Lawyer accused of aiding Maxim ‘scammer’ says he was duped too
Harvey Newkirk, the ex-Bryan Cave lawyer on trial for allegedly helping Calvin Darden Jr. dupe potential investors in an ultimately futile bid to buy Maxim magazine, took the stand in his own defense on Thursday.
Newkirk, in testimony in Manhattan federal court, denied he was in on the scam, saying he, just like the potential investors, was duped by Darden.
He thought Calvin Darden Sr. was the “chairman and 100 percent owner” of the company set up to buy the ailing laddie magazine from private equity powerhouse Cerberus Capital in 2013, he told the jury.
Prosecutors claim Newkirk played a leading role in the scam, going so far as to cook up fake documents to make it look like Darden Sr., a successful businessman and father of the younger Darden, was behind the purchase and guaranteeing the loans.
Newkirk told the five-woman, seven-man jury that he never knowingly supplied any false information to potential investors.
Earlier in the three-week-old trial, Darden Jr. testified that he and Newkirk “laughed about it” after the younger Darden got on the phone with one of the investors and impersonated his dad.
Newkirk was asked Thursday by his lawyer if the Darden story was true.
“No,” he said.
Newkirk was then asked if he knew the younger Darden was faking his father’s signature on documents.
“No,” he said.
Daddy Darden testified earlier in the trial that he was involved in the attempted acquisition in a “strictly advisory capacity.”
The elder Darden never guaranteed any of the loans — with stock, property or any other asset, he told the jury.
A parade of potential investors said they believed all along that they were dealing with the wealthy Darden Sr. — and that they would not have entered into any deals with just the son.
The junior Darden had already spent 3¹/₂ years in federal prison for an earlier stock scam that swindled more than $7 million from various people, including ex-NBA star Latrell Sprewell and rapper Nelly. Sprewell handed over $300,000 and Nelly $700,000 to Darden Jr. to invest for them. Instead, he spent the money on fast cars, a mansion on Long Island and a $200,000 shark tank, according to court papers.
When he got out of prison in 2008, prosecutors allege, he was soon back to scamming.
Darden Jr. pleaded guilty in November 2014 to fraud charges in connection with the Maxim deal — and an earlier separate fake deal to bring an NBA team to Taiwan.
Darden Jr. decided to cooperate with prosecutors in the Newkirk trial with the hope of avoiding a second trip to the slammer.
Newkirk testified on Thursday that he knew about Darden Jr.’s past conviction and that he spoke with his father “about 30 to 50 times” from July 2013, when the deal was hatched, until its collapse in early 2014.
Andrew Nikou, of Los Angeles-based Open Gate Capital, one of the potential investors, also testified Thursday that he had in October 2013 loaned Darden Jr. $3 million as a bridge loan to help provide short-term financing for the deal.
Nikou was not paid back in a timely fashion and sued the elder Darden, he told the jury, because he believed he was the borrower.
Ultimately, Nikou testified, he told Darden Sr. that he was going to foreclose on the stocks he believed Darden Sr. had pledged as collateral.
Darden Sr. “seemed confused” at first, Nikou testified, but then his reaction turned to “negative excitement.”
“He’s done it again!” Darden Sr. said, the LA investor told the jury, about the new alleged scam that ultimately led to his son’s arrest in February 2014.
Shortly after getting the call from Nikou on Nov. 19, 2013, Darden Sr. told his son and Newkirk that he was “out of the deal,” the elder Darden testified earlier in the trial.
Prosecutors are expected to begin cross-examining Newkirk as early as Friday.