U.S. judge gives fraud lawyer 20 years in prison

Date: Tuesday, July 14, 2009
Author: Reuters.com

Marc Dreier, a high-profile New York lawyer who admitted to a $400 million investment fund fraud that unraveled at the same time as Bernard Madoff's huge swindle, was sentenced to 20 years imprisonment on Monday.

Dreier's sentencing proceeding in Manhattan federal court was punctuated with discussion and comparison to the multibillion-dollar Madoff fraud after the government had asked for a 145 year sentence for Dreier. Madoff, 71, was sentenced to 150 years in prison last month for a fraud of as much as $65 billion with thousands of investors swindled.

"When you turn to the facts of the crime that Mr. Dreier committed, one must still be appalled," U.S. District Judge Jed Rakoff said. "It is a huge fraud by any standard, other than the Madoff standard."

Even though the better-known Madoff's fraud was much larger than Dreier's scheme, U.S. prosecutors had requested the same effective life term for the Harvard and Yale educated lawyer as they did for the once-respected financier.

Madoff's sentence was the stiffest handed down for big-time white collar crime compared with scandals of recent years involving executives of WorldCom, Enron and Adelphia, Refco and the Bayou hedge fund who received sentences between 12 years and 25 years.

Dreier, who once headed a 250-member law firm Dreier LLP on New York's exclusive Park Avenue, was arrested last December on charges of swindling hedge funds and investment funds in a four-year-long scheme that unraveled in the financial crisis.

The gray-haired Dreier, dressed in a dark business suit, stood in court and made his own statement before the judge handed him a 20-year prison sentence. He acknowledged that he had disgraced his former colleagues and the legal profession.

"I am sorry, deeply sorry for the harm, the sadness that I have caused so many people," Dreier said. "An apology doesn't fix anything, doesn't give anyone's money back and doesn't give anyone their job back."

He was indicted in January and pleaded guilty in May to charges including securities fraud, conspiracy, wire fraud and money laundering.

The indictment indicated investors were owed about $400 million after the lawyer purported to sell promissory notes on behalf of a New York developer and a pension fund in Canada.

U.S. prosecutors are seeking about $700 million in forfeiture from Dreier, who had lived a lavish lifestyle owning several homes, boats and a valuable art collection.

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

(Reporting by Grant McCool; editing by Carol Bishopric)