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

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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.

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"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.