Davis, DiCarmine and Sanders face up to 25 years in jail if found guilty.

Four members of collapsed law firm Dewey & LeBoeuf, including its three most senior executives, have been charged with larceny and fraud by the FBI and Manhattan district attorney.

Former chairman Steven Davis, chief executive Stephen DiCarmine, and chief financial officer (CFO) Joel Sanders were all named in the indictment today (6 March), alongside former client relationship manager Zachary Warren.

The four are alleged to have defrauded and stolen from the firm's lenders, investors, and others prior to Dewey's collapse in 2012.

The case, which is the result of a near two-year investigation by the district attorney's Major Economic Crimes Bureau (MECB) and the Federal Bureau of Investigation (FBI), could see Davis, DiCarmine and Sanders receive maximum jail sentences of 25 years each.

"Fraud is not an acceptable accounting practice," said District Attorney Cyrus Vance. "The defendants are accused of concocting and overseeing a massive effort to cook the books at Dewey & LeBoeuf.

"Their wrongdoing contributed to the collapse of a prestigious international law firm, which forced thousands of people out of jobs and left creditors holding the bag on hundreds of millions of dollars owed to them."

A complete list of charges can be found here.

Vance said management had hidden the firm's true financial condition from creditors, investors, auditors and partners. Seven employees have already pled guilty to crimes relating to their roles in the scheme, he added.

Separately, five executives – including Davies, DiCarmine and Sanders – were charged by the Securities and Exchange Commission over apparent misrepresentations in the firm's $125m (£75m) bond issue in 2010.

SEC Division of Enforcement Director Andrew J. Ceresney said: "Investors were led to believe they were purchasing bonds issued by a prestigious law firm that had weathered the financial crisis and was poised for growth.

"Dewey & LeBoeuf's senior-most finance personnel used a grab bag of accounting gimmicks to create that illusion, and top executives green-lighted the decision to sell $150m in bonds to investors as a desperate grasp for cash on the basis of blatantly falsified financial results."

Also named in the SEC civil action were former Dewey finance director Francis Canellas and controller Thomas Mullikin, currently at Paul Weiss Rifkind Wharton & Garrison.

The criminal probe was launched shortly after the collapse of the firm almost two years ago, with much of the evidence stemming from accusations made by former Dewey partners in 2012.

Davis, DiCarmine and Sanders were exempt from a $71.5m (£45m) settlement between ex-Dewey partners and the firm's estate in October 2012, though Davis later settled for $511,145 (£335,000) to resolve all claims.

Dewey's estate had claimed the trio over-distributed cash to select partners, relied on guarantee agreements "that bore no economic rationality" and concealed Dewey's "true financial condition from its partners, employees and creditors".

In his settlement, Davis denied "any wrongdoing on his part at Dewey" and that prior to bankruptcy, "he fulfilled his duties and at all times acted in what he reasonably believed was in the best interest of Dewey and its estate".

In January, it emerged the former chairman had been appointed as CEO to the Investment and Development Office of the government of United Arab Emirate Ras al Khaimah, which has no extradition treaty with the US.

In a statement DiCarmine's lawyer Austin Campriello of Bryan Cave said: "Steve DiCarmine is not guilty. He did not commit any crimes. He did not cause the collapse of Dewey & LeBoeuf. Steve was a salaried employee, not a partner, who worked tirelessly for Dewey & LeBoeuf.

"This indictment is guilty of scapegoating. It spins some inartful emails into crimes. It also betrays a lack of understanding of some basic principles of law firm accounting.

"It is very easy for a prosecutor to bring an indictment. The grand jury only hears one side. But cases like this crumble when an innocent person gets to mount a defense in court. And that is what we will do."

Davis' lawyer, Elkan Abramowitz, of Morvillo Abramowitz Grand Iason & Anello, said: "The actions taken by Steven Davis when he was Chairman of Dewey & LeBoeuf were taken in good faith in an effort to make the firm a success.

"The view of the District Attorney and the SEC of Mr. Davis's conduct is simply wrong. A fair review of all the facts will demonstrate that Mr. Davis committed no crime and no fraud and always acted in service of the firm's best interest."

Sanders' lawyer, Edward Little of Hughes Hubbard & Reed, called the indictment a "shocking development", and said that the former CFO had "worked tirelessly on the consolidation of the two predecessor firms and the attempt to survive the financial crisis that coincidentally occurred right after the merger".

Little added: "There was no fraud, and Mr. Sanders is guilty of no crime. Despite what the District Attorney's Office apparently believes, the public does not need a scapegoat every time a financial disaster is reported in the media."

Following Dewey's collapse, Sanders took up a post as CFO at Florida-based law firm Greenspoon Marder, while DiCarmine has reportedly is studying fashion design in New York.