By all appearances, Steven Woghin was a lawyer at the top of his game. After years in government service, the former Justice Department attorney had worked his way up to a comfortable six-figure salary and the chief legal job at software maker Computer Associates International Inc.
But this fall, the facade came crashing down, as Woghin pleaded guilty to criminal securities fraud and obstruction of justice charges. Prosecutors said he backdated sales documents and urged employees to lie to investigators of a $2.2 billion accounting fraud at the Long Island, N.Y., company. Woghin, 57, now faces a maximum 25-year prison sentence.
Steven Woghin, former general counsel of Computer Associates, pleaded guilty to criminal securities fraud and obstruction of justice charges. He faces a maximum sentence of 25 years in prison.
(Rick Maiman -- Bloomberg News)
Woghin's guilty plea came after regulatory crackdowns over the past year against lawyers at companies where fraud was discovered, including Rite Aid Corp., Symbol Technologies Inc. and Warnaco Group Inc. .
Prosecutors and enforcement officials at the Securities and Exchange Commission have warned that they will avidly pursue lawyers and accountants, who are supposed to help companies hew to the rules, if they bend them instead. They're also pushing companies and their attorneys to reveal more information about wrongdoing than ever before, sometimes urging companies to waive attorney-client privilege or face prosecution.
Legal experts said the SEC will play the lead role in policing lawyers because criminal charges against them can be extremely difficult to prove without clear evidence of personal enrichment or obstruction of justice. The SEC, which files civil charges, faces a lower burden of proof.
Yesterday at Washington's Ritz-Carlton hotel, a group of current and former SEC leaders met to assess the agency's efforts to crack down on lawyer misconduct. Lawyers have undergone heightened scrutiny since the December 2001 collapse of Houston's Enron Corp. -- a failure that resulted, in part, from secret, debt-laden business partnerships created with the approval of in-house lawyers and prominent law firms Vinson & Elkins and Kirkland & Ellis. In the past two years, the SEC has brought about 30 cases involving lawyers, officials said yesterday. SEC enforcement chief Stephen M. Cutler told an audience in September that more cases were on the way against lawyers who helped clients bilk mutual fund investors and attorneys who conducted sham internal investigations.
Responding to complaints from defense lawyers at yesterday's American Bar Association meeting that the agency was moving too aggressively, deputy enforcement director Linda Chatman Thomsen said, "I'm delighted that you're all worried. It's part of the job."
She stressed that the agency is not targeting lawyers alone, but instead it is closely examining the role that all executives and advisers played in corporate accounting blowups. The SEC is looking for evidence about what they disclosed to the public and how they structured deals, among other issues.
Experts say many of the corporate abuses of the 1990s, from excessive executive compensation packages to tax shelters to off-books deals, happened with the know-how, and blessing, of legal advisers.
"If your lawyer isn't going to help you out, it's going to be very hard to do . . . much more so than without accountants," Boston University law professor Susan P. Koniak said in an interview.