Prominent N.Y. lawyer charged with defrauding funds

Mon Dec 8, 2008 5:01pm EST
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By Martha Graybow

NEW YORK (Reuters) - A prominent New York lawyer who heads the 250-attorney law firm Dreier LLP was charged on Monday with perpetrating a brazen, $100 million real-estate investment fraud that targeted hedge funds.

Marc Dreier, who already was facing a charge of criminal impersonation by Canadian authorities, faces federal charges of securities and wire fraud, the office of the U.S. Attorney in Manhattan said.

He was arrested late on Sunday at LaGuardia Airport after returning to New York from Toronto after a Canadian court released him on bail, authorities said.

The U.S. Securities and Exchange Commission also filed civil fraud charges against Dreier, a 58-year-old Harvard Law School and Yale College graduate who founded Dreier LLP in 1996 after previously heading the litigation department in the New York office of law firm Fulbright & Jaworski LLP.

The SEC said in court papers that Dreier "has confessed to many of the deceptions he engineered in the course of this scheme."

Dreier appeared before U.S. Magistrate Judge Douglas Eaton later on Monday, but his bail hearing was postponed to Thursday after his lawyer, Gerald Shargel, requested more time to "gather information."

"This is a very complicated matter, and the facts are beyond reach of a sound bite," Shargel told reporters outside the courtroom. He said he did not think Dreier was a flight risk.

At a second hearing with SEC lawyers immediately after Dreier's appearance, U.S. District Judge Miriam Goldman Cedarbaum agreed in principal to appoint New York lawyer Mark Pomerantz as a receiver to oversee the preservation of Dreier's assets, pending a hearing.   Continued...