Legal News

Marc Dreier Denied Bail, to Remain Detained

By Ashby Jones

Getty Images

New York Giants Michael Strahan and Marc Dreier attend the 2008 Michael Strahan and Dreier LLP Charity Golf Tournament pre-party on June 29, 2008 in New York City. (Photo: Getty Images)

[Ed. note: The following is an updated version of a story filed earlier Thursday.]

The news just gets worse and worse for Marc Dreier, the once high-flying New York lawyer now alleged to have perpetrated a massive fraud against a a group of hedge funds. According to a story from Dow Jones Newswires’ Chad Bray (link not available), a federal magistrate judge on Thursday ordered that Dreier be detained shortly after prosecutors said the losses stemming from the fraud had grown to more than $380 million. Click here for previous blog posts on the recent travails of Marc Dreier.

At the hearing Thursday, Gerald L. Shargel, Dreier’s lawyer, asked the court to release his client on a $10 million bail, with Dreier’s 19-year-old son and 85-year-old mother acting as co-signers. U.S. Magistrate Judge Douglas F. Eaton in Manhattan ordered Dreier detained, but left the door open for him to be released on bail at a later date if the government gets a better idea about his finances.

”Mr. Dreier is the Houdini of impersonation and false documents,” Assistant U.S. Attorney Jonathan Streeter said in arguing that he be detained. ”He has been fooling some of the most sophisticated institutional investors in the world.”

Dreier has been in custody since his arrest Sunday night at New York’s LaGuardia Airport upon returning from Toronto. Dreier was arrested in Toronto last week on charges he impersonated another person to complete a business transaction.

Dreier, 58 years old, has been charged with securities fraud and wire fraud in the New York case, in which prosecutors have alleged he defrauded hedge funds. Dreier, who also is facing civil charges by the U.S. Securities and Exchange Commission, faces up to 20 years in prison on the fraud charges.

Shargel also said his client intends to “cooperate fully” with Mark Pomerantz, the court-appointed receiver for his law firm, in locating any missing funds.

On Thursday, Streeter said the fraud went back to at least 2006, though they’ve been unable to account for much of the missing money. He argued its possible that Dreier has millions of dollars stashed overseas.

”The money must be somewhere,” Streeter said.

Full post as published by Law Blog - WSJ.com on December 11, 2008 (boomark / email).