Legal Commentary

Two New Defendants: A Judge-Elect and a High-Powered Lawyer

By Jeralyn

The case of New York lawyer Marc S. Dreier is a strange one. He was arrested in Canada on Friday, after uncharacteristically appearing disheveled and allegedly posing as a lawyer for the Ontario Teachers Pension Plan.

When he returned to New York, he was arrested and hit with a complaint charging him with defrauding hedge fund execs of more than $100 million. Essentially, the Government claims, he was just a grifter all along.

This afternoon, the Judge ordered Dreier detained pending trial as a flight risk. [More...]

Dreier, a graduate of Harvard Law School and Yale College, faces as long as 20 years on each count for securities and wire fraud in the New York case. He is sole equity partner of Dreier LLP, which has 250 attorneys in six U.S. offices. Firm attorneys said in court papers that he spent as much as $40 million on artwork hanging in the firm’s offices.

The Government today put the swindle amount at $380 million and said almost all is missing:

“He is the Houdini of impersonation and false documents,” Streeter said. “Mr. Dreier is in a desperate situation, and the only way out of the desperate situation is to flee.”

The criminal case is U.S. v. Dreier, 08-mag-2676, U.S. District Court, Southern District of New York (Manhattan). The law firm, Dreier, LLP, seems destined to close up shop.

Also in the news: Judge-Elect Norah Anderson in New York has been charged with making illegal campaign contributions to herself, just weeks before she was scheduled to take the bench. Also charged: her law firm boss, Seth Rubenstein.

It appears Rubenstein loaned money to Anderson which she then transferred to her campaign to pay expenses, asserting it was her money.

Toward the end of August, Ms. Anderson got just what she needed. Two payments totaling a quarter of a million dollars were deposited into her campaign account, and in disclosure reports filed with the state, Ms. Anderson, a lawyer, said she had made a loan and a donation to herself.

But the money did not come from her own funds, prosecutors said on Wednesday. The actual source, prosecutors said, was Seth Rubenstein, a lawyer who was Ms. Anderson’s boss, friend and campaign adviser.

Ms. Anderson and Mr. Rubenstein conspired to conceal the money trail, prosecutors said, to avoid exceeding the individual donor limit of $33,122.50. State law allowed Ms. Anderson to contribute as much of her own money to her campaign as she wished.

Her lawyer says she did nothing wrong. Both Anderson and Rubenstein have pleaded not guilty to the state court charges.

Ms. Anderson and Mr. Rubenstein were indicted in State Supreme Court in Manhattan on felony charges of filing false documents and falsifying business records. If convicted, each faces up to four years in prison. They also face misdemeanor counts of knowingly and willfully violating contribution limits, punishable by up to a year in jail.

I'm not sure how this paragraph in the Times article enhances the story:

Both were ushered into the courtroom in handcuffs. Ms. Anderson wore black stilettos, a dark blue pinstriped suit, a Burberry coat and a pearl necklace. Mr. Rubenstein wore his thinning gray hair pulled back in a ponytail and a dark suit with a red tie.

On a positive note: Both Dreier and Anderson have excellent counsel. Gerald Schargel is representing Dreier and Fred Hafetz is representing Anderson.

Full post as published by TalkLeft on December 11, 2008 (boomark / email).