We thought we heard the last from former BDO chairman Denis Field when one "Jayne Field" emailed us demanding we "close the circle here" and report on the fact that Denis' 2011 conviction on conspiracy and tax-evasion charges was overturned in court at the end of 2013.
In the interest of clearning his good name, however, Field is now suing his former firm, alleging they ditched him when he needed them most:
Former BDO Seidman Chairman Denis M. Field has filed an appeal to the New York Superior Court, Appellate Division, to reverse the Supreme Court’s ruling denying his petition to vacate an arbitration decision in favor of BDO Seidman on the grounds that the decision was based on fraud by the firm.
Mr. Field was exonerated after a prolonged legal battle in 2013, and has long alleged that BDO Seidman committed fraud when it failed to disclose to an arbitrator material facts in connection with the firm’s efforts to avoid payment of his legal fees over a period of more than six years.
On October 31, 2013, Mr. Field was acquitted of all criminal charges arising from the tax shelter practices of BDO’s Tax Solutions Group in United States v. Daugerdas. In that case, five former BDO partners pled guilty, and BDO itself acknowledged criminal wrongdoing in a deferred prosecution agreement that required BDO to pay a $50 million fine.
“Though I will never recover the time, effort and economic investment that have been lost due to this case, I am forever grateful that the jury’s verdict confirmed my innocence,” said Mr. Field. “As I work to rebuild my reputation and career, I am left with millions of dollars in legal fees. BDO’s dishonest behavior and abdication of responsibility must not be ignored. BDO abandoned me despite my innocence – it is time for the firm to acknowledge this failure and fulfill its commitment.”
Bad blood? You betcha:
In a shift from its longstanding practice of indemnifying current and former partners, in October 2007 BDO discontinued paying Mr. Field’s legal fees, despite having made payments, consistent with its historical actions in other cases, until that time. As a result, Mr. Field was forced to pay millions of dollars in legal costs out of his own pocket, depleting his assets and leaving him with more than $1 million in outstanding legal fees.
So it makes sense, then, if he's that broke to take on another lawsuit and sue his former firm.
Field believes the firm was shady in its dealings with the arbitrator and threw him under the bus.
BDO succeeded in deceiving the arbitrator in order to obtain a favorable award and avoid its commitment to provide for fees. In light of this evidence, today’s filing seeks to vacate the arbitration award because it was based on BDO’s fraud. The cost of defending an individual in a complex white-collar case is extraordinary. Individuals rely on the promises made by their companies or firms to indemnify them for such legal costs. Reneging on such commitments makes it difficult, if not impossible, for individuals to mount a vigorous defense. Because BDO withdrew its financial support from Mr. Field, he was unable to ensure that his trial counsel was compensated for its efforts. In addition, because Mr. Field won a retrial and had to rely on court-appointed counsel in that retrial, BDO’s actions resulted in the government paying for legal fees that BDO, in the absence of its fraud on the arbitrator, would have been obligated to pay.
Field says he still owes money to his lawyers, and presumably expects the firm to pay those fees. Like they should have all along.
BDO spokesman Jerry Walsh provided us with the following statement: "On three previous occasions, Denis Field has attempted to be reimbursed for legal costs resulting from his promotion of illegal tax shelters. Both the courts and the arbitration system have consistently ruled that BDO met all of its financial obligations to Mr. Field. We are confident this latest appeal will receive a similar response."
This ain't over!