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A judge issued a bail order Thursday paving the way for attorney Marc S. Dreier to exchange a jail cell for home detention while he awaits resolution of the $400 million fraud case against him. “I’m very pleased,” said Gerald Shargel, Dreier’s attorney, who immediately sent a copy of the ruling to his client at the Metropolitan Correctional Center. “This has been a long, two-month struggle and now we are working on getting him out,” Shargel said. While acknowledging that Dreier is a risk to flee, Judge Jed S. Rakoff concluded Thursday that the bail package proposed by Shargel “goes far to minimize this risk.” The judge agreed to remove the requirement that Dreier post $20 million bond, with $10 million secured by at least four responsible parties — a condition Shargel said “effectively” denied bail for his client. Instead, the judge accepted the defense proposal to post a $10 million personal recognizance bond, that, while not secured by cash, will leave both Dreier’s 19-year-old son, Spencer, and his 85-year-old mother, Mildred, on the hook if he fails to appear in court. The judge also adopted an admittedly controversial proposal that armed guards move into the Dreier apartment at 731 Lexington Ave. The guards will have the power to prevent Dreier from leaving and to use “‘reasonable force’ to thwart any attempt to flee,” the judge said. Dreier must pay the estimated $210,000 cost of the guards — representing $70,000 a month for the next three months — into an escrow account at the U.S. Attorney’s Office. Shargel, who has said his client is “penniless,” has indicated the money would come from relatives. Dreier, 58, has been in custody since Dec. 7, when he arrived at John F. Kennedy International Airport from Toronto, where he had been arrested for criminal impersonation. He has been indicted on charges of conspiracy, wire and securities fraud. Shargel had argued without success before Magistrate Judge Douglas Eaton, first on Dec. 11 and again on Jan. 22, that having his son and mother as co-signers would apply “moral suasion” to Dreier and prevent him from fleeing the country. In addition to the guards, Dreier’s detention would be monitored electronically and he would be expected to wear an electronic monitoring device. Dreier must agree to remove all cell phones and computers, along with knives and anything that could be used as a weapon. He will be allowed to use a land-line phone but without call forwarding or a modem, caller ID, call waiting, or portable cordless phone connection. All visitors to his East Side apartment will be screened and pre-approved by court pretrial services officers in consultation with the U.S. Attorney’s Office. Rakoff said he would issue a formal order on Monday, the earliest Dreier could be released. ‘MASTER OF DECEIT’ Judge Rakoff began his eight-page opinion by stating “How glorious to be an American citizen.” “In so many countries, the rights of citizens are not worth the paper they are printed on,” he said. “But here, any citizen — good, bad, indifferent, famous, infamous, or obscure — may call upon the courts to vindicate his constitutional rights and expect that call to be honored.” And the judge said he was called on by “citizen Marc Dreier” to insure that the Eighth Amendment’s prohibition against excessive bail was honored. Rakoff said he was persuaded to grant bail in part by the preliminary conclusions of court-appointed receiver Mark Pomerantz of Paul, Weiss, Rifkind, Wharton & Garrison that most of Dreier’s funds had been accounted for and he was not maintaining a “cash hoard.” “Yet, while this may reduce the risk of flight, it hardly eliminates it,” Rakoff said. “Whatever facts may ultimately emerge, the Government has carried its burden for the limited purposes of the bail hearing of showing that Dreier is not only a master of deceit and a doyen of dishonesty but the kind of person who, under stress, may resort to desperate measures.” The judge referred to Dreier’s “brazen impersonation” of a lawyer with the Ontario Teachers’ Pension Plan — a man “he had met minutes earlier” while on another alleged fraud mission. Rakoff also found that Dreier had deceived Magistrate Judge Eaton when he “emphatically” denied having taken a trip to Turkey and then later asserted “all too lamely” through counsel that he had forgotten the trip. “Furthermore, Dreier’s motive to flee is palpable, for he faces potentially large sentences if convicted, his money and assets are either frozen or spent, his family ties appear strained, and he has become a pariah to the profession in which he once practiced, as well as to the community at large,” Rakoff said. But he added that the “considerable set of conditions” he was imposing were enough to reasonably assure that Dreier would appear when required. At a bail hearing Monday night, the parties had debated the propriety of allowing some defendants to use their own funds to create “private prisons” while less prosperous defendants languished in jail. “It cannot be gainsaid that many kinds of bail conditions favor the rich, and conversely, that there are many defendants who are too poor to afford even the most modest of bail bonds or financial conditions of release,” Rakoff said in his decision. “This is a serious flaw in our system. But it is not a reason to deny a constitutional right to someone who, for whatever reason, can provide reasonable assurances against flight.” The judge also defended the hiring of private security guards by Dreier. He said New York law provides for the licensing of bail enforcement agents who perform “precisely this kind of task,” including apprehending people who fail to appear in court. The judge also said the Bail Reform Act contemplates releasing a defendant into the custody of someone who agrees to supervise them and assures the court the person will appear. “To be sure, a private security guard could face liability for using excessive force to prevent the defendant’s flight … but this is just as true of a policeman or a U.S. Marshal,” he said. Assistant U.S. Attorney Jonathan Streeter represents the government. The U.S. Attorney’s Office declined to comment on the ruling.

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