Dreier Firm Head Charged with Fraud

Stock and Bond Fraud, including Boiler Rooms / Pump and Dump Schemes, Mutual Fund & Hedge Fund Fraud, FOREX scams, plus Churning, Private Placements, Venture and Bridge Funding, IPOs, Viaticals Fraud, HYIP and Prime Bank scams, MTNs, Historical Notes, Recovery Schemes, etc. Includes the Jim Norman Project and the Michael Dotson Project and similar HYIP scams.
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Dreier Firm Head Charged with Fraud

Postby Prof » Fri Dec 12, 2008 6:43 pm

Its not just the investment bankers and hedge funds; the crisis is exposing all sorts of scams.

Bail denied for NY lawyer arrested in Toronto

MArc Dreier accused of 'brazen' fraud: Authorities

Martha Graybow, Reuters
Published: Thursday, December 11, 2008
NEW YORK - A judge denied bail Thursday for a prominent New York lawyer accused of selling sham investments to hedge funds, a scheme that prosecutors now say may have been much larger than originally thought.

The case against Marc Dreier, founder and sole equity partner at the 250-attorney law firm Dreier LLP in New York, has stunned the city's legal community. The Harvard Law School graduate is a 30-year veteran lawyer, whose firm has specialties in bankruptcy, litigation and employment law.

Assistant U.S. Attorney Jonathan Streeter said in court the actual monetary losses in the case may now exceed $380 million, compared with about $100 million when the case was announced Monday. He said the fraud has likely been going on since January 2006.


Prominent New York litigator Marc Dreier, founder and managing partner of Dreier LLP, leaves court after making bail following his arrest in Toronto on Tuesday.
J.P. Moczulski/National Post


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Font:****Dreier was ordered to remain in custody. He was arrested on Sunday for what authorities called a "stunning" and "brazen" scam.

Streeter said Dreier had been fooling some of the world's most sophisticated investors. He is accused of scheming to market fake debt from a New York-based real estate developer to hedge funds and other institutional investors. Prosecutors say he cajoled his way into real estate and pension fund offices and created fake documents to try to convince investors that the worthless debt securities he touted were real.

"I'm going to order detention based on risk of flight," U.S. Magistrate Judge Douglas Eaton said at a hearing.

Eaton said he may revisit that ruling at a later date, but that for now, too much is unknown about Dreier's finances, such as whether the attorney has access to money abroad or has close associates who could potentially help him flee.

"The investigation is just beginning," the judge said.

Dreier, 58, faces federal criminal securities and wire fraud charges, as well as civil fraud charges brought by the Securities and Exchange Commission.

He has not yet responded to the charges in court, but his lawyer, Gerald Shargel, told the judge his client would cooperate fully with the court-appointed receiver hired to oversee the law firm's finances.

Dreier looked disheveled and unshaven, wearing a dark blue jail uniform and orange tennis shoes. His lawyer said he has been held under "inhuman" conditions at a Manhattan detention center and has been only allowed to shower infrequently.

Shargel had sought to have Dreier released on a $10 million bond and offered to have him placed under house arrest at Dreier's large home in Quogue, a village in Long Island, New York, with two armed guards on the premises at all times.

But Streeter said Dreier should remain in custody, calling him a scam artist of "exceptional ingenuity."

"Mr. Dreier is in a desperate situation and the only way for him out of the desperate situation is for him to flee," he said, calling him a "Houdini of impersonation and false documents."

Dreier's problems surfaced last week when Canadian police arrested him on charges of impersonation, a case authorities say is tied to the investment fraud. He was released on bail in Toronto, only to be arrested again upon returning to New York.

The SEC has filed court papers contending millions of dollars appear to be missing from client escrow accounts at Dreier LLP that only Dreier controlled. Also, Wachovia Corp

has sued Dreier and his firm for defaulting on loans.

Dreier was once head of litigation at law firm Fulbright & Jaworski in New York. Since founding his own firm, clients have included publisher Judith Regan in her defamation lawsuit against her former employer, media company News Corp. That case settled out of court.

His arrest has left his law firm in disarray.

"The news of Mr. Dreier's arrest has had a neutron bomb- like effect on Dreier LLP," Vincent Pitta, a partner at Dreier affiliate Pitta & Dreier LLP, said in a sworn court statement.

He said the firm is behind on its bills and "no one is in charge."


From Reuters.
"My Health is Better in November."

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Re: Dreier Firm Head Charged with Fraud

Postby Demosthenes » Fri Dec 12, 2008 7:02 pm

Holy crap.
Demo.

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Re: Dreier Firm Head Charged with Fraud

Postby Prof » Fri Dec 12, 2008 7:28 pm

CaptainKickback wrote:
Demosthenes wrote:Holy crap.


Word.


Google this mess; apparently Dreier showed up at a meeting in Canada dealing with some finance deal, but he was impersonating some other person.

Well, now 250 lawyers in Manhattan join the hordes of Christmas shoppers from Lehman Brothers and Citi.

"Masters of the Universe," one and all.

(p.s., I am sypathetic to the secretaries, clerks, paralegals, and associates, and their equivalents at the other firms. But I am tired of Wall Street gurus, legal and financial. I suspect that the word hubris applies.)
"My Health is Better in November."

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Re: Dreier Firm Head Charged with Fraud

Postby Prof » Sun Dec 14, 2008 9:59 pm

"My Health is Better in November."

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Re: Dreier Firm Head Charged with Fraud

Postby ASITStands » Wed Dec 17, 2008 7:13 pm

Prof wrote:(p.s., I am sypathetic to the secretaries, clerks, paralegals, and associates, and their equivalents at the other firms. But I am tired of Wall Street gurus, legal and financial. I suspect that the word hubris applies.)


I agree with that sentiment!

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Re: Dreier Firm Head Charged with Fraud

Postby Prof » Fri Dec 19, 2008 5:49 pm

For a fairly comprehensive story on Dreier, see todays WSJ: http://online.wsj.com/public/us
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