rein in distribution payments to partners, prosecutors said.
The authorities said the accounting scheme was laid out in a document called the "Master Plan."
Mr. Davis and his team had hoped that the firm's revenue would eventually increase as the economy recovered. But by the end of 2009, Dewey owed its bank lenders about $206 million, needed to make payments totaling $240 million to its partners, yet had just $119 million in cash.
The S.E.C. case centers on a 2010 private debt offering in which Dewey raised $150 million from 13 insurers and an additional $100 million from a line of credit placed with several large banks. The firm used the offering to refinance its existing credit lines and buy itself more time.
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But the S.E.C. and prosecutors contend the offering document for the debt deal misrepresented the firm's financial situation.