Ex-Willkie partner’s lawyer: Blame husband for false billing scheme

August 26, 2015

(Reuters) – On Tuesday, the U.S. attorney in New Jersey announced a plea deal with Melvin Feliz, an accused drug trafficker and financial schemer from Englewood Cliffs. Feliz is the estranged husband of Keila Ravelo, a onetime antitrust partner at Willkie Farr & Gallagher and Hunton & Williams who was arrested alongside Feliz last December. He pleaded guilty to tax evasion and to conspiring with Ravelo to defraud her former law firms by submitting phony invoices for litigation support services. In all, according to the statement, the two skimmed at least $7.8 million from the firms between 2008 and 2014.

Ravelo has admitted no such thing. After Feliz’s deal was announced, her defense lawyer, Steven Sadow of Schulten Ward & Turner, issued a very unusual statement, asserting that whatever Ravelo did, it was to appease Feliz. “Ms. Ravelo acted as Feliz coercively demanded – not freely, voluntarily or with criminal intent,” the statement said. “As the government has now seen fit to use its tremendous power to intimidate Feliz rather than seek real justice, Ms. Ravelo and her children will continue to suffer for his sins of abuse and pay dearly for his deceit, self-destruction and the interpersonal trauma he has caused.”

Ravelo’s case, as you know, has had unimaginable repercussions. After the government filed its criminal complaint against her, Willkie conducted an internal investigation of her files. The investigation revealed that antitrust class action lawyer Gary Friedman – an old friend of Ravelo’s who worked with her decades ago when she defended Feliz as a pro bono client – shared confidential information with Ravelo as the two litigated on opposite sides of a giant case pitting merchants against MasterCard and Visa. (Ravelo represented MasterCard.) Earlier this month, U.S. District Judge Nicholas Garaufis of Brooklyn rejected the merchants’ $79 million settlement with American Express in a parallel case in which Friedman represented the class. A different Brooklyn judge is considering motions by dissenting merchants to reverse court approval of the $5.8 billion MasterCard and Visa settlement.

Ravelo’s side of this complicated story has not been told. Unlike Friedman, she filed no brief in the proceeding over the documents he shared with her and has not publicly addressed the criminal charges against her. So after I read Sadow’s statement last night, I reached out to see what more he could tell me about a woman whose downfall has been painfully public. A caveat: This is a one-sided account from the lawyer for a woman scrambling for a way out of terrible trouble. I called Feliz’s defense lawyer, Jason Orlando of Murphy Orlando, to ask about Sadow’s accusations against Ravelo’s estranged husband. Orlando declined to comment. And obviously, it is in Ravelo’s interest to pin responsibility for the $7.8 million fraud on Feliz.

That said, Sadow depicted Feliz as a bully who stole from Ravelo’s law firms in order to fund his secret life as a drug trafficker – and to support a secret second family. According to Sadow, Feliz established an apparently legitimate litigation support company years before the alleged criminal fraud. Ravelo, he said, was not involved with the finances of Feliz’s business. Nor was she permitted to handle the family finances, according to Sadow: “Her estranged husband controlled every aspect of the family, made every decision involving money.”

After Feliz and Ravelo were arrested, Ravelo was granted release. Feliz remained imprisoned. Ravelo returned to their New Jersey house and began going through his papers. Only then, according to Sadow, did she find out that Feliz had been involved for at least five years with another woman and was supporting her and their child. Sadow said Ravelo was further undone when Feliz pleaded guilty in February to a conspiracy to smuggle cocaine into New Jersey. Ravelo, according to her lawyer, had trusted Feliz’s assurances that those charges were false.

The government has portrayed the phony invoice scheme as a way for Feliz and Ravelo to spend money on themselves and their investments. When the Bergen Record reported on the case in December, it cited Ravelo’s supposed fondness for expensive jewelry and handbags. Sadow rejected that account. “Keila’s conduct was not motivated in any way by money or greed,” he said. “She was making a substantial living working for the law firms.” It was Feliz, not Ravelo, who needed to gin up fake profits, according to Sadow.

I asked Sadow about Ravelo’s exchanges with Friedman, the class action lawyer on the other side of the MasterCard litigation. The emails recovered from Friedman and Ravelo’s files, as depicted in the ruling rejecting the Amex settlement, show Ravelo receiving information from Friedman, not passing MasterCard confidences to him. Sadow told me Ravelo always believed she was acting in the best interests of her client, MasterCard.

He also hinted that Ravelo’s criminal case may continue to impact the $5.8 billion class action settlement with Visa and MasterCard. A footnote in Judge Garaufis’ decision rejecting the Amex settlement refers to a 2012 report prepared for MasterCard by a litigation support vendor that had access to confidential Amex documents. The judge said that the evidence is not clear, but the report may indicate MasterCard benefited from documents Friedman improperly shared. According to Ravelo counsel Sadow, the litigation support business mentioned in Judge Garaufis’ footnote is Feliz’s company. (Government documents in the Feliz case do not name his businesses and I could not independently verify his connection to the company Garaufis named.)

Sadow said Ravelo has not seen Feliz, aside from court appearances, since their arrest. Her mainstay these days is their two teenaged sons. According to Sadow, the evidence will eventually show Feliz mistreated the entire family.

“Those facts will be made clear as time goes on,” he said.

(This story has been corrected. A previous version reported that Feliz had a 10-year relationship with another woman. Ravelo’s defense lawyer now says that relationship dates back at least five years.)

For more of my posts, please go to WestlawNext Practitioner Insights

Follow me on Twitter

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/