Practicing as a solo attorney in Danbury, Frances Codd Slusarz is about 30 miles away from her former Dreier LLP office in Stamford. In reality, she’s about as far away from that previous life as one can get, and she’s not alone.
The story about Marc S. Dreier and the Ponzi scheme that led to the disintegration of his namesake 250-lawyer, Park Avenue-based firm in New York is a familiar one in the legal industry.
Nearly four years ago, Dreier was arrested in Canada on impersonation charges when he pretended to be a high-ranking attorney for a teachers’ pension plan. In the weeks and months that followed, the world learned of Dreier’s $400 million Ponzi scheme built on selling fake promissory notes to investors.
As the firm’s lone equity partner who controlled all financial matters, Dreier was using the scheme to finance a lavish lifestyle of expensive homes, yachts, artwork and cars. His firm paid attorneys handsomely and focused on high-end litigation, IP and sports and entertainment work.
While attorneys who worked in Dreier’s Stamford office have moved beyond that shocking chapter, they certainly haven’t forgotten about the abrupt end of the once high-profile firm.
“Time has given me some perspective, but I don’t think I’ll ever understand why Marc did what he did,” Slusarz said of her former boss. Dreier was sentenced to 20 years in prison in July 2009.
Over the past three years, Dreier has granted extensive interviews to try and explain his thinking. This spring, a documentary titled “Unraveled” was released, and it tells Dreier’s story from the criminal’s perspective. In the documentary, Dreier’s explanations for his behavior are similar to those he gave to “60 Minutes” and Vanity Fair magazine in interviews back in 2009.
In the film, Dreier says his fraudulent activity was driven by his “compulsion to appear to be doing extremely well.” He added, “Obviously, it’s easy to lose discipline when you’re spending money that’s not yours.”
Former New York-based Dreier associate and current filmmaker Marc H. Simon produced and directed the film that included about 50 hours of interviews with Dreier while he was under house arrest in 2009.
“As much as Dreier wants to put his spin and/or rationalization on his actions…he is held accountable and ultimately silenced by the judicial system,” Simon said in an email to the New York Law Journal earlier this year. “The arc of the film is a countdown to the sentencing order. That’s the proper ending.”
Slusarz has not seen the film. Part of the reason is that her method of dealing with what amounted to a professional landmine has been “to ignore the media reports as much as possible,” she said.
“I was very bitter,” she added. “You ascribe to people around you the same type of ethics you have because you would never work for an unethical company. We were all blindsided by [the firm's downfall].
She remembers hearing about Dreier’s arrest a day before the firm’s annual holiday party in December 2008. Suddenly there were no paychecks, no malpractice insurance and several dozen clients that needed assistance.
“We were just the walking dead for a few days,” Slusarz recalled.
Now she’s busy building up her solo commercial litigation practice. After Dreier LLP’s 2008 implosion staggered the Stamford office, several attorneys and staffers banded together to form the firm Pastore Osterberg, which was soon picked up by 500-lawyer firm Fox Rothschild.
That arrangement lasted a couple of years before the attorneys slowly started going their separate ways. This April, Slusarz decided it was time to go solo.
“My work style is better suited for a small firm or by myself,” she said. “I really like the flexibility to do what I want. I’m a much happier lawyer now.”
And she can’t help but be more cynical because of Dreier. In hindsight, it makes sense to her why “it was impossible to get expenses reimbursed” by the firm.
“I’ve now been programmed that when it comes to my law license and my practice, I’m the only person I can trust,” she said.
Joanne Rapuano knows the feeling. She was a junior associate at Dreier LLP who wasn’t part of the transition to Pastore Osterberg.
Rapuano took jobs with smaller firms as she tried to work her way back to the level of income she had been earning at Dreier.
“I took a job with a small firm in New York and I was up at 4 a.m. and home at 9 p.m.,” Rapuano said. “You do what you have to do. I was so desperate to maintain my status as an attorney in good standing. I just needed to feel like a lawyer.”
But from a financial standpoint, she felt like she was fighting an uphill battle. “You’re behind the eight-ball. The student loans were still rolling in and I had a mortgage,” she said, describing her working life after the career upheaval. “It takes years to start making money back.”
Rapuano aggressively networked and marketed herself to move back up the ladder. Her perseverance paid off when she was hired by Sikorsky Aircraft Corporation’s legal department in 2010. At Sikorsky, she is now a senior export specialist. She enjoys working in-house, drafting agreements and licenses for parts and helicopters shipped to Canada.
“In a weird way, I’m grateful” for what happened with Dreier LLP, she said. “I never would have been [at Sikorsky] if not for what [Dreier] did. I’m a big believer in ‘one door shuts and another opens.’”
But she still is bitter about former employees’ claims being ignored by creditors in the Drier LLP bankruptcy proceedings that are still ongoing. Rapuano put in a claim for about $11,000.
“It’s not going to be paid,” she said. “We’ll be lucky if we see pennies on the dollar.”
Slusarz said she’s owed approximately $14,000 by the firm, including her final paycheck, a guaranteed bonus, unpaid vacation days and travel expenses.
Joseph M. Pastore III, who kept 14 attorneys and three staff members together as Pastore Osterberg, said he is still owed approximately $200,000 by Dreier LLP.
“I’d be happy with a check for $10,000,” he said.
Pastore noted that creating the Pastore Osterberg firm was a proud moment for him in the aftermath of Dreier LLP’s collapse.
“We felt that was the best way to stay employed,” he said of creating the temporary firm, which as a group later joined Fox Rothschild. “Professionally, that was one of my finest moments.”
But since 2009, Pastore has been searching for a firm culture that replicates the old Dreier vibe, minus the criminal activity by the leader, of course.
“Dreier, for me, was the perfect place to work,” Pastore said. “The Dreier firm had high-end practices, took on sophisticated legal work and had an edge of success to it. The mentality was you’re ‘all in,’ and that doesn’t necessarily translate to every firm.”
Due to a client conflict, Pastore left Fox Rothschild in 2011 to join Smith, Gambrell & Russell, a firm of about 175 attorneys, where he’s a partner in the securities and litigation practices.
He admired the way Dreier LLP attorneys worked to keep clients happy by treating them fairly in billing and by being responsive at all hours, when necessary.
“I’m proud of the time I spent with the [Dreier] firm. I’m not proud of Mr. Dreier’s actions,” Pastore said. “I really don’t link the two. Dreier LLP was an excellent law firm.”
While several ex-Dreier attorneys continue to practice with firms or within corporations, others decided to shift their careers.
Former Connecticut-based Dreier associate Mally Steves Chakola, for example, joined Murtha Cullina for about a year before heading to the Washington, D.C., area to take an executive-level in-house position with the Maryland Paper Company.
While in D.C., Chakola accidentally discovered a new use for rose hip seed oil and was inspired to create a company called M. Steves that focuses on skincare products for women. Chakola, who now runs the company full-time from California, declined an interview for this story but noted that her entrepreneurial pursuit “has been positive.”
Even as the former colleagues have spread apart, they’ve maintained a connection, especially using social media. But on a deeper level, Slusarz noted, the group that survived the Dreier LLP meltdown and proved resilient over the past four years has a special connection.
“I feel a kinship with them,” she said. “There is a shared experience and that kind of bond won’t ever be broken.” •
This story contains reporting from the New York Law Journal, which is owned by the same company that owns the Connecticut Law Tribune.