New York lawyer jailed for fraud

by |
(Bloomberg) -- A former lawyer at Bryan Cave LLP was sentenced to six months in prison for lying to lenders as part of a failed scheme to buy Maxim Magazine through impersonation, a false e-mail and stolen money.

Prosecutors in New York said Harvey Newkirk, 39, deserved a “significant term of imprisonment,” describing him as “a facile liar lacking shame, remorse or sympathy for his many victims.” Defense lawyers sought probation, saying he was a “precocious only child born into a family of God” who lost his job and suffered from the shame of a criminal conviction.

Newkirk, while not part of the most “despicable aspects” of the scheme, “was a knowing and willful perpetrator of fraud in his own part,” U.S. District Judge Jed Rakoff in Manhattan said Thursday at his sentencing. “The jury’s verdict was amply deserved.”

Under federal sentencing guidelines, Newkirk faced a prison term of as much as 17 1/2 years behind bars. Prosecutors called that overly punitive while calling for a stiff sentence. Rakoff, a critic of the guidelines, said they were irrelevant to his decision. He said he considered Newkirk’s “many admirable qualities” and the low likelihood that he will commit future frauds as well as the nature of the crime.

Fake Documents

At his trial, prosecutors said Newkirk plotted with his client, Calvin Darden Jr., to buy the men’s magazine for $31 million in 2013 by lying to investors. The pair faked documents and told lenders that Darden’s father, who was on the boards of Coca-Cola Enterprises Inc. and Target Corp., would pledge collateral for the loans.

After one lender discovered the collateral was fake, he asked for his money back from the escrow account at Newkirk’s law firm where it was being held, prosecutors said. The younger Darden then sent Newkirk an e-mail in which he pretended to be the investor, asking the lawyer to transfer the $4.9 million to the owners of Maxim instead. Newkirk transferred the money to Maxim despite knowing the e-mail was fake and pretended to discover the fraud only after the magazine’s owners had received the investor’s money.

“I should not have been so trusting of Calvin Darden Jr.,” Newkirk said at the hearing. He held back tears as he spoke about his family. “I’m sorry for the impact of my actions on my wife and children.”

The judge also sentenced Newkirk to three years of supervised release after his prison term and ordered him to pay $3.1 million in restitution.

Guilty Plea

Lenders lost $8 million in connection with the scheme, prosecutors said. Darden pleaded guilty. His father wasn’t accused of wrongdoing.

Lawyers for Newkirk, who earned degrees from two Ivy League universities and memberships in elite institutions, told Rakoff their client is disgraced and struggling financially.

He and his wife were once members of the Abyssinian Baptist Church in Harlem, whose members are ‘a historical who’s who of the elite black community,” a supporter wrote to the judge on Newkirk’s behalf. “The community is small, so people gossip, speculate and shun.”

Newkirk’s lawyers wrote that he “feels deeply that this conviction shames not only his family, but the African American community at large.”

“This shame eats away at Harvey Newkirk,” they said in court papers.

At the time of his arrest, Newkirk was described on his LinkedIn page as a graduate of Columbia Law School and Cornell University who worked at Bryan Cave from June 2013 to February 2014.

The case is U.S. v. Newkirk, 14-cr-00534, U.S. District Court, Southern District of New York (Manhattan).

Australasian Lawyer forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions