Brad Karp of Paul Weiss.
Photo: David Handschuh/ALM

Embattled auto industry titan Carlos Ghosn has hired top-gun corporate defense lawyers Brad Karp and Michael Gertzman of Paul, Weiss, Rifkind, Wharton & Garrison in New York to fight allegations that he underreported his income and misused company money, according to a source familiar with the matter.

Japanese authorities arrested Ghosn in Tokyo on Nov. 19 while investigating accusations that he failed to report income that he received over a five-year span that began in fiscal year 2010, according to a statement from Nissan Motor Co., which conducted an internal probe based on a whistleblower report. Prosecutors allege that Ghosn underreported about $44 million over five years, according to the Financial Times. He's also accused of using about $18 million in company money to buy several homes and pay his sister for sham consulting jobs, The Wall Street Journal reported.  

Nissan's board of directors voted to remove Ghosn as chairman of the company shortly after his arrest and its partner Mitsubishi Motors Corp. ousted Ghosn as chair Nov. 26. Ghosn has denied any wrongdoing and has not been criminally charged as the investigation unfolds.

While Nissan and Mitsubishi have given Ghosn the boot, he remains the chairman and CEO of the companies' French partner, carmaker Renault, which has appointed its chief operating officer to temporarily fill Ghosn's position.

Ghosn's reported attorneys at Paul Weiss did not respond to interview requests. Karp, chair of Paul Weiss, has received recognition from the New York Law Journal and The American Lawyer, which named him “Attorney of the Year” in October and a “Litigator of the Year” in December 2017, respectively.

Karp has a long roster of high-profile clients, including: Citigroup, JPMorgan Chase & Co., Bank of America, Morgan Stanley, Goldman Sachs, Deloitte, Johnson & Johnson, Bank of China, the National Football League and FIFA, according to the firm's website.

Last March, Karp helped Citi prevail in arbitration with Abu Dhabi Investment Authority, which had accused the bank of fraudulently inducing it to invest $7.5 billion in Citi during the financial crisis. The arbitration panel ruled in Citi's favor and awarded the bank more than $9 million in legal costs, according to Reuters.

Michael Gertzman

He also successfully defended JPMorgan in the U.S. Department of Justice's “Chinese princeling corruption” criminal investigation. The probe centered on whether the bank had hired the children of Chinese executives to secure their business. The bank ended up paying $134 million to the DOJ and Federal Reserve and another $130 million to the U.S. Securities and Exchange Commission to settle the case.

Gertzman, a partner at Paul Weiss, is a former assistant U.S. attorney who prosecuted cases involving securities fraud, mail and wire fraud, insider trading and public corruption, among other things, according to his law firm bio. His recent and current clients include several Japanese companies embroiled in regulatory matters and investigations.

Ghosn also has hired Motonari Otsuru, a prominent former prosecutor now in private practice, to represent him in Japan, according to reports from Japanese media. One outlet, The Asahi Shimbun, reported that Otsuru once led the Special Investigation Department of the Tokyo District Public Prosecutors Office—the agency that arrested Ghosn.

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Nissan Chair Carlos Ghosn's Troubles Hold Lessons for In-House Leaders