Disgraced Lawyer Dreier Pleads Guilty To Fraud Charges
By Chad Bray, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Disgraced lawyer Marc Dreier pleaded guilty Monday to
fraud and other charges in an alleged scheme to sell $700 million in fictitious
promissory notes and misuse client funds.
Dreier, 58 years old, pleaded guilty to conspiracy, securities fraud, money
laundering and five counts of wire fraud at a hearing before U.S. District Judge
Jed Rakoff in Manhattan.
"From in or about 2004 to in or about 2008, I engaged in a scheme to sell
fictitious promissory notes," Dreier said.
He faces up to 20 years on each count of the most serious charges of
securities fraud, wire fraud and money laundering. Prosecutors have indicated he
should face a life sentence under federal sentencing guidelines.
Sentencing is set for July 13.
Prosecutors had alleged Dreier sold about $700 million in fake promissory
notes and misappropriated client funds from his law firm. The out-of-pocket loss
to investors and clients when the fraud was discovered in December was more than
$400 million, the government claimed. The overall scheme allegedly ran from 2004
to 2008.
The government claimed Dreier used money obtained from the scheme to support a
lavish lifestyle, including purchasing numerous homes, a yacht, luxury vehicles,
expensive art work and funding the operations of his law firm. Prosecutors are
seeking that he forfeit $700 million, including many of those assets.
Prosecutors had alleged Dreier sold fake promissory notes to at least 13
different funds and at least four different people.
Dreier told potential investors that he had the authority to sell promissory
notes issued by real-estate development company Solow Realty & Development Co.
in New York beginning in 2004 and promissory notes issued by Canadian pension
plan Ontario Teachers' Pension Plan beginning in 2008, the government claimed.
During Monday's hearing, Assistant U.S. Attorney Jonathan Streeter said Dreier
held parties in which he invited celebrities and he attempted to pitch the notes
to individuals. Dreier also approached lawyers he knew in New York to ask them
to solicit their clients to buy the notes, Streeter said.
Dreier also is facing civil charges by the U.S. Securities and Exchange
Commission, filed in December, and his assets have been frozen. His law firm,
Dreier LLP, filed for bankruptcy protection on Dec. 16.
-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
(END) Dow Jones Newswires
05-11-091835ET
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