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Tue 11 Mar 2014 11:02 AM

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UAE lawyer arrested in US over fraud

Acting CEO of Ras Al Khaimah Investment and Development Board is accused of defrauding lenders at collapsed firm

UAE lawyer arrested in US over fraud
(Getty Images - Photos for illustrative purpose only)

The acting CEO of Ras Al Khaimah Investment and Development Board has been arrested in the US for his alleged involvement in a spectacular fraud case that saw one of the largest corporate collapses in history.

Steve Davis was chairman of the prestigious Dewey & LeBoueuf law firm during the global financial crisis, when he and two other executives are accused of deliberately falsifying accounts to avoid violating the terms of the firm’s bank loans.

He is facing several serious charges, including grand larceny and fraud worth hundreds of millions of dollars.

The 106-year-old company, which had offices in the UAE, eventually collapsed and filed for bankruptcy in May 2012.

The New York prosecutor has alleged Davis, executive director Stephen DiCarmine and chief financial officer Joel Sanders overstated revenue and hid losses to cover up a cash-flow shortfall that began in 2008, according to US media reports.

Emails showed the firm was $50m short of meeting the requirements of its bank loan and detail the men’s plan to cover-up the losses.

The three executives are charged with crimes including grand larceny, securities fraud, conspiracy, and falsifying business records.

The US Securities and Exchange Commission also has brought a related civil claim against them and two others who had worked in Dewey & LeBoueuf’s finance department.

Criminal charges also have been filed against junior employee Zachary Warren, who was a client manager at the firm.

All of the defendants have reportedly denied the allegations.

In a statement provided to Arabian Business via its New York communications representative, the RAK board said it had hoped Davis’ past had been dealt with when it hired him in 2013.

“Davis was hired to contribute his decades of legal experience to Ras Al Khaimah’s ongoing development,” the statement says.

“He had done work for the Emirate before, and we hoped that he had moved beyond the events of the last several years.

“Mr Davis’s resignation was accepted last week. We wish him well.”

Davis moved from the US to the UAE following Dewey & LeBoueuf’s collapse and had been working as a legal advisor and acting CEO at RAK Investment and Development Board.

Davis returned to the US last week to face the charges.

Another US Expat 5 years ago

So, He is a US Lawyer, based and working in RAK. Not a UAE Lawyer. The Heading is misleading and confusing. How did he get a position such as this with these pending allegations?