Not a lot of people in Silicon Valley seem to be paying attention the incredible story of Marc Dreier, the Manhattan attorney arrested in December and accused of cheating more than a dozen hedge funds out of hundreds of millions of dollars.
Perhaps it partly owes to geography; though Dreier’s firm had numerous offices, including in New York, Stamford, Conn., L.A., and Santa Monica, he never set up shop in Northern California. Silicon Valley isn’t home to many hedge funds, either.
Yet Dreier’s deception, we’re learning, was as far-reaching as his sprawling practice, and I suspect that when all is done and the breadth of his reach is revealed, we’ll learn that his crimes hit closer to home than first imagined. I’ve already heard talk of one high-profile Valley victim. (I haven’t been able to confirm yet.) In a lesser case, just weeks before Dreier was picked up by authorities, CNet founder Halsey Minor retained the firm to sue the auction house Christie’s on his behalf.
The New York Times reported in December that creditors of a long-defunct Internet company, 360networks, may also have lost a bundle. A former Dreier attorney who’d represented the creditors said that nearly $40 million in proceeds from various legal actions that Dreier was supposed to wire to them never materialized.
If you haven’t been following the story, New York magazine has out a detailed profile of the man and many of his misdoings, including, as it states, “inventing $700 million in financial assets out of whole cloth, staging fictional conference calls, and impersonating executives, sometimes personally, sometimes with the help of an associate, all while snapping up Warhols and waterfront homes, partying with pop stars and football players, and chasing an endless parade of much-younger women.”
Like Madoff, Dreier pulled off the unthinkable with an astonishing audacity, and lived well for it. He owned a 123-foot yacht, tens of millions of dollars of contemporary artwork, luxurious cars, Hamptons homes, and much more.
Like Madoff, Dreier — whose criminality caught up with him largely because the economy tanked — has also spent much of 2009 under house arrest. As of this writing, he’s still living in an opulent, $10 million Manhattan condominimum that he owns and where his family is reportedly paying between $30,000 and $70,000 a month for around-the-clock security for him.
Dreier, like Madoff, is also expected to enter a guilty plea, sometime between now and June, after which he’s expected to spend decades, and possibly the rest of his life, in prison. Unfortunately, to the many he swindled — and who still don’t know how much, if anything, they’ll ever recover — that sentence won’t be nearly long enough.
For the New York story (a must-read), click here.
[Update: Fortune has just published its own story on Dreier, with some additional details, including a great scene with a matrimonial attorney who was courted by the firm in 2007 and who recounts her meeting with Dreier in crisp detail: “Separate elevator bank, private entrance.” Upon returning home, she’d told her husband that the meeting was like “going to see the Wizard of Oz. I got the feeling of smoke and mirrors.” Fortune’s story is here.]