The New York Times by ALISON LEIGH COWAN and WILLIAM K. RASHBAUM - December 5, 2008
Marc Stuart Dreier, a high-living New York lawyer who has a gaggle of celebrity clients and a large firm that bears his name, was released from a Canadian jail on Friday after promising to return to court to face charges that he impersonated another lawyer on Tuesday at the offices of a large Canadian pension fund. The bizarre arrest and the murky circumstances leading up to it dealt a blow to the 250-person law firm, where the staff at the New York office spent Friday boxing up papers, making copies, calling clients and forwarding press calls to the firm’s spokeswoman, who was unavailable for comment. No one contacted at the firm was able to detail why Mr. Dreier’s arrest had caused such tremors at the firm. But clusters of lawyers announced their resignations from the firm, according to correspondence sent to clients by one of the departing groups of lawyers.
“The firm’s falling apart,” said an associate of one of the departing lawyers who did not want to be quoted because of the potential legal problems facing the firm. “This has just been a complete lightning strike. The lawyers are completely gobsmacked.” Mr. Drier, 58, a Yale University alumnus who got his law degree at Harvard, had been a partner at two prominent New York firms before starting his own firm in 1996. His client roster includes names like the rock star Jon Bon Jovi and the former football star Michael Strahan, and he lived a moneyed lifestyle, with homes on Manhattan’s East Side and in the Hamptons. Toronto police have said that they were summoned to the offices of Ontario Teachers’ Pension Plan on Tuesday. They charged Mr. Dreier with impersonating a lawyer through his remarks and also by handing out another person’s business card. Constable Wendy Drummond, a police spokeswoman, said the business card had the name of Michael Padfield, a senior lawyer with the pension plan.
A legal blog called “Above the Law” broke the news of the arrest on Thursday night, just hours after Mr. Dreier’s firm canceled its Christmas party, which had been scheduled to be held at the Waldorf-Astoria. On Friday, several organizations issued statements to clarify their roles in, or distance themselves from, Mr. Dreier’s arrest. But despite the flurry of public comment, few clues emerged about what, if anything, might have led the savvy Mr. Dreier to attempt to impersonate a man who was likely to be known by people in the building. It also remained unclear what relationship, if any, he had with the pension plan. A statement released by Ontario Teachers’ said: “On Tuesday afternoon, we learned of fraudulent behavior by an individual visiting our premises. We immediately alerted the police. An individual was arrested by the police has been charged. No Teachers’ Pension fund staff member was involved in the fraudulent behavior.” The statement also noted that the fund believed that “no Teachers’ Pension funds are involved.”
Fortress Investment Group, a New York hedge fund, also issued a statement on Friday noting: “While visiting Ontario Teachers’ offices on Tuesday afternoon, a Fortress employee observed suspicious behavior by an individual and immediately alerted Ontario Teachers’ staff.” The company said it will “continue to cooperate with law enforcement authorities in the investigation.” Even before Tuesday, Mr. Dreier had come under investigation by federal authorities in New York, according to lawyers with knowledge of the matter. By their account, that inquiry includes fraudulent business transactions going back several years and involving tens of millions of dollars. One big break in the case may have come a few weeks ago, they said, when representatives of Solow Realty, a New York real estate developer that had retained Mr. Dreier in the past, shared with authorities information it had suggesting that Mr. Dreier may have been involved in selling financial instruments that purported to be from Solow Realty to unsuspecting investors at hedge funds and elsewhere.
“Obviously, there has been absolutely no suggestion of any wrongdoing by Solow Realty and we’ve cooperated fully,” said Steven Molo, a litigation partner at Shearman & Sterling who is helping the Solow firm in the matter. Asked whether his client expected to sue Mr. Dreier if he were found to have used its name without permission, he said that Solow would be “exploring our legal options.” Court records also show Mr. Dreier has had a string of tax liens and judgments levied against him in recent years, including one for more than $600,000. Representing Mr. Dreier in Toronto is one of Canada’s preeminent defense lawyers, Edward Greenspan. He said Mr. Dreier’s brother-in-law and son came to Canada for Friday’s bail hearing, prepared to speak on his behalf, though that was not needed. “It took a couple of hours to do the paperwork, but he’s out,” Mr. Greenspan said shortly after Mr. Dreier had been released after meeting his bail of 100,000 Canadian dollars. For a lawyer who is sought after in many corners of the globe, Mr. Drier will be limited in what he can do and where he may go. Under the terms of his release, Mr. Dreier is not allowed to practice law in Ontario and he is barred from being in Toronto after Sunday, except for court appearances or meetings with his lawyers. Refering to his client’s troubles in Canada, Mr. Greenspan said, “No money passed, no money is missing and no money was ever missing.” Alain Delaquérière, Jason Grant and Colin Moynihan contributed reporting.