Dreier Is Sentenced to 20 Years for Fraud

Disgraced lawyer Marc Dreier was sentenced Monday to 20 years in prison after admitting in May to a scheme to sell $700 million in fake promissory notes and to steal client funds.

At a hearing Monday, U.S. District Judge Jed Rakoff in Manhattan sentenced Mr. Dreier, one-time managing partner of the New York law firm Dreier LLP, to 20 years behind bars and to pay $387.7 million in restitution. The judge also indicated he would approve the government's request for $746 million in forfeiture.

"I am sorry, deeply sorry for the harm and sadness I have caused so many people," Mr. Dreier said. "At this point, all I can do is express my shame and remorse."

Mr. Dreier, 59 years old, pleaded guilty to conspiracy, securities fraud, money laundering and five counts of wire fraud in May. He was arrested late last year in Toronto after he impersonated another lawyer in a last-ditch effort to continue his fraud.

Prosecutors from the U.S. attorney's office in Manhattan had asked Mr. Dreier be sentenced to 145 years in prison, while Gerald Shargel, Mr. Dreier's lawyer, asked for 10 to 12 years.

The sentencing marks the end of a stunning fall for Mr. Dreier, who started his own law firm in 1996 and expanded the firm to about 270 lawyers with offices in New York, Los Angeles and Pittsburgh in the months before the scheme collapsed last year. He also became known for his flamboyant lifestyle -- driving fast cars and acquiring more than $30 million worth of art.

The revelations of his fraud came mere days before Bernard Madoff was arrested for his multi-billion-dollar Ponzi scheme, followed by several other high-profile frauds exposed during the economic meltdown. Mr. Madoff, who also pleaded guilty, last month was given the maximum prison sentence allowed by guidelines, 150 years.

When Mr. Dreier's fraud was discovered in December, the out-of-pocket loss to investors and clients was more than $400 million, the government said.

Mr. Dreier told potential investors that he had the authority to sell promissory notes issued by real-estate development company Solow Realty & Development Co. in New York beginning in 2004 and promissory notes issued by Canadian pension plan Ontario Teachers' Pension Plan beginning in 2008, the government said.

Prosecutors said Mr. Dreier, or other co-conspirators acting at his direction, impersonated representatives of the real estate developer and the pension plan. He also provided documents to investors with forged signatures, the government said.

The scheme began to unravel in November 2008 when the developer and the accounting firm confronted him, prosecutors said. It ultimately collapsed in December, when Mr. Dreier was arrested in Toronto.

In a revealing letter to the court last week, Mr. Dreier said his crimes in part grew out of his finding himself in great debt several years after starting the law firm, the collapse of his 15-year marriage and a crushing sense of underachievement.

"All of this left me feeling overwhelmed -- by my debt, by a disappointing career, by a failed marriage. And so, incomprehensibly, in 2002 I started stealing," Mr. Dreier said.

"First, I invaded some settlement proceeds due a client. Then I arranged a few bogus investments with some individuals. And soon I stumbled upon the brazen idea of arranging fictitious loans from hedge funds, ostensibly to my principal client -- the real estate developer referenced in the indictment -- and diverting the loan proceeds to myself."