Former NYC SEC Attorney Pleads Guilty in Dreier Scam

Attorney Pleads Guilty to Aiding in Marc Dreier's Fraud
The New York Law Journal by Mark Hamblett - November 10, 2009

A lawyer pleaded guilty this morning to impersonating representatives of both a hedge fund and a pension fund in order to assist attorney Marc Dreier in selling a phony promissory note. Robert L. Miller, a former enforcement lawyer with the Securities and Exchange Commission (SEC), said he helped Mr. Dreier, currently in prison for 20 years, pitch a $44.7 million note to two investment funds. "In summary, I agreed with Marc Dreier that I would make misrepresentations to two hedge funds to induce them to buy notes," Mr. Miller told Southern District Magistrate Judge Ronald L. Ellis. "I knew that what I was doing was wrong and I deeply regret what I did." Mr. Miller, 52, said he was paid $100,000 for two phone sessions in which he impersonated a representative of a Canadian pension fund and then a representative of a hedge fund, and claimed he was heavily coached by Mr. Dreier on what to say.

Mr. Miller pleaded guilty to conspiracy to commit securities fraud and securities fraud pursuant to a plea agreement and is cooperating with Assistant U.S. Attorney Jonathan R. Streeter in the hopes of getting a break when he is sentenced by Judge Kimba Wood. Mr. Miller declined to speak after leaving the magistrate judge's court with his attorney, Jacob Laufer. "He's made a mistake," Mr. Laufer said. "He's confronting the consequences of it. He's a decent man." Mr. Miller, a resident of Englewood, N.J., was with the SEC between 1983 and 1986. According to the cooperation agreement, he and Mr. Dreier managed an investment fund together from 1999 to 2008. Mr. Dreier, the sole equity partner in Dreier LLP, pleaded guilty to selling more than $700 million in bogus real estate and pension plan notes to investors. Mr. Miller became the third person to plead in the Dreier case.

Like Mr. Miller, Dreier ally Kosta Kovachev did some impersonation as part of Mr. Dreier's scheme to defraud hedge funds of hundreds of millions of dollars. Mr. Kovachev pleaded guilty Nov. 2 to conspiracy to commit securities fraud for pretending to be chief executive officer of Solow Realty & Development Co.—once Mr. Dreier's biggest client, and the company whose identity he hijacked to sell fictitious notes to gullible hedge funds. Mr. Kovachev also posed as an accountant for the company on another occasion. Mr. Dreier on May 11 pleaded to one count of conspiracy to commit securities fraud and wire fraud, one count of money laundering, one count of securities fraud and five counts of wire fraud. Mr. Laufer said Mr. Miller is currently unemployed. His name does not appear on the roster of the now-defunct firm Dreier LLP, which declared bankruptcy on Dec. 16, 2008, just weeks after Mr. Dreier surrendered to authorities. Mr. Laufer declined to comment on what, if any role, Mr. Miller may have played at the firm. Mr. Miller is scheduled to appear before Judge Wood on Feb. 5. No date has been set for sentencing. Assistant U.S. Attorney Anna Arreola is also handling the prosecution. Mark Hamblett can be reached at mhamblett@alm.com.