Harvey Newkirk, formerly counsel at Bryan Cave LLC, the New York law firm, was found guilty today of wire fraud in connection with his participation in a scheme to fraudulently induce lenders to provide tens of millions of dollars toward the purchase of Maxim Magazine and related assets (“Maxim”).
Manhattan U.S. Attorney Preet Bharara said: “As a unanimous jury found, Harvey Newkirk, a lawyer and officer of the court, defrauded lenders out of millions of dollars by lying as part of a scheme to acquire Maxim Magazine. Sworn to practice law ethically, Newkirk instead practiced deceit and dishonesty. For that, the jury has convicted him of a serious federal crime.”
As established by the evidence at trial: In connection with the potential purchase of Maxim by a company (the “Company”) controlled by Calvin Ramarro Darden (“Darden Junior”), from in or about August 2013 to on or about February 11, 2014, NEWKIRK told a series of lies to lenders to induce the lenders to provide tens of millions of dollars in capital toward the purchase of Maxim. In order to mislead the lenders into believing that they would receive sufficient collateral for their loans, NEWKIRK falsely promised them that Calvin Darden (“Darden Senior”), the former Senior Vice President of U.S. Operations of UPS, and a member of the Board of Directors of Coca-Cola Enterprises, Target Corporation, and Cardinal Health, Inc., would pledge his personal stock holdings in the latter three companies as collateral for the loans.
In addition to knowingly making this false promise, NEWKIRK concealed from lenders that, as NEWKIRK knew, the stock owned by Darden Senior was subject to restrictions, and could not be pledged as collateral for any loans. NEWKIRK further falsely promised at least six lenders that each would have a first and sole priority interest in the purported collateral when, as NEWKIRK well knew, only one lender could have any such interest.
NEWKIRK, who represented the Company in the attempted Maxim acquisition in his capacity as an attorney at Bryan Cave, engaged in the fraud in part because NEWKIRK secretly owned part of the Company’s parent company (the “Parent Company”), and would share in any of the Parent Company’s profits resulting from the acquisition. NEWKIRK hid his partial ownership of the Parent Company from Bryan Cave and others. NEWKIRK further lied to Bryan Cave about his relationship with Darden Senior, falsely claiming that Darden Senior had been NEWKIRK’s client for many years when, in truth and in fact, and as NEWKIRK well knew, NEWKIRK had never represented Darden Senior.
More info here.