Criminal charges vs. Willkie ex-partner rear up in MasterCard antitrust case

February 10, 2015

Oh, to be a fly on the wall Tuesday afternoon at Willkie Farr & Gallagher, when the firm is slated to talk to retailers suing MasterCard about findings from Willkie’s internal investigation of the work of former partner Keila Ravelo.

Ravelo resigned from the firm in November, after Willkie learned she was under investigation by the U.S. attorney in Newark, New Jersey. In late December, Ravelo and her husband, Melvin Feliz, were charged with wire fraud for allegedly setting up two sham litigation services companies that billed Willkie and Ravelo’s previous firm, Hunton & Williams, more than $5 million. Ravelo and her husband are accused of using the $5 million to pay for personal expenses, including $250,000 to a jewelry store.

The criminal complaint also alleged that Ravelo and her husband had defrauded a client of Ravelo’s. It doesn’t name the company, but it is a matter of public record that Ravelo’s big client at Hunton and at Willkie was MasterCard, which she represented in the gigantic swipe fee antitrust class action against MasterCard and Visa in federal court in Brooklyn that started back in 2005. The $5.7 billion class action settlement received final approval in December 2013, but hundreds of retailers, including huge companies such as Wal-Mart and Target, opted to bring their own cases rather than participate in the classwide deal.

On Friday, Willkie in-house general counsel Stephen Greiner sent a cryptic letter to U.S. District Judge Margo Brodie of Brooklyn, who oversees the opt-out cases against Visa and MasterCard. The firm, Greiner said, launched an internal investigation when it learned of the government’s allegations against Ravelo. That review, the Willkie letter said, “has identified certain documents which we believe raise questions that appropriately should be discussed with the court concerning communications in which Ms. Ravelo was involved relating to this litigation.” The firm asked for an immediate conference to address the Ravelo communications, warning that the session might have to be held in the judge’s chambers.

Willkie sprung the news of potential issues with Ravelo documents on opt-out plaintiffs in a conference call Friday afternoon, according to a letter that Target’s lawyers from Vorys Sater Seymour & Pease sent to Judge Brodie on Monday. Another group of plaintiffs, represented by Constantine Cannon, told the judge in a separate letter that the Willkie preliminary disclosure actually came in a call with plaintiffs and defendants in a different antitrust class action, this one against American Express. Both plaintiffs’ lawyers’ letters informed Judge Brodie that their clients can’t participate meaningfully in a hearing about the documents until Willkie has given them more information about the Ravelo communications and the issues they raise. According to the letters, Willkie has told plaintiffs it will provide more details today.

I called Greiner and Willkie partner Wesley Powell, who came over to the firm with Ravelo from Hunton & Williams and worked with her on behalf of MasterCard, to ask about the Ravelo documents. In response, a Willkie representative sent me an email declining to comment beyond the letter sent to Judge Brodie on Friday. Kenneth Gallo of Paul Weiss Rifkind Wharton & Garrison, who is also representing MasterCard in the swipe fee litigation, was traveling and didn’t respond to my phone message. So I don’t know more about the potentially problematic documents than the scant information that is already in the public record.

But I’m willing to bet that this case is going to raise some interesting questions about attorney-client privilege at the intersection of civil and criminal cases. Willkie cooperated with the government’s investigation of Ravelo. Does its cooperation entitle plaintiffs in the litigation to see otherwise privileged communications between Ravelo and her onetime client MasterCard? How about materials from Willkie’s internal investigation?

And meanwhile, if Willkie discloses information to private plaintiffs in the MasterCard litigation, is Ravelo entitled to it? Her lawyer, Steve Sadow, told me in an email that she is. Willkie has so far not shared anything about its internal review with Ravelo or her counsel, he said. “Nor has it disclosed to us any information about documents that supposedly raise questions relating to Ms. Ravelo’s communications while employed by Willkie,” Sadow’s email said. “We will certainly seek full disclosure of all of Willkie’s ‘findings’ should that become necessary in the defense of Ms. Ravelo.”

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