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Lawyer Dreier, ‘Houdini of Impersonation,’ U.S. Says

Date: Thursday, December 11, 2008
Author: David Glovin

Marc Dreier, the founder of the New York law firm Dreier LLP in jail over criminal charges, is a “Houdini of impersonation” who cheated hedge funds and investors out of $380 million, a U.S. prosecutor said today.

“He is the Houdini of impersonation and false documents,” Assistant U.S. Attorney Jonathan Streeter said at a hearing over Dreier’s $10 million bail request today in New York. The victims of the fraud, which has gone on since 2006, are “very sophisticated investors.”

Prosecutors want Dreier, 58, held in jail. They have said the lawyer, a graduate of Harvard Law School and Yale College, convinced two unidentified hedge funds to give him more than $100 million by claiming, falsely, that he was selling at a discount notes issued by New York developer Sheldon Solow. Dreier hasn’t responded to the charges.

In a related civil case brought by the U.S. Securities and Exchange Commission, the agency claims Dreier stole $38 million from a client escrow account. That claim isn’t part of the criminal case. The SEC identified the escrow funds as belonging to the unsecured creditors of 360networks (USA) Inc., for whom the firm was counsel in a bankruptcy.

Separately, Dreier was arrested in Canada last week for impersonating a lawyer at the Ontario Teachers Pension Plan. On Dec. 5, he was released on $100,000 bail, only to be arrested when he returned to New York, where he lives.

Dreier faces as long as 20 years on each count for securities and wire fraud in the New York case.

Dreier is sole equity partner of Dreier LLP, which has 250 attorneys in six U.S. offices. Firm attorneys said in court papers that he spent as much as $40 million on artwork hanging in the firm’s offices.

The criminal case is U.S. v. Dreier, 08-mag-2676, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David Glovin in U.S. District Court in New York at dglovin@bloomberg.net;