Marc Dreier's $400M Scam, The Inside Story

Prominent Lawyer Explains To 60 Minutes How He Pulled Off The Giant Scam And Why He Did It

(CBS)  If it hadn't been for Bernie Madoff, the most famous white collar criminal in America right now would probably be Marc Dreier. If that name is not ringing a bell, it's because Dreier's $400 million Ponzi scheme was blown off the front pages by Madoff's arrest just a few days later.

But the case is no less fascinating.

The highly respected attorney who ran a big Park Avenue law firm was initially arrested in Toronto for impersonating an officer in a pension fund, in what has been described as perhaps the most bizarre arrest in the history of white collar crime.

But unlike Bernie Madoff, Marc Dreier agreed to talk to Vanity Fair magazine and to 60 Minutes, his only television interview.

More from VanityFair.com:
Bryan Burrough: Marc Dreier's Crime of Destiny

"I thought if somebody would ever interview me on a program such as yours it would be for something good I've done, not something humiliating I've done," Dreier told correspondent Steve Kroft.

"This isn't the way you wanted to be on 60 Minutes?" Kroft asked.

"No," Dreier replied.

Nor was it the way that Dreier wanted to make his final appearance in federal court: as a defendant in his own fraud case.

When 60 Minutes first interviewed him last spring, he was a prisoner in his own penthouse, with a GPS monitoring device on his ankle, detained by private jailers whose $70,000 a month fee was being paid for by Dreier's 88-year-old mother.

With his assets frozen or confiscated by the court, all that remained of Dreier's $40 million art collection were the hooks on the wall.

"How did you end up becoming a crook?" Kroft asked.

"I can't remember the moment in which I decided to do something that I knew was wrong," Dreier replied. "I had an ambition that I needed to feed. I think I fell into the trap of wanting to be more successful than I was."

But he was successful. "I really wanted to distinguish myself. I wanted to be as important as I thought I was, deserved to be," he told Kroft.

With degrees from Yale and Harvard Law, and the ego of a successful trial lawyer, Dreier told friends he was going to become a billionaire. He started his own law firm that would revolutionize the business of law. He was going to hire the best attorneys, pay them top dollar, and keep all the profits for himself as the firm's only partner.

"The idea for the law firm was very viable. But it needed much more money to get off the ground than I anticipated, much more. So that wasn't very well thought out. I had a good idea, but a very bad business plan," Dreier said.

And the plan was about to get much worse.

With his law firm a money pit and Dreier tapped out, he began approaching hedge funds with a cockamamie scheme he thought might save his dream.

Dreier told the hedge funds that he was representing a billionaire real estate developer who was looking to borrow hundreds of millions of dollars to embark on some new projects.

The developer, Dreier said, would issue short term promissory notes, guaranteeing interest rates of between 7 and 12 percent, well above market rates. And it seemed like a very good deal.

The only problem was, that real estate mogul who was supposed to be borrowing all this money, Sheldon Solow, didn't know anything about it.

Nor did he know that Dreier, his former lawyer, was fabricating financial information about his company and keeping the loan proceeds for himself.

[richter01]

So I'm assuming creaturecom didn't work for or was a family member of someone who worked for this scumbag. I watched this a*hole treat my husband like garbage. He thought he was above everyone including the law. He reveled in his riches and stuff that he bought with stolen money. He had no problem showing it all off for everyone to see. He did accoplish something with this interview. He was able to find sympathy from people who don't know him. I'm sure if your family was affected the way my family has been, you would have a totally different opinion. He is a common liar and thief. Never to be trusted again!

[ebhaynz]

Yeah, no doubt this guy is a slime ball. Thankfully, he's where he belongs-in prison with other scum just like him. Think he cares about all the people he devastated? Not ONE Iota.

[quapawsix]

My Congratulations goes out to the top 2% in America you have successfully made it so our County now has two classes of people, the Extremely Greedy and the extremely needy.
Just a note remember what happened in France and Russia when their top 2% thought the masses would be satisfied with less and the masses needs did not out weigh the needs of the top 2%. If you don't might I suggest you read the Tail of Two Cities and the Russian Revolution and pay real close attention to the masses solution to the problem. I hope we have the will not to come to this.

[quapawsix]

You know how to tell when a lawyer is lying his lips are moving.

[quapawsix]

What a joke this money game that we have been forced to follow is. Money and credit is a scheme to keep you broke and in debt so people like this can live like kings and convince the public how smart they are and wall street and the Banker elite are doing the same thing only the have our wonderful leaders in Washington licking their boots, and allowing these people to take every advantage they can at the American public expense.

[quapawsix]

What a joke this money game is we have been forced to follow is. Money and credit is a scheme to keep you broke and in debt so people like this can live like kings and convince the public how smart they are and wall street and the Banker elite are doing the same thing only the have our wonderful leaders in Washington licking their boots, and allowing these people to take every advantage they can at the American public expense.

[laser01]

The movie (docu-drama) is due out real soon on Tom Petters. Paul Traub was a partner with both Tom Petters and Marc Dreier. The illicit immunity that Paul Traub's firm received from the DE DOJ Trial Attorney Kenney; will now be exposed for what it was - a Cover Up.
You can see links to the court docket records, DOJ resignations, promotions and shutting down of the DOJ Public Corruption Unit at www.petters-fraud.com/DOJ_Cover_UP.html
The REAL story is about to be told;
hold onto your seats!

[stinger1z]

Screw him and his lack of friends, he can't be trusted.

[PastorCJW]

My heart was broken by this story and the obvious penitence shown in the interview. Mr. Dreier may not have one but I would like to be a friend in this friendless time of personal need and help find a place of peace in this storm and ministerial vacuum.

[doc_holliday76]

by gmw7777:
"This verse is one of the most misquoted of all. The verse is: "The love of money is the root of all evil." The worst of the "seven deadly sins", therefore, is not pride--it is envy or jealousy. So every person from poor to rich and in-between can commit this sin and do!"
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I disagree. This only proves that the worst of the "seven deadly sins," is rampant GREED, which an unfettered capitalistic system with little regulation and absolutely no accountability thrives on!

[quapawsix]

Bible my ass this is a man made problem

[Questionews]

Only $400 Million?
This guy doesn't even rate high enough to carry Madoff's jock strap.

[hungry1968-16]

Capitalism is a failure, because it's been taken over by unadulterated GREED.

[MARYWILMA]

MY DAD TAUGHT ME TO ALWAYS BE AWARE OF THE THREE PEES. PREACHERS, POLITICIANS AND PHYSICIANS...IT APPEARS THAT LAWYERS SHOULD BE INCLUDED..

[bubbadubba]

What is this world coming to when you can't trust a trial lawyer?
LOL

[ramos1129]

He told Kroft his biggest deal was $100 million.

"And somebody just gave you $100 million and never bothered to check with your supposed, alleged client to make sure that this was on the up-and-up?" Kroft asked.

"Right," Dreier replied. "But I don't know?I guess I heard a long time ago, too, that the more money you look for, the fewer questions people ask sometimes."

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If you can't do the time, don't do the crime. While Dreir deserves to pay for what he did, the hedge funds and the other professionals do not have much to complain about. They failed to do due deligence and thus deserve to pay also. The Toronto fellow that did do his due deligence not only did not fail his responsibility be also helped catch Drier. The old rule of, "if it sounds too good to be true, then it is not" cannot be overstated.

The legal system should exclude claims by the hedge funds and other experienced money managers. Their greed got them into the mess they find themselves in.

[ceatkinson]

A funny thing happened when I was watching the segment on Marc Dreier -- I felt sympathy for someone who was guilty of committing a financial crime and perpetrating fraud! Having watched the Madoff's, Lay's, Skilling's, Boesky's, Keating's et al being run through the legal process, I don't ever recall any one of them admitting to wrongdoing or showing any evidence of remorse. Consequently, I never had anything but contempt for them. On the other hand, Drier's case elicited sadness and compassion. Either he continues to be the greatest actor on the planet or he is as remorseful as he appeared. I'll choose to believe the latter and respect him for that. I'm sorry that he claims to have no friends left -- if that is the case, he must not have had "friends" worth keeping anyway. I genuinely wish him well and hope he comes through this a better man...

[phoolish1]

he is only remorseful that he was caught. i saw no remorse for the crime itself

[creaturecom]

I felt the sadness too. I don't hold any ill-will toward him. I think most people like us know that if you "fess up" completely and mattter-of-factly, it's over, plain and simple. I would still be his friend and I hope that he will still have some in his corner...something happened to him, and he took the wrong road,we have all lost our sense of direction at times, he was just in the big leagues...

[John_Merritt]

I think we all know how these guys pulled the scams off. What I want to know is WHY? What gives anyone the right to take anything that does not belong to you and keep it for yourself or do with it want you want? No permission was askeD. At least the brokers state 'invest at your own risk'.

When these people promise interest earned on the monies inveted or a ROI of some type; the investor expects something other than to be bled dry. No recompense was delivered to the abused. Why would anyone play God with anothers life, and denude them of those things they will require for themselves and for their children in later years.

Ill gotten gains for thievery is contempable and I don't know what punishment is warranted for these type of crimes. I wish we could have someone like Goldman, JP Morgan, Morgan Stanley or other brokerage firms be given a chance, for a nice administrative fee, to and recoup these monies that have been stolen from many innocent people.

A lifetime of work wasted because someone desired 'coveted' someone's possessions. Than we have greed on top of the thievery. Lusting for someone elses possessions is no different that to lust after the offended themselves. I hope we can come up with some regulations for these sharks out there who feast on others.

[loirski]

The problem is pride - Pride comes before a fall
Greed is a sin, a result of pride.
If you have a healthy family, have a roof over you're head, don't go to bed hungry, you are a blessed person. Learn what God thinks about you and you won't have to spend your whole life trying to be something you are not. Are we losing our minds?

[curse914]

Tell that to a child born into poverty, then ask "god" why the majority of the 6 billion "souls" on this planet live in abject poverty.

[gallinp]

You've missed the whole point. This is simply another addict...addicted to money and power!

[laservonlqd8tr]

Big question is

Had the Feds not given Traub illegal immunity

how much would Petters, Dreier and OKUN been discouraged from doing their worse?

And is it not really strange that Madoff parties confessed the very weekend the story was to break on Petters, Dreier and OKUN all getting their crimes done after Traub was given the illicit get out of jail free card?

Wonder if Traub ever worked with Madoff?