New York lawyer Dreier to plead guilty: attorney

Date: Tuesday, April 28, 2009
Author: Reuters.com

High-profile New York lawyer Marc Dreier will plead guilty next month to an indictment charging him with running an investment fraud in the hundreds of millions of dollars, his attorney said on Monday.

Dreier, once head of a 250-member law firm Dreier LLP and now under house arrest in his New York apartment, was accused of lying to hedge funds and investment funds that he was selling promissory notes on behalf of a New York developer and a pension fund in Canada.

"He will plead guilty to all of the indictment on May 11," Dreier's attorney Gerald Shargel said.

Papers filed in U.S. District Court in Manhattan in January and March detailed charges including money laundering against Dreier. Prosecutors are seeking about $700 million in forfeiture from the lawyer, according to court papers.

The indictment indicated that fraud victims were owed about $400 million from a scam that ran from 2004 to December 2008.

Dreier, 58, previously pleaded not guilty to charges including securities fraud, conspiracy and wire fraud. He was released from jail in February into house arrest and under armed guard in his apartment.

Harvard-educated and a lawyer for 30 years, Dreier was arrested on a charge in Canada, but granted bail there. He was arrested upon his return to the United States on December 7.

Dreier's fraud was uncovered around the same time as a series of schemes that unraveled in the financial crisis, including that of another, better-known swindler, Bernard Madoff.

Financier Madoff, a former nonexecutive chairman of the Nasdaq stock market, was arrested in December and pleaded guilty on March 12 to charges of running the biggest fraud in Wall Street history that took in as much as $65 billion over 20 years.

The case is US v Dreier 09-00085 U.S. District Court for the Southern District of New York (Manhattan)

(Reporting by Grant McCool; Editing by Andre Grenon)