New Dreier Case Charges: Ex-Broker Was Paid $215K to Impersonate Executives
Posted Apr 23, 2009 5:36 PM CDT
By Sarah Mui
In a Wednesday filing, the government alleged that onetime registered securities broker Kosta Kovachev was paid $215,000 from Dreier operating and trust accounts to impersonate executives in Marc Dreier’s efforts to sell millions of dollars worth of phony promissory notes to hedge funds. Kovachev appeared for his arraignment on the new charges yesterday, the National Law Journal reported in an article reprinted in New York Lawyer (reg. req.).
"The parties are in discussion about a possible disposition (of the criminal case)," Assistant U.S. Attorney Jonathan Streeter said at the hearing, Dow Jones reported.
"We're not sure of our course of action," said Paul J. Madden Jr., Kovachev's lawyer, told Dow Jones after the hearing. "At this time, he's pleaded not guilty.”
Initially, Kovachev was only charged with one count of conspiracy to commit wire fraud, but now there are also counts of conspiracy to commit securities fraud, securities fraud and wire fraud. The filing (PDF provided by New York Law Journal) states that Kovachev posed as a finance staff member of a real estate developer in a meeting with employees of one hedge fund and in communications and related meetings with employees of a second hedge fund. Kovachev impersonated the CEO of the real estate developer in a conference call with a third hedge fund and took questions about fictitious financial statements Dreier had sent, according to the filing.
For this, the government says Kovachev was paid $115,000 from the Dreier firm’s operating account and $100,000 from its attorney trust account.
Kovachev is due back in court May 18.