New York lawyer sentenced to 20 years for $700 Million Fraud

Marc S. Dreier, once a high-flying New York lawyer who organized an elaborate fraud scheme that bilked hedge funds and other investors of $700 million, was sentenced to 20 years in prison by the judge, despite the government`s request for 145 years. That is just five years less than was successfully sought last month in the case of Bernard L. Madoff for his multibillion-dollar Ponzi scheme.

In carrying out his scheme, Mr. Dreier sold fake promissory notes to the hedge funds and other investors. He created phony financial statements and accounting documents, and paid people to impersonate others to trick prospective investors into believing the notes were genuine. Besides, documents show that Mr. Dreier had used the proceeds of his scheme to finance a lavish lifestyle. He owned a luxury apartment on the Upper East Side, properties in the Hamptons, a valuable art collection, expensive cars and an $18 million yacht.

Mr. Dreier offered an extensive apology to his family, his clients and the lawyers who worked for him. He cited a letter that he wrote to Judge Rakoff of Federal District Court in Manhattan last week, and said that he hoped that the victims of his crimes would read it or “hear me now,” and feel his shame and get some satisfaction. According to the letter, he began stealing in 2002, taking money from the settlement proceeds that were owed to a client.

Additionally, prosecutors have said that Mr. Dreier used some of the proceeds of his sales of fake notes to pay earlier investors like in the classic form of a Ponzi scheme. The victims of his fraud suffered more than $400 million in actual losses.

Mr. Dreier was ordered to begin serving his sentence immediately.