Feds: Lawyer sentenced to 20 years in $700 million fraud

From Chris Kokenes and Jesse Solomon
CNN

NEW YORK (CNN) - New York attorney Marc Dreier, who pleaded guilty to charges of defrauding hedge funds of approximately $700 million, was sentenced Monday to 20 years in prison, according to the U.S. Attorney for the Southern District of New York.

In May, Dreier, 59, pleaded guilty to conspiracy to commit securities and wire fraud, securities fraud, wire fraud and money laundering. He faced possible maximum prison time of 145 years.

Dreier, who prosecutors said created a far-flung scheme targeting individuals, corporations and hedge funds, must forfeit "...proceeds of the fraud offenses and property derived there from, including real estate, a yacht, and a number of works of art" according to an indictment filed against him in March.

Prosecutors alleged that from 2002 to 2008 Dreier sold fake promissory notes and misappropriated client funds from his law firm. Losses to Dreier's clients and purchasers of the various fake notes exceeded $400 million, but Dreier himself collected over $700 million in profits from the fake sales, prosecutors said.

According to court documents filed last week by the U.S. District Attorney's office, "He impersonated clients - in person and on the phone - and recruited others to execute elaborate charades."

Dreier is the founder and managing partner of Dreier LLP, a law firm of more than 250 attorneys with offices in New York City, Los Angeles, and elsewhere in the country, federal officials said.

Dreier was arrested at New York's LaGuardia airport in December 2008 upon returning from Canada, where he attempted to impersonate one of his clients in order to sell a $44.7 million note, according to prosecutors.

–CNN's Emily Anderson contributed to this report.