Dreir's star-studded client list

Mr. Dreier's downfall came on Dec. 5, 2008, when he was arrested in Toronto after visiting the office of Ontario Teachers' Pension Plan. He allegedly impersonated one of the fund's executives in an effort to sell $52-million worth of forged promissory notes to a hedge fund. Sources say he claimed the notes were issued by BCE and guaranteed by Teachers. He spent three days in jail and was re-arrested upon his return to New York.

The Globe and Mail
March 16, 2009

Dreier's star-studded client list
Tennis star Maria Sharapova among the celebrities ensnared in New York lawyer Marc Dreier's fraud case
Paul Waldie

MarcDreier.jpg

Marc Dreier, tip, leaves a Toronto courthouse in December. He's facing fraud charges in Toronto and New York. His law firm's client lists include Bill Cosby, bottom left, Maria Sharapova, Justin Timberlake and Diana Krall. Arantx Cedillo for the Globe and Mail, Wire Services

Before his arrest in Toronto last December, Marc Dreier was well known in legal circles for running a high-powered New York law firm and hobnobbing with celebrities. But few people knew much about the inner workings of Dreier LLP - until now.

Mr. Dreier faces criminal charges in Toronto and New York over allegations he orchestrated a $400-million (U.S.) fraud and recent court filings have provided extraordinary details about the firm and its stunning array of clients.

More than 800 pages of client names have been filed in a New York court, ranging from entertainment stars such as comedian Bill Cosby, movie director Tim Burton and pop singer Justin Timberlake to music groups the Virgins, the Dead Trees and the Black Angels to production company Monkey Dog Music.

Dozens of current and past music sensations were listed, such as Harry Connick Jr., Elvis Costello, Jon Bon Jovi, Diana Krall, 50 Cent, Echo and the Bunnymen and companies representing the Doors, the B-52s and the Ramones.

There were also pages of names of sports celebrities, including baseball players Andy Pettitte and Sammy Sosa, tennis star Maria Sharapova and hockey player Kevin Weekes, teams Manchester United PLC and the New York Mets and the Major League Baseball Players Association.

Ottawa Senators owner Eugene Melnyk was also a client, according to the filings, as was Bombardier Aerospace, Counsel Corp. and a subsidiary of BCE Inc.

The clients were officially entered as "creditors holding unsecured non-priority claims." None appeared to be owed money and some were surprised to be listed as a creditor.

"I resolved all my matters with the firm," said client Alexandra Zanella, co-founder of Ottawa-based Revolution Organics, a beauty products company. Ms. Zanella said she hired a Dreier lawyer but never met Mr. Dreier.

Stephen Weintraub, chief financial officer of Counsel Corp., said his company hired Dreier LLP because it "was a major firm." But he said Counsel was not owed any money and had no claim.

Mark Langton, a BCE spokesman, said BCE Nexxia in the U.S. was considering hiring Dreier LLP late last year. "But we had never actually signed a retention agreement, and of course did not move forward once the issues with Marc Dreier became public," he said.

John Arnone, a Bombardier Aerospace spokesman, said the company did not hire Dreier and has no idea how it got on the list.

According to the court filings, Dreier LLP worked with about a dozen Canadian law firms and some are owed small amounts. The largest debt, $8,475, is owed to the Ottawa office of Osler Hoskin & Harcourt LLP.

Mr. Dreier always prided himself on running a different kind of law firm. A graduate of Yale University and Harvard University, he spent 20 years working at various law firms in New York before setting up Dreier LLP in 1996. He promised that it would be a more "responsive and innovative" practice.

Unlike most law firms, Dreier operated like a business and not a partnership. Mr. Dreier was the sole owner and controlled all the finances.

He hired lawyers on three-year contracts, fixing their salary and paying bonuses based on the fees each lawyer brought in. According to court filings, some lawyers received more than $50,000 in salary every two weeks.

Mr. Dreier also had his two children on the payroll and he enjoyed extravagances, spending $10-million of the firm's money at New York's famed Gagosian Gallery last year.

In 2007, Mr. Dreier expanded to Los Angeles and brought in Hollywood superstar lawyer Larry Stein, whose clients included the Olsen twins and Hilary Duff.

The expansion boosted Dreier LLP's revenue to $90-million in 2007 from $60-million in 2006, according to court filings.

Mr. Dreier's downfall came on Dec. 5, 2008, when he was arrested in Toronto after visiting the office of Ontario Teachers' Pension Plan.

He allegedly impersonated one of the fund's executives in an effort to sell $52-million worth of forged promissory notes to a hedge fund. Sources say he claimed the notes were issued by BCE and guaranteed by Teachers. He spent three days in jail and was re-arrested upon his return to New York.

He has been charged with several counts of fraud and is currently out on bail.

Teachers and BCE were among roughly a dozen "organizational victims" of Mr. Dreier's alleged fraud, which began in 2004, according to court filings. Many were hedge funds that bought the allegedly bogus notes.

Mr. Dreier's arrest left his firm in shambles. It was put into bankruptcy and owes more than $40-million to various creditors, including many of its lawyers.


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