An antitrust lawyer in United States has pled guilty to federal charges that she along with her husband had conspired to use fake vendors to defraud two law firms in New York.
Keila Ravelo, who was a partner at law firm Willkie Farr & Gallagher before her arrest in 2014 pleaded guilty to conspiracy to commit wire fraud and tax evasion, prosecutors said.
The guilty plea was filed in Newark ‘s federal court in New Jersey. Her husband, Melvin Feliz, had pleaded guilty in 2015.
Prosecutors revealed that Ravelo, aged 52, is expected to be sentenced on March 5.
Ravelo “Failed” To Expose Fraud Committed By Husband
According to a statement by Ravelo’s lawyers, she has accepted responsibility for not exposing the fraud that her husband was committing on the law firms and on MasterCard Inc.
They said that she had “wrongfully covered up his fraud” under “intense emotional pressure” to remain silent. By doing so she had allowed the fraud to continue.
The prosecutors alleged that Ravelo and Feliz had created two bogus vendors, and in the period between 2008 and 2014 had billed two law firms where she was a partner – first Hunton & Williams and then Willkie – for legal support services that had never been rendered.
Several of the payments had been authorised by Ravelo herself. The money defrauded was mostly used by both of them for personal luxuries and investments such as $250,000 spent at a jewellery store.
The prosecutors noted that the law firms had paid out a total of $7.8 million under the fraud, with the firms subsequently billing the amount to clients for litigation support services.
Sharing Of Confidential Information “Tainted” Settlement Discussions
According to court papers, Willkie discovered during an internal investigation after Revelo’s arrest that she had been in communication with Gary Friedman, a plaintiffs lawyer, who was working on behalf of retailers in a class action lawsuit against American Express.
These documents revealed that Friedman had provided confidential information related to the American Express case to Ravelo who was at that point in time one of MasterCard’s defence lawyers in a connected lawsuit .
U.S. District Judge Nicholas Garaufis noted in 2015 that Friedman’s actions had “fatally tainted” the settlement process. As a result of this, Garaufis rejected a settlement that would have enabled merchants to levy a surcharge on American Express users and would have resulted in Friedman’s law firm as well two others to receive $75 million as fees .
MasterCard and Visa then negotiated a settlement worth $7.25 billion with retailers who had accused the card companies of not fixing credit and debit card fees correctly. A U.S. appeals court rejected the deal in 2016, and the case remains open currently.