Lawyer to plead guilty to huge fraud

A prominent lawyer accused of defrauding hedge funds of at least $400 million is expected to plead guilty Monday to charges that carry a potential sentence of decades in prison.

Attorney Gerald Shargel told U.S. District Judge Jed S. Rakoff last month that his client, Marc Dreier, would plead guilty to securities fraud, wire fraud and money laundering charges.

The plea hearing was scheduled for late Monday. The 58-year-old Dreier has been under house arrest since bail was set despite government arguments that there were no conditions that could ensure he would appear in court.

It was likely that prosecutors will seek detention again after Dreier pleads guilty without a plea agreement. The charges carry a potential prison term of 30 years to life in prison. Shargel has said Dreier wants to “demonstrate his acceptance of responsibility and his profound remorse.”

Dreier until early December seemed to be a high-flying Manhattan lawyer, heading his own firm, Dreier LLP, with 250 attorneys and celebrity clients. He was first arrested in Canada on impersonation charges after hedge funds complained he was stealing from them. Freed in Canada on bail, he flew to New York City, where he was arrested by federal authorities at the airport.

Authorities say Dreier received $670 million between 2004 and 2008 from the sale of fictitious securities. They say he spent much of it on a lavish lifestyle that included $39 million in artwork, beachfront homes on both coasts and an $18.5 million yacht, “Lady Seascape.”

A court-appointed receiver has said $100 million in assets have been identified that can be pursued on behalf of victims who lost more than $400 million.

Copyright 2009 The Associated Press.