Harvey Newkirk, 39, of New Rochelle, NY, surrendered to federal authorities on Wednesday and was charged with one count of conspiracy to commit wire fraud and one count of wire fraud for his role in a scheme to fraudulently induce lenders to provide millions of dollars for a co-conspirator to purchase a nationally circulated magazine and related assets. Each count carries a maximum term of 20 years in prison. Newkirk is also charged with one count of aggravated identity theft, which carries a mandatory minimum and maximum sentence of two years in prison.
“As alleged, Harvey Newkirk shirked his ethical responsibilities as a lawyer when he participated in a multimillion-dollar fraud scheme, in which deception and misrepresentations were legion, in order to obtain the funds to purchase a national magazine,” said Manhattan U.S. Attorney Preet Bharara. “Fortunately, thanks to our law enforcement partners at the Secret Service and the FBI, Newkirk was apprehended and must now answer for his alleged conduct.”
Newkirk, formerly an attorney with the law firm of Bryan Cave, was an associate of Calvin Darden Jr. Together, the pair made a series of misrepresentations to lenders to induce these lenders to provide millions of dollars in capital to buy Maxim magazine and parent company Alpha Media from Cerberus Capital.
On November 4, 2014, Darden, Jr. pled guilty before the Honorable Jed S. Rakoff to, among other things, charges related to Darden’s participation in the scheme to defraud lenders for the attempted purchase of Maxim magazine. Under a plea agreement, Darden faces eight to 10 years in prison under his plea agreement with the government when he’s sentenced by Judge Jed Rakoff on April 3rd. He had originally faced up to 40 years in prison.
Darden Jr. has been in trouble before in including a prior conviction ten years ago for stealing about $6 million from various broker-dealers and investors including Nelly, a pop musician, and Latrell Sprewell, a former star player for the New York Knicks among several NBA teams.
Newkirk surrendered Wednesday morning to the Secret Service, and was presented this Wednesday afternoon in Manhattan federal court before U.S. Magistrate Judge James L. Cott.
“The arrest of Harvey Newkirk is another example of the Secret Service’s expertise in combating fraud and financial crimes,” said Secret Service Special Agent-in-Charge Robert Sica. “Our success in this case and other similar investigations is a result of the extraordinary work of our investigators and our close work with our network of law enforcement partners.”
From August 2013 to February 2014, in connection with the potential purchase of Maxim Magazine, Newkirk and Darden, Jr. made a series of misrepresentations to lenders to induce these lenders to provide millions of dollars in capital for the acquisition.
According to a statement issued by the U.S. Department of Justice, Newkirk falsely promised lenders that assets owned by Calvin Darden Dr. would be pledged as security for the loans.
Calvin Darden Sr., a leading businessman in Atlanta, GA was previously a senior executive for UPS. The father had no role in the fraud.
Newkirk made various promises without the authorization or knowledge of Calvin Darden Sr. In one instance, Newkirk and Darden, Jr. provided a lender with account statements that purported to show Calvin Darden Sr.’s holdings in the stocks of at least three publicly traded companies. Newkirk misled the lender into believing that Calvin Darden Sr.’s alleged stock holdings in these companies, as reflected in the account statements, would serve as collateral for the loan. In truth, however, the account statements were fake documents and Calvin Darden Sr. was not providing any financial support for the purchase of the magazine.
Furthermore, after one of the lenders placed approximately $5.5 million in escrow at Bryan Cave, Darden, Jr. arranged for a fraudulent email to be sent that purported to have been from the lender to Newkirk. In response to that fraudulent email, Newkirk released approximately $4.9 million of the lender’s money from the escrow account to fund the purchase of the Magazine. Newkirk also attempted to forward $535,000 of a lender’s money to a different potential lender, in order to pay a debt owed to that potential lender. Newkirk did so without the lender’s knowledge or authorization.
Throughout the course of the scheme, Newkirk repeatedly lied to lenders regarding his relationship with Calvin Darden Sr., falsely purporting to be Calvin Darden Sr.’s attorney despite having met Calvin Darden Sr. on only one prior occasion. In addition, Newkirk attempted to hide from Calvin Darden Sr. the existence of a lawsuit filed by one lender, in which that lender sought to obtain Calvin Darden Sr.’s assets that Newkirk had pledged to the lender without Calvin Darden Sr.’s knowledge. Newkirk also falsely represented to another lender, from whom Newkirk and Darden, Jr. were seeking $20,000,000 in financing for the Maxim Magazine purchase, that approximately $12,000,000, representing funds provided by, or secured by the personal assets of Calvin Darden Sr. for the Magazine purchase, had been placed in escrow at Bryan Cave. In fact, no funds were ever held in escrow at Bryan Cave in connection with the purchase, other than the $5.5 million placed in escrow by the lender, and subsequently misappropriated by Newkirk.
“Lying to lenders, creating fictitious documents, and purporting to be someone’s attorney are serious crimes,” said FBI Assistant Director-in-Charge Diego Rodriguez. “Newkirk’s alleged elaborate fabrications – in a ridiculous attempt to purchase a nationally circulated magazine – have finally been unveiled.”
In March 2015, during a consensual interview with law enforcement, Newkirk admitted that Calvin Darden Sr. had not been Newkirk’s client despite Newkirk’s multiple representations to the contrary to various lenders throughout the course of the attempted purchase of Maxim Magazine.
