Former Law Firm Partner and her Husband Charged with Defrauding Two Law Firms and the Firms' Client of $5 Million
NEWARK, N.J. - A former partner of a prominent New York law firm and her husband were arrested by federal law enforcement officers this morning for allegedly engaging in a conspiracy to obtain millions of dollars through fraudulent activity, U.S. Attorney Paul Fishman announced.
Agents of IRS-Criminal Investigation and the Drug Enforcement Administration, arrested Keila Ravelo, 49, and Melvin Feliz, 50, of Englewood Cliffs, New Jersey, this morning on a complaint charging them with conspiracy to commit wire fraud. They are scheduled to make their initial appearance this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the complaint:
An investigation conducted jointly by the IRS and DEA revealed that from 2008 through July 2014, Ravelo and Feliz used two companies (Vendor 1 and Vendor 2) to fraudulently obtain money from two New York law firms (Law Firm 1 and Law Firm 2) where Ravelo previously worked. Ravelo worked as a partner at Law Firm 1 from at least 2008 to October 2010. She then joined Law Firm 2 as a partner and worked there from October 2010 to November 2014. Vendor 1 and Vendor 2 purported to provide litigation support services to both of those law firms.
Ravelo and Feliz either created or caused to be created both vendors, including having bank accounts opened in Vendor 1’s and Vendor 2’s names, and controlled those bank accounts. Ravelo and Feliz used Vendor 1 and Vendor 2 to fraudulently obtain money from Law Firm 1, Law Firm 2, and a client of both those firms by submitting invoices to both law firms for work that was not performed. Funds paid to Vendor 1 and Vendor 2 were allegedly used to pay the personal expenses of Ravelo and Feliz or were transferred to a joint account held by them. Checks were issued from accounts controlled by Ravelo and Feliz to certain individuals for allegedly performing litigation support work. Law enforcement officers interviewed some of these individuals, who stated that they never performed any legal or litigation support work for Vendor 1 and/or Vendor 2. Law firm employees who worked with Ravelo on matters allegedly supported by the vendors stated that they reviewed no work product produced by either Vendor 1 or Vendor 2. Individuals who opened the respective bank accounts for Vendor 1 and Vendor 2 said they did so at the request of either Ravelo or Feliz and then signed blank checks, which were given to Ravelo or Feliz.
The two law firms paid Vendor 1 and Vendor 2 more than $5 million. Ravelo, in her capacity as a partner at the law firms, approved many of the payments from the law firms to Vendor 1 and Vendor 2. The couple funneled the majority of the fraudulently obtained funds into their joint bank account and used the funds to pay for their personal expenses and investments, which included $250,000 in payments to a jewelry store.
Both law firms and the client have cooperated with the investigation.
The charge of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, twice the gross profits to the defendants or twice the gross loss sustained by the victims.
U.S. Attorney Fishman credited special agents of the DEA, Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, New Jersey, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorneys Andrew Kogan, Brian Urbano, Ronnell Wilson and Marion Percell, of the U.S. Attorney’s Office Criminal Division and Assistant U.S. Attorney David Foster of the U.S. Attorney’s Office Special Prosecution’s Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Ravelo: Aidan O’Connor Esq., Hackensack, N.J., and Steve H. Sadow Esq., Atlanta, Ga.
Feliz: Patrick Joyce Esq., New York