Amaranth, Perella Were Victims of Dreier’s Fraud, U.S. Says - Marc Dreier NYC Lawyer accused of huge fraud

Amaranth, Perella Were Victims of Dreier’s Fraud, U.S. Says

By Bob Van Voris

Feb. 11 (Bloomberg) -- The victims of Marc Dreier, the New York lawyer charged in a $400 million fraud, included Amaranth Group Inc., Perella Weinberg Partners and Blackstone Group LP’s GSO Capital Partners, U.S. prosecutors said.

Government lawyers identified the firms in a court filing in New York on Feb. 9 as three of the 20 institutions they claim are victims of Dreier’s thefts. Prosecutors didn’t disclose how much it alleges each of the companies lost.

Prosecutors say Dreier, 58, persuaded two hedge funds to give him more than $100 million by falsely claiming he was selling notes issued by Sheldon Solow, a New York developer, at a discount. He is also charged with embezzling client funds and selling fake promissory notes purportedly issued by a Canadian pension plan.

Dreier, a graduate of Yale College and Harvard Law School, is charged with conspiracy, securities fraud and wire fraud. Prosecutors said he faces as many as 30 years in prison if convicted. Dreier has pleaded not guilty.

Dreier also faces charges in Toronto, where he was arrested for impersonating a lawyer at the Ontario Teachers’ Pension Plan.

Amaranth, which was based in Greenwich, Connecticut, failed in 2006 after the hedge fund lost $6.6 billion. Perella Weinberg spokeswoman Renee Soto had no immediate comment on the court filing. A message left with GSO Capital wasn’t returned.

Armed Guards

Last week a federal judge ruled that Dreier may be released from jail on $10 million bond, which is to be cosigned by Dreier’s son and mother. Dreier will be confined to his luxury East-Side Manhattan apartment, watched by armed guards around the clock and subject to electronic monitoring and other precautions to ensure he doesn’t flee.

Gerald Shargel, Dreier’s lawyer, declined to comment on the court filing disclosing the alleged victims. He said he expects Dreier to be released to home custody by the end of this week.

Shargel has said repeatedly that Dreier would like to resolve the charges with prosecutors.

Also named among Dreier’s alleged victims are London-based Concordia Advisors LLC and Novator, a fund controlled by Icelandic billionaire Thor Bjorgolfsson.

“Concordia can confirm that certain funds under Concordia Advisors’ management were victimized in this case,” the firm said in an e-mailed statement. “We are cooperating with all of the authorities involved in the investigation.”

A voice-mail message left for Novator after business hours yesterday wasn’t immediately returned.

Elliott Management Corp., a $12.8 billion hedge fund, and Eton Park Capital Management LP, a New York-based hedge fund, previously told investors they had lost money to Dreier.

The case is U.S. v. Dreier, 09-CR-2676, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net.

Last Updated: February 11, 2009 00:01 EST
.