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Former SEC Attorney Pleads Guilty to Impersonation in Dreier Case
New York Law Journal
November 10, 2009
A lawyer pleaded guilty Monday to impersonating representatives of both a hedge fund and a pension fund in order to assist disgraced ex-attorney Marc S. Dreier in selling a phony promissory note.
The surprise plea and the lawyer's agreement to cooperate with prosecutors raised the possibility there might be more arrests in the investigation of Dreier, the former sole equity partner of 250-lawyer Dreier LLP who is serving a 20-year sentence for peddling hundreds of millions of dollars in bogus notes to investors.
Robert L. Miller, a former enforcement lawyer with the U.S. Securities and Exchange Commission, said he helped Dreier pitch a $44.7 million note to two investment funds.
Read the government's criminal information and Miller's agreement to cooperate with prosecutors.
"In summary, I agreed with Marc Dreier that I would make misrepresentations to two hedge funds to induce them to buy notes," Miller on Monday told Southern District of New York Magistrate Judge Ronald L. Ellis. "I knew that what I was doing was wrong and I deeply regret what I did."
Miller, 52, said he was paid $100,000 for phone sessions in which he impersonated a representative of a Canadian pension fund and then a hedge fund based in Iceland. He said that on both occasions he was heavily coached by Dreier on what to say.
Miller pleaded guilty to conspiracy to commit securities fraud and securities fraud pursuant to a plea agreement and is cooperating with Assistant U.S. Attorney Jonathan R. Streeter in the hopes of getting a break when he is sentenced by Judge Kimba Wood.
In November 2008, when the authorities were closing in on Dreier, Miller offered to sell a New York-based hedge fund a $44.7 million note ostensibly issued by a Canadian company, guaranteed by the Ontario Teachers' Pension Fund and held by the Icelandic hedge fund.
During a phone call with an unnamed New York hedge fund in November 2008, Miller pretended to represent the pension plan, but only after Dreier had given him an outline of the mythical transaction, a copy of the deal's documents, a fictitious e-mail address, the annual report of the pension plan and what prosecutors say were "detailed notes" of what he was supposed to say during the call.
Dreier wired $100,000 into a Miller bank account shortly thereafter.
On Nov. 26, 2008, when Dreier was told by the target hedge fund it was unlikely it would buy the note during the next few days, Dreier turned to another unnamed hedge fund as a backup target.
A representative at the second hedge fund called Dreier and asked to speak with someone with the Icelandic hedge fund that was supposedly selling the note.
Dreier called on Miller to impersonate a second time. He prepared Miller by having one of his assistants look up the weather in Reykjavik, Iceland, and by giving Miller a European cell phone on which to make the call.
Miller impersonated the representative of the Icelandic fund on Nov. 29 and Dec. 1, 2008.
Once the calls were made, the second target fund agreed to do the deal, but only if a representative of the Ontario pension plan appeared in person to sign documents.
Dreier flew to Toronto on Dec. 2, 2008, where he impersonated a lawyer for the pension plan and forged his signature. The move led to his arrest in Canada on a charge of criminal impersonation and his quick return to New York to face charges in the Southern District.
Miller declined to speak Monday after leaving the magistrate judge's court with his attorney, Jacob Laufer.
"He's made a mistake," Laufer said. "He's confronting the consequences of it. He's a decent man."
THIRD PERSON TO PLEAD
Miller, a resident of Englewood, N.J., was with the SEC between 1983 and 1986. According to the criminal information released Monday, he and Dreier managed an investment fund together from 1999 to 2008.
Dreier admitted on May 11, 2009, to selling more than $700 million in bogus real estate and pension plan notes to investors.
He pleaded 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. In addition to his prison sentence, Dreier has been disbarred.
Miller became the third person to plead in the Dreier case.
Like Miller, Dreier ally Kosta Kovachev did some impersonation as part of Dreier's scheme to defraud hedge funds of hundreds of millions of dollars.
Kovachev pleaded guilty Nov. 2 to conspiracy to commit securities fraud for pretending to be chief executive officer of Solow Realty & Development Co., once Dreier's biggest client, and the company whose identity he hijacked to sell fictitious notes to gullible hedge funds. Kovachev also posed as an accountant for the company on another occasion.
Laufer said Miller is unemployed. His name does not appear on the roster of the now-defunct Dreier LLP, which declared bankruptcy on Dec. 16, 2008, just weeks after Dreier surrendered to authorities.
Laufer declined to comment on what, if any, role Miller may have played at the firm.
Miller is scheduled to appear before Judge Wood on Feb. 5, 2010. No date has been set for sentencing.
Assistant U.S. Attorney Anna Arreola is also handling the prosecution.
