Accused Attorney Marc Dreier Under House ArrestFeb 17, 2009 | Parker Waichman LLP
Marc Dreier, founder and managing partner of Dreier LLP and the indicted Manhattan lawyer facing charges in a $400 million securities fraud case, is now under house arrest. The Associated Press (AP) reported that Dreier left jail last week, escorted by U.S. marshals, and is awaiting trial at his Manhattan Apartment. Dreier will be monitored by private security said the AP. If found guilty and convicted, Dreier could spend 20 years in prison.
Dreier was indicted last month on charges of securities fraud that are alleged to have cost hedge fund investors over $400 million in the course of four years—from 2004 through 2008; that he conspired to sell fake notes, supposedly issued by a New York real estate developer and by a Canadian pension plan; and that he misappropriated client funds, including funds placed into an escrow account and money obtained in the settlement of a client lawsuit. Dreier was jailed on December 7, where he remained because he was unable to meet stiff bail conditions such as $20 million and four co-signers.
Although prosecutors strongly protested, a judge ordered 58-year-old Dreier released, said the AP, which added that prosecutors are concerned that Dreier, who has made a number of international trips and might have hidden funds, is a flight risk. In response, Dreier agreed to armed, 24-hour, security who can use “reasonable force,” reported the AP, which said Dreier had to post $210,000 in advance to cover three months in security costs.
Dreier might not be the only member of his firm—once manned by over 250 lawyers—to face charges. Although Dreier was the only equity partner at his firm, the New York Journal recently published an article that raises the possibility that non-equity partners could face legal issues because of the scandal. The New York Law Journal wrote that many nonequity partners in Dreier LLP began leaving the firm once they learned Dreier had been taking money out of its escrow accounts; most are already working at other firms. Dreier LLP has also ceased to exist, but an ethics expert interviewed for the article said the former partners could still face liability for the firm's debts, and might also be in trouble over missing escrow funds. Many may also be required to return income they received from clients for work on unfinished matters they took with them when they left.