Marc Dreier, the once-prominent New York lawyer accused of ripping hedge funds and other investors off to the tune of more than $400 million, could be freed on bail, if only he could afford it.
U.S. Magistrate Judge Douglas Eaton—hours after ruling that Dreier be held without bail until trial—changed his mind, and said the accused fraudster could be released if he posts a $20 million bond. That figure, which also requires four co-signers, home detention and electronic monitoring, was twice that sought be his lawyers.
“Effectively, that will keep my client in jail,” Gerald Shargel, Dreier’s attorney, said. Shargel said he will probably appeal the bail amount.
Shargel argued that Dreier, whose eponymous Park Ave. law firm once employed 250 lawyers but has since his arrest filed for bankruptcy, argued that his client has cooperated with his firm’s receiver, and that he has no overseas assets to fund a flight. Shargel cited Eaton’s own bail conditions imposed on another accused hedge fund fraudster, Bernard Madoff, who is free on $10 million bail, and said Dreier’s sister and mother had agreed to pay to have the disgraced lawyer under armed guard at his 58th Street apartment. Prosecutors opposed the bail request.
Eaton, who has been roundly criticized for allowing Madoff to remain free, if confined to his luxury Manhattan apartment, brushed aside the comparison.
“I think the risk of flight is greater in Mr. Dreier’s case than in Mr. Madoff’s case,” Eaton said.
Dreier was arrested in Canada on charges of impersonating a pension fund lawyer at a meeting with Fortress Investment Group, before being charged with defrauding investors in the U.S. upon his return. Dreier and several associates are accused of posing as representatives of legitimate businesses to rip off investors. In one case, he allegedly convinced two hedge funds to buy more than $100 million in phony discount notes that he claimed were issued by a prominent New York developer.
In their letter to Eaton, prosecutors once again revised up the amount that may have been lost in Dreier’s alleged fraud to more than $400 million.