Lawyer Dreier Charged by U.S. With $100 Million Fraud

Lawyer Dreier Charged by U.S. With $100 Million Fraud

Dec. 8 (Bloomberg) -- Marc Dreier, the managing partner and namesake of the 250-lawyer New York firm Dreier LLP, was charged by federal prosecutors with attempting to cheat hedge funds out of more than $100 million.

Dreier, who was arrested today, is scheduled to appear this afternoon in Manhattan federal court to face securities and wire fraud charges. His lawyer, Gerald Shargel, didn’t immediately return a call seeking comment.

The charges come on the same day Dreier was sued by Wachovia Corp. for defaulting on $12.6 million in loans. The lawsuit follows his arrest in Canada last week on a charge of criminal impersonation. Dreier’s law firm, which he founded in 1996, has offices in New York, Los Angeles and four other U.S. cities.

On Dec. 5, Dreier was released on $100,000 bail after spending three days in a Toronto jail for allegedly impersonating a lawyer at the Ontario Teachers Pension Plan. The group said in a statement that it alerted police Dec. 2 after learning a person visiting its offices was involved in “fraudulent behavior.”

The pension plan, which provides benefits to 278,000 teachers, said none of its staff or funds were involved in the alleged fraudulent activity.

According to a police statement filed in a Toronto court prior to Dreier’s bail hearing and based on information obtained from an informant, Michael Dreier “did fraudulently impersonate Michael Padfield with intent to obtain certain property.” Padfield is a lawyer for the pension fund.

Judith Regan

In March, Dreier sued publishing executive Judith Regan, claiming she owed the firm millions of dollars. Dreier had represented Regan in a $100 million defamation and breach of contract suit against her former employer, News Corp.’s HarperCollins Publishers LLC.

According to court papers filed by Dreier, Regan, who had agreed to pay the firm 25 percent of any verdict or settlement in the case, settled the case through another lawyer in January for an undisclosed amount that Dreier claimed was $10.75 million plus a share in film and television profits. The case is pending, according to court records.

Dreier was also sued by another former client, commercial real estate broker Kenneth Laub, who claimed the lawyer had given him a bad stock tip and was legally obliged to make up the loss.

According to a 2003 decision dismissing the suit, Dreier was representing Laub in a $40 million suit against a former investment adviser when he recommended that Laub invest $5 million in the stock of ACTV Inc., a software company, for a percentage of the profits.

Failed to Pay

Laub claimed Dreier failed to pay a $330,000 settlement of the dispute brokered over dinner in 2000 by New York lawyer David Boies.

In a statement filed with the court, Boies said Dreier agreed to pay the amount, but didn’t have enough money to do so. Boies said Dreier agreed at the dinner to pay Laub $50,000 every two months. Later, Dreier failed to sign a letter setting out the agreement and didn’t make the initial payment.

The case is U.S. v. Dreier, U.S. District Court for the Southern District of New York (Manhattan).

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