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Lawyer Sentenced to 6 Months for Maxim Magazine Scam
A former lawyer has been sentenced to six months in prison for his role in a scheme to fraudulently induce lenders to provide tens of millions of dollars toward the purchase of Maxim Magazine.
Harvey Newkirk, a former counsel at a law firm in Manhattan, was convicted of one count of wire fraud after a five-week trial. He was found not guilty of conspiracy to commit wire fraud and aggravated identity theft.
Newkirk, who represented the company purchasing Maxim Magazine in his capacity as an attorney at Bryan Cave LLC, engaged in the fraud to induce lenders to provide capital for the purchase. He lied to lenders about the collateral they would receive for their loans, and concealed from them that the stock owned by Calvin Darden, the former Senior Vice President of U.S. Operations of UPS, was subject to restrictions and could not be pledged as collateral.
Newkirk also falsely promised lenders that they would have a first and sole priority interest in the purported collateral, when in reality only one lender could have any such interest. He provided lenders with fake account statements that purported to show Darden’s stock holdings, and went to great lengths to hide from Darden and Bryan Cave the existence of a lawsuit filed by one lender seeking to obtain the collateral of Darden.
Newkirk’s conviction and sentence mark the close of his journey from lawyer to felon, according to Manhattan U.S. Attorney Preet Bharara. ‘Harvey Newkirk, an attorney with a major law firm with an obligation and responsibility to practice law in good faith, instead violated the law by lying and defrauding lenders out of millions of dollars in an attempt to help his client purchase Maxim Magazine.’
Newkirk’s scheme was uncovered after one of the lenders placed approximately $5.5 million in escrow at Bryan Cave. Darden Junior arranged for the funds to be used to pay off debts owed by the company, rather than to purchase Maxim Magazine. Newkirk’s sentence was imposed by U.S. District Judge Jed S. Rakoff.
Key Facts
- State: New York
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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