December 5, 2008 10:56 AM
Arrest of Dreier LLP Founder Clouds Firm's Future
Posted by Nate Raymond
Updated with on-the-scene reporting from the Globe and Mail of Toronto, as well as information on the charges:
Marc Dreier, the founder and managing partner of New York’s Dreier LLP, was arrested Tuesday in Toronto on a charge of impersonation.
"Basically what they are is that he impersonated himself as someone else and not himself," is how Constable Tonyo Vella, a Toronto Police Service spokesman, describes the charge.
A spokesman at the Ministry of the Attorney General says the charge specifically spins out of 403B of the criminal code, which makes it a crime to fraudulently impersonate someone to with the "intent to obtain any property or an interest in any property."
The police have created a synopsis of the allegations against Dreier, which was read during a Friday court hearing. Vella declined to elaborate on the charges beyond that.
The Globe and Mail, which sent a reporter to the hearing, says the charges against Dreier stem from a multimillion-dollar deal between the Ontario Teachers Pension Plan and Fortress Credit Opportunities. Dreier pretended to be someone else at a pension plan meeting, the paper reports. When the real person arrived, police were called.
Dreier's bail, which was set at $100,000 (CA) with conditions, was paid by an unidentified person, the ministry spokesman said. Dreier's next appearance in court is scheduled for January 22.
Dreier is represented by Canadian barrister Edward Greenspan. Speaking to reporters outside the Ontario Court of Justice this afternoon, Greenspan told reporters that Dreier arrived in Toronto on Tuesday. Asked why he was there, Greenspan wouldn't say.
Dreier spent three days in jail, Greenspan said. Guards wouldn't let him make a collect call home, Greenspan said, adding that Dreier was glad that his son and brother-in-law were in Toronto for the hearing. Dreier hopes to return to the United States as early as Sunday, Greenspan said.
In a statement, the pension fund said it "learned of fraudulent behaviour by an individual visiting our premises" and immediately alerted police.
"No Teachers’ staff member was involved in the fraudulent behavior," the statement said. "We have reviewed our security procedures in relation to this situation and we believe that no Teachers’ funds are involved."
Partners at the firm either declined to comment or hung up on a reporter seeking comment Thursday. Partners held an emergency meeting that night to discuss the matter, according to a person familiar with the situation. In addition, the firm canceled a holiday party scheduled to be held at the Waldorf-Astoria last night, according to The New York Times, which first confirmed the arrest.
Employees received an e-mail stating "it is critically important that any queries from the press be dispatched to" two of the firm's spokespeople, neither of whom have provided comment.
The legal blog Above the Law first broke the news of Dreier's arrest Thursday night.
The arrest is likely to pose unique problems for Dreier LLP. While the firm has more than 250 attorneys, Marc Dreier is the only equity partner.
Founded in 1996, the New York-based firm operates more like a corporation than a partnership, with Marc Dreier controlling the firm's expenses and liabilities. All other partners get guaranteed base compensation for two- or three-year periods and a bonus based on fees generated.
"This is a system for lawyers who believe democracy is overrated-or at least that it is in business," Marc Dreier wrote in a 2007 op-ed for the National Law Journal. "Under this alternative model, all policy decisions ultimately reside with the single equity partner."
Ironically, Dreier LLP was one of several firms that hired refugees from Milberg Weiss after that firm was indicted.
Reporters Zach Lowe in New York and Vesna Jaksic in Toronto contributed to this story.Make a comment