'Disgraced' lawyer admits $400 million hedge fund fraud

NEW YORK - Manhattan lawyer Marc Dreier has pleaded guilty to using fake documents to defraud hedge funds to the tune of $400 million. There was no plea deal with prosecutors, meaning he now faces up to 145 years in prison without the expectation of leniency. Recounting his crimes in court, Dreier admitted to cheating hedge funds, investment funds and individual investors between 2004 and 2008 by selling fictitious securities. Prosecutors say Dreier spent the stolen money on a lavish lifestyle, including $39 million in contemporary art, beachfront properties and a $18 million luxury yacht. The US government has already informed the court that federal sentencing guidelines call for a life sentence. US district judge Jed Rakoff said the crime "disgraced the honourable profession of law".

Dreier ran his own law firm, Dreier LLP, which employed 250 lawyers and had a book of clients including celebrities such as retired US footballer Michael Strahan and former News Corporation publishing executive Judith Regan. He now faces charges of conspiracy to commit securities and wire fraud, and money laundering. Judge Rakoff waved off objections by prosecutors to set Dreier's bail at $10 million until sentencing on July 13.