Canada, Dreier, White-Collar Crime

Founding Partner, Left Higher and Dreier? Blame Canada

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Prominent New York litigator Marc Dreier — founder and managing partner of Dreier LLP, former head of litigation for Fulbright & Jaworski (NY), and former litigation partner at Rosenman & Colin — was arrested in Toronto on Tuesday. The arrest was carried out by Canadian law enforcement.

The alleged offense appears to be financial in nature, with sources mentioning money laundering and misuse of escrow funds as possible charges. The Ontario Teachers Pension Fund and Fortress Investment Group may be involved in some capacity.

The effect of Dreier’s arrest on the firm that bears his name is unclear, but certainly not good. Sources report that some firm escrow accounts have been frozen by law enforcement authorities. Emergency partnership meetings were held Wednesday and today. (This may explain why Marc Dreier and a firm spokesperson did not immediately return our calls seeking comment.)

Marc Dreier lives well, with a fabulous Manhattan apartment rumored to rent for $50,000 a month, plus a place out in the Hamptons. “He lives the life of Greek billionaire tycoon, but he doesn’t make that much money,” says a former employee.

Dreier may not be a Greek billionaire tycoon, but Dreier LLP has been quite successful. According to its firm profile, since its founding in 1996, Dreier has grown to include more than 250 attorneys in six cities. The firm has had a number of high-profile clients, including billionaire developer Sheldon Solow and controversial book publisher Judith Regan (whom the firm later sued, claiming she skipped out on legal fees).

The firm’s holiday party was scheduled to take place tonight at the Waldorf. Not surprisingly, the festivities have been canceled. On one social networking site, a former Dreier employee wrote: “[xxxx] is wondering how he could work for two law firms (Milberg Weiss and Dreier) where both firms’ lead partners were arrested…. Sad commentary on life.”

Update (1:40 AM): Some addenda and corrections:

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1. Escrow accounts haven’t been frozen; they’re just short some cash — a lot of cash. One number being bandied about: $38 million.

2. The firm may not be able to make its next payroll, on December 15. There is only $300,000 in the payroll account, and the next payroll is for $2.6 million.

3. Fortress Investment Group is not involved.

4. The holiday party was canceled by an email sent out at around 5 p.m.

Further Update (6:35 PM): Actually, we were right the first time. Fortress Credit Corp., the entity involved in this matter, is a subsidiary of Fortress Investment Group, according to Am Law Daily.

We’ll keep you posted. If you have info to share, feel free to email us. Thanks.

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