Marc S. Dreier on Wednesday sent a confessional letter to the federal judge who will sentence him on Monday (pdf), describing in remarkable detail how he funded the once-admired expansion of Dreier LLP by committing frauds totaling more than $400 million.
Facing a recommendation from the government that he serve the rest of his life in prison but pleading for a measured sentence, Dreier, 59, said his seven-year downward spiral began with a simple theft from a client settlement fund and ended at the point where "I found myself running a massive Ponzi scheme with no apparent way out."
Dreier's letter was submitted as defense attorney Gerald L. Shargel and Assistant U.S. Attorney Jonathan R. Streeter sent competing memos to Southern District of New York Judge Jed S. Rakoff taking a dramatically different view of the U.S. Sentencing Guidelines.
Dreier claimed that selling bogus promissory notes to investors was part of an attempt to salvage the 250-plus lawyer firm he founded, but he also acknowledged a taste for the good life that led him to dig a deeper hole with each fraudulent scheme.
"At the beginning, I spent most of the money growing the law firm," he said, "But as time went on, I was more and more self-indulgent. I bought extravagant things -- a beach house, an apartment, a boat, expensive art."
Dreier said that he always believed he would get the money needed to compensate his victims, but he could not.
"It all seems so obviously deplorable now," he said. "I recall only that I was desperate for some measure of success that I felt had eluded me. I felt that my law firm was my last chance to make a mark for myself and I was fearful of seeing it fail."
Later, Dreier said, "I will always be remembered as a thief."
Shargel wrote to the judge that his client expected to serve a "significant" sentence. But he appealed to Judge Rakoff for a prison term that is "both rational and proportionate" -- a non-guidelines sentence somewhere between 10 years and one month and 12 years and seven months behind bars.
Streeter, describing the depth of Dreier's selfishness and the damage he has done, asked for 145 years in prison, the maximum under the sentencing guidelines, or in the alternative, "a term of years that would both assure that Dreier will remain in prison for life (pdf) and emphatically promote general deterrence."
Dreier pleaded guilty on May 11 to one count of conspiracy to commit securities fraud and wire fraud, one count of money laundering, one count of securities fraud and five counts of wire fraud (NYLJ May 12). He has remained under house arrest in his 3,000-square-foot Manhattan penthouse since Judge Rakoff accepted his plea and said Dreier "has disgraced the honorable profession of law."
'A LIFE OF FRAUD'
Streeter, in his memo, put the total amount of Dreier's frauds at $740 million -- the amount of money that was stolen from hedge funds and other investors, the money that cycled through Dreier's own accounts and the money he stripped from attorney escrow funds at now-defunct Dreier LLP.
"With all of the advantages conferred by a comfortable upbringing, Harvard and Yale educations, and a solid start in the legal profession, Dreier could have pursued a rewarding and productive life as a lawyer, serving clients and the law, with compensation in the top few percent of the general population," Streeter wrote. "Instead, Dreier decided to seek vast personal riches and prestige through a life of fraud and through dishonor to his profession."