Legal News

Judge Says No to Bail Request; Dreier to Stay Behind Bars

By Nathan Koppel

Marc Dreier will continue to spend his days in jail. That was the ruling hours ago by New York federal magistrate Douglas Eaton, who concluded that Dreier needs to post a $20 million bond, co-signed by financially responsible people, before the magistrate will consider granting Dreier bail.

In response, Dreier’s lawyer Gerald Shargel said his client will likely remain in prison a long time if he has to come up with a $20 million bond.

The two-hour hearing included a lively discussion on whether Dreier is truly a flight risk. Shargel said relatives of Dreier have offered to shell out as much as $70,000 a month for armed security guards who would watch over Dreier at his New York City apartment. Also, Dreier has offered to have his mother and 19-year-old son co-sign a $10 million bail bond.

“No one in the history of this country has become a fugitive with this type of guard situation,” he said, noting that such a security package was part of the bail arrangement for Bernard Madoff and notorious mafia figure John Gotti, Jr.

Shargel also made an appeal to logic in questioning whether a $20 million bond, guaranteed by Dreier’s friends, really provided a meaningful assurance that Dreier would show up for trial. If Dreier could somehow overpower armed guards stationed at his apartment, Shargel argued hypothetically, would Dreier then hesitate to flee just because his friends had guaranteed a bond?

But Eaton was not persuaded in large part because of concerns about the nature of Dreier’s alleged fraud. Court filings allege that Mr. Dreier continued to perpetrate the fraud months after he was confronted by financial firms claiming to have detected wrongdoing, Eaton notes. That behavior, he said, was “entirely reckless” and provided evidence that Mr. Dreier was impulsive and potentially mentally unbalanced. “That makes this much different than Madoff, in my view,” said the judge, noting that Mr. Madoff had turned himself in.

Full post as published by Law Blog - WSJ.com on January 22, 2009 (boomark / email).