Expert: NYC law firm fraud charges "Enron, WorldCom kind of stuff"

The new Enron scandal? That's how the allegedly fraudulent activities by a group of high-powered New York lawyers at the now-defunct firm Dewey & LeBoeuf are now being characterized.

The firm's former executives are accused of massive financial fraud, stemming from the largest law firm bankruptcy in history. They face dozens of criminal and civil charges.

The Manhattan district attorney, Cyrus Vance, said the men conspired for years to hide the dire financial condition of their firm.

"The defendants simply lied," he said. "They lied and masked the firm's financial shortfallings. The scheme deceived lenders, investors and others into believing the firm was in far better financial condition than it actually was."

The case is significant due to the company's prestige and global footprint, CBS News financial contributor Mellody Hobson said on "CBS This Morning."

"This was Enron, WorldCom kind of stuff," she said.

Among Dewey & LeBoeuf 's one-time clients were The Walt Disney Company and Dallas Mavericks owner Mark Cuban.

At its peak, the firm had 3,000 people, including 1,300 lawyers in New York.

"You're talking about a firm that had half a billion dollars in debt," Hobson said. "... The four people running the firm were (allegedly) perpetrating this fraud. ... literally cooking the books, so it is a really big deal."

In addition to criminal charges, the Securities and Exchange Commission is also filing a civil suit because of the firm's 2010 private debt offering.

Hobson explained, "Thirteen insurance companies bought their bonds, which means they had a security. That means they were regulated by the SEC.

"Now the new SEC chair, Mary Jo White, has said when she finds that there's securities fraud she is going to be aggressive on crime, and ... when you read this indictment, 60 pages, 106 counts of fraud, the emails that they were writing to each other, shocking. ... This is, again, a story about email. Writing this down, you do not expect it from lawyers. They tell you [not to do that], which is the part that's crazy."