Dreier

Twenty Years for Dreier: “No Mr. Madoff”

Marc Dreier, Esq., 59, may have a chance to live the end of his golden years a free man. U.S. District Judge Jed Rakoff sentenced the admitted scammer to 20 years in federal prison for engineering a $400+ million scheme to steal from pension funds, institutions and a few individuals by selling phony promissory notes. The man called the “Houdini of impersonation and false documents” (according to Crain’s New York Business) was apparently very contrite in court yesterday, unlike Bernie Madoff, who apparently was considered not to be sincere in his apologies on his sentencing.

The prosecutors had asked for 145 years, saying that this was just as bad as Madoff’s $65+ billion theft of investment dollars from thousands of individuals, charities and businesses. The judge disagreed, saying, according to Crains, “Mr. Dreier is not going to get much sympathy from this court, but he is no Mr. Madoff under any analysis.” In fact, he went further and suggested a sentence like Madoff’s would “demean” the harsh sentence given to Bernie.

So with good behavior, maybe he’s out for his 75th birthday. Most of the people he bilked were professional investors who had the opportunity to do more due diligence than they apparently did. That is something else that distinguishes him from Madoff.  So for them, anyway, while I agree with the judge that Dreier needs to be punished, this seems a fair sentence to me.

Prosecutors Seek 145 Years for Dreier

Yesterday federal prosecutors told the judge they would like a 145 year sentence for 59-year old admitted swindler old Marc Dreier. As with the 150 year sentence for Madoff, obviously the intention is to ensure that he spends the balance of his life in jail for stealing $400 million from hedge funds and others. The prosecutors told U.S. District Judge Jed Rakoff that Dreier has dishonored the legal profession, according to Reuters.

He was presumably doing well enough running a 250 lawyer firm, but decided to pursue this fraud. Only he has the explanation for this. One also assumes, as with Madoff, that others assisted him, and it is not clear who those folks are yet. Dreier’s lawyer thinks 10-12 years would be sufficient. He acknowledged in a letter to the judge that he deserved a significant sentence. Does he deserve the same as Madoff? I’m not sure how one compares these frankly.

Dreier Pleads Guilty, Stays in Apartment

Lawyer Marc Dreier, former head of then 250-lawyer firm Dreier LLP, has pleaded guilty to all 8 counts of money laundering, securities fraud and other stuff which were brought against him. He will be sentenced July 13. His lawyer Gerald Shargel says there is no deal in place but that Dreier has cooperated in helping find assets and such.

While he awaits sentencing, his $50,000 a month security guards (he and friends are paying for it) will continue to watch him at his NY apartment. According to Bloomberg, he signed an agreement authorizing them to use lethal force if he tries to escape.

In a prepared statement, Dreier admitted to the scheme. Bloomberg quoted him as saying, “I engineered a scheme to issue and sell fictitious promissory notes purportedly issued by companies in the United States and Canada.” He has now admitted to essentially bilking a bunch of hedge funds out of about $400 million. Where was the due diligence guys??

Judge Jed Rakoff said that Dreier “has disgraced the honorable profession of law.” Keep an eye on civil cases that might be brought against Dreier and/or his cohorts by accounting firm Berdon LLP (he allegedly forged financial statements with their name on it) and all the various creditors of the law firm in its current bankruptcy. Sheesh.

Dreier Receiver Finds $100 Million

So far, those investigating admitted swindler Bernie Madoff appear to have found roughly $1 billion of the more than $50 billion he has basically acknowledged stealing. That is kind of stinky.

The slightly good news, according to Crain’s, is that accused other swindler Mark Dreier does have some cash on hand. Dreier, a lawyer and former head of Dreier LLP, is now accused of stealing about $700 million from hedge funds and institutions by selling allegedly fake promissory notes of real estate player Solow Realty. He recently pled not guilty to an updated indictment that included charges of money laundering.

Crain’s reports that the receiver overseeing things int he Dreier case has found at least $100 million. Dreier remains under house arrest after being let out of jail recently. If his victims can ultimately get back a chunk of what they lost, that would be a good thing. Maybe there’s more out there to find.

And What of Mark Dreier?

I am told that people close to accused swindler Mark Dreier felt the best thing that could have happened to him was the Bernard Madoff scandal. That $50 billion scheme took Dreier’s mere $350 alleged fraud right off the front pages.

Dreier allegedly sold promissory notes to hedge funds, claiming they were issued by well-known real estate firm Solow. They were in fact his client, but Mr. Solow apparently knew nothing about it. There is some suggestion that a senior Solor officer may have participated, but we just don’t know yet.

Amazing the hedge funds apparently did no due diligenc, but alas. With such a prominent attorney doing the selling, who would have imagined these were anything but legitimate? He even brazenly held meetings with potential investors in Solow’s offices without their knowledge.

Besides the victims of the fraud were the 250 or so lawyers and hundreds of other staffers at law firm Dreier LLP, which he was the founder and sole equity partner of.  Dreier was a wellrespected litigator with a history at large firms. Sound familiar? Similar MO to Madoff - build a reputation then milk it for fraud, knowing no one would question your integrity.

Dreier recently used the Madoff argument to change his bail arrangements and be let out of jail until his trial. Unlike Madoff, there is no sign Dreier will plead guilty, so this could take quite awhile. In the meantime, like Madoff, he waits in his fancy NYC apartment.

Unlike Madoff, there is probably a very small cast of characters that were in 0n the scam, apparently including a senior person or two at the law firm.  So it is not clear what cooperating with the government will do to help him, whereas old Bernie could sing like a bird and turn over a bunch of people who had to know what was going on.

So after Bernie’s  sentencing in June, we may once again read about Mr. Dreier. While some hedge funds are clearly embarrassed, truthfully there is not the same visceral anger that Madoff vicgtims have given so many literally lost their life savings.

Good luck Mark and oh yeah thanks for giving your fellow olawyers such a great name.