White-Collar Crime

Feds: Attorney Marc Dreier Stole $380M; a 'Houdini of Impersonation'

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Calling New York attorney Marc Dreier a “Houdini of impersonation and false documents” who allegedly stole $380 million from hedge funds and investors, a federal prosecutor today urged that he be held without bail.

Assistant U.S. Attorney Jonathan Streeter also said the alleged fraud has been ongoing since 2006 and described its victims as “very sophisticated investors,” Bloomberg reports.

The article doesn’t say how the 58-year-old Harvard Law School graduate allegedly got his mitts on the money. However, as discussed in earlier ABAJournal.com posts, he has been accused of stealing $113 million from two hedge funds since October by persuading them to “invest” in fake paper supported by forged financial documents and removing client funds amounting to tens of millions of dollars from law firm escrow accounts into his own personal accounts.

According to the Wall Street Journal Law Blog, the prosecutor indicated that much or all of the money Dreier allegedly stole hasn’t been located: “Streeter said the fraud went back to at least 2006, though they’ve been unable to account for much of the missing money. He argued its possible that Dreier has millions of dollars stashed overseas,” the WSJ writes.

Counsel for Dreier was seeking his release on $10 million bond, in a federal court hearing today, but bond has been denied, reports the Associated Press.

“The evidence does appear to show an enormous risk of flight,” said U.S. Magistrate Judge Douglas Eaton during the Manhattan bail hearing, reports another Bloomberg article.

Marc Dreier is the founder and sole equity partner of the Dreier law firm, which once had nearly 250 attorneys but reportedly has been rapidly disintegrating following news of his initial arrest in Canada last week on a charge of criminal impersonation.

According to his lawyer, Dreier is working with temporary receiver Mark Pomerantz of Paul Weiss Rifkind Wharton & Garrison to identify the firm’s assets and get its finances on track, notes an earlier Bloomberg article.

However, the firm appears to be doomed: By the end of the week, as detailed in a subsequent ABAJournal.com post, Pomerantz was telling the remaining Dreier troops not to expect their paychecks on Monday, Dec. 15.

Updated at 11:30 a.m. to include information from additional Bloomberg article about judge’s comments and at 1:30 p.m. to include information from Law Blog. Updated at 2 p.m. on Dec. 12 to include information from latest ABAJournal.com post.

Earlier posts on ABAJournal.com:

Dire Situation at Dreier: Bills Unpaid, Client Funds Allegedly Missing

Dreier Troubles Show Danger of Single Equity Partner Structure

Dreier Controller: I Refused Jailed Boss’s Request for Escrow Millions

How Attorney Marc Dreier Allegedly Sold Worthless Forged Paper for $113M

Dreier Founder Charged in ‘Brazen’ Alleged $100M Investment Fraud Attempt

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