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New York Daily News – Park Avenue lawyer Marc Dreier was sentenced to 20 years in prison Monday by a judge who scolded prosecutors for wanting to jail him for as long as Ponzi swindler Bernard Madoff.
"Is the government serious about asking for 145 years?" Manhattan Federal Judge Jed Rakoff asked.
"To me, for the government to ask for 145 years is to demean the sentence Judge [Denny] Chin imposed on Mr. Madoff.
Law.com – Marc S. Dreier on Wednesday sent a confessional letter to the federal judge who will sentence him on Monday (pdf), describing in remarkable detail how he funded the once-admired expansion of Dreier LLP by committing frauds totaling more than $400 million.
Facing a recommendation from the government that he serve the rest of his life in prison but pleading for a measured sentence, Dreier, 59, said his seven-year downward spiral began with a simple theft from a client settlement fund and ended at the point where "I found myself running a massive Ponzi scheme with no apparent way out."
Dreier’s letter was submitted as defense attorney Gerald L. Shargel and Assistant U.S. Attorney Jonathan R. Streeter sent competing memos to Southern District of New York Judge Jed S. Rakoff taking a dramatically different view of the U.S. Sentencing Guidelines.
Minneapolis Star Tribune – A Prominent Manhattan lawyer has pleaded guilty to defrauding hedge funds of more than $400 million.
Fifty-eight-year-old Marc Dreier on Monday pleaded guilty to conspiracy to commit securities and wire fraud, securities fraud, wire fraud and money laundering. The charges carry a potential prison term of 30 years to life in prison.
New York Daily News – Marc Dreier will plead guilty to all charges stemming from the $700 million investment fraud he is accused of carrying out, his lawyer said Monday.
Defense lawyer Gerald Shargel said Dreier will enter the plea May 11 to securities fraud, wire fraud and money laundering charges. He wants to accept responsibility and show his remorse, Shargel said.
Until December, Dreier had led a law firm with 250 lawyers and celebrity clients, including Jay Leno and ex-New York Giants star Michael Strahan. He was arrested after hedge funds complained he was stealing from them.
North Country Gazette – A former registered broker with the National Association of Securities Dealers has been charged in a criminal information with conspiracy, securities fraud and wire fraud stemming from his participation with attorney Marc Dreier in the sale of fictitious promissory notes to various hedge funds.
Kosta Kovachev, 57, is charged with one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud. The Government also seeks to forfeit the funds Kovachev received from Dreier as payment for his fraudulent activities.
Seattle Times – An official appointed to recover the assets of a prominent Manhattan lawyer accused of defrauding hedge funds of at least $400 million says he has safeguarded more than $100 million in assets, including an $18.5 million yacht.
The court-appointed receiver, Mark Pomerantz, outlined his findings about lawyer Marc Dreier and his 150-lawyer firm, Dreier LLP, in a report made public Wednesday in U.S. District Court in Manhattan.
Dreier, 58, was arrested in December on securities fraud charges. He remains under house arrest while his lawyer, Gerald Shargel, prepares what he says is likely to be a guilty plea for his client.
BusinessWeek – A prominent Manhattan lawyer accused of peddling $700 million in phony securities to hedge funds will likely forgo a trial and change his plea to guilty, his attorney told a judge Thursday.
The defense announcement came at a hearing at which Marc Dreier pleaded not guilty to a revised indictment accusing him of money laundering in addition to previous charges of securities fraud, wire fraud and conspiracy to commit those crimes.
Bloomberg – The victims of Marc Dreier, the New York lawyer charged in a $400 million fraud, included Amaranth Group Inc., Perella Weinberg Partners and Blackstone Group LP’s GSO Capital Partners, U.S. prosecutors said.
Government lawyers identified the firms in a court filing in New York on Feb. 9 as three of the 20 institutions they claim are victims of Dreier’s thefts. Prosecutors didn’t disclose how much it alleges each of the companies lost.
Prosecutors say Dreier, 58, persuaded two hedge funds to give him more than $100 million by falsely claiming he was selling notes issued by Sheldon Solow, a New York developer, at a discount.
Bloomberg – Elliott Management Corp., the $12.8 billion hedge-fund firm founded by Paul Singer 32 years ago, told clients that it bought securities from Marc Dreier, the New York lawyer jailed for alleged fraud.
Elliott lost money on promissory notes purchased in October from Dreier, who had previously done work for the company, it said in an undated quarterly letter to clients. The firm’s Elliott Associates LP fund declined 9.2 percent in the fourth quarter, its worst quarterly loss.
“There are many reasons why funds lose money, but being defrauded is among the most embarrassing and annoying,” New York-based Elliott said in the letter, a copy of which was obtained by Bloomberg News. “We continue to adapt our processes to keep several steps ahead of fraudsters, and we maintain an attitude of probing skepticism. But sometimes we get hooked, as in the Dreier case.”
Bloomberg - Marc Dreier, the New York lawyer jailed since his arrest for allegedly cheating hedge funds, won’t be able to post the $20 million bond that would free him, his lawyer told a federal judge.
U.S. Magistrate Judge Douglas Eaton in New York today modified an earlier ruling that ordered Dreier held without bail until trial. Eaton required Dreier to have four co-signers and submit to home detention and electronic monitoring. Dreier’s lawyer, Gerald Shargel, said he will probably appeal.
“Effectively, that will keep my client in jail,” Shargel told Eaton, the same judge who set $10 million bail for accused swindler Bernard Madoff, who is charged with running an unrelated $50 billion Ponzi scheme.
Dreier, 58, was arrested Dec. 7 on charges that he persuaded two unidentified hedge funds to give him more than $100 million by falsely claiming he was selling at a discount notes issued by Sheldon Solow, a New York developer. Prosecutors later said “very sophisticated investors” lost $380 million. In a letter to the judge yesterday, they said that the loss topped $400 million.
Dreier, a graduate of Harvard Law School and Yale College, hasn’t formally responded to the wire- and securities-fraud charges. Prosecutors, who arrested Dreier on a criminal complaint, must file an indictment with the court by Feb. 7, Shargel said outside the courtroom.
Bloomberg - Marc Dreier, the New York lawyer accused of cheating hedge funds, said he told his 19-year-old son he could have properties worth $12.5 million after the teenager agreed to spend the summer with him, prosecutors said.
Assistant U.S. Attorney Jonathan Streeter in New York made the disclosure yesterday in a letter urging a federal judge to deny bail to Dreier, who is accused of defrauding investors of hundreds of millions of dollars. Streeter said statements made by Dreier to the receiver of his law firm, Dreier LLP, aren’t “credible” and that Dreier may have assets hidden overseas.
Dreier, 58, was arrested Dec. 7 on charges that he persuaded two unidentified hedge funds to give him more than $100 million by falsely claiming he was selling at a discount notes issued by Sheldon Solow, a New York developer. Prosecutors later said “very sophisticated investors” lost $380 million. In yesterday’s letter, they said the loss topped $400 million.
New York Daily News – Disgraced Park Ave. lawyer Marc Dreier gave fellow scamsters $100,000 to impersonate others in calls to victims, Manhattan federal prosecutors said Tuesday.
The new details emerged at a bail hearing for former broker Kosta Kovachev, 57, arrested yesterday for allegedly helping Dreier try to steal some $100 million from hedge fund managers.
Prosecutors say Kovachev pretended to be a real estate developer’s controller in an October sitdown with hesitant hedge fund managers. Kovachev also impersonated the developer’s CEO in a conference call, prosecutors say.
