New York lawyer Marc Dreier was released on bail from a Toronto prison today after being accused of “criminal impersonation.” Specifically, he stands accused of pretending to be a lawyer for the Ontario Teachers Pension system in order to trick Fortress Investments into making a $50 million loan.
It’s not clear where the Fortress money would have gone, but based on other details (liens on Dreier’s houses, $38 million missing from his firm’s escrow funds), it seems possible he was trying to channel it to himself.
Background here. The Globe and Mail has the details of the ill-fated scheme:
He was seeking a $50-million investment from New York-based hedge fund giant Fortress Investments on behalf of an unnamed company, according to investment industry sources in Toronto and New York, who spoke with The Globe and Mail on condition that their names not be published. These sources said Mr. Dreier assured Fortress that Teachers was providing a guarantee on the company’s assets – a kind of insurance policy that would protect Fortress’s investment.
Fortress asked for proof of the guarantee agreement, the sources said.
It was then, according to the theory advanced by police and industry sources, that Mr. Dreier concocted a complex ruse to gain access to Teachers’ offices.
He arranged to meet with the pension fund on Tuesday afternoon – apparently to propose an unrelated deal. The pension fund wasn’t interested, and the meeting ended after about 15 minutes.
According to sources, Mr. Dreier, allegedly posing as Teachers’ senior legal counsel Michael Padfield, had arranged to meet a Fortress executive at the pension fund’s headquarters that afternoon to provide him the fake guarantee for the $50-million investment.
One source familiar with the matter said that after his brief meeting with Teachers, Mr. Dreier asked if he could use one of the fund’s small conference rooms while he was waiting for his private plane to prepare to take him back to New York.
He paced in the lobby for about an hour, the source said, until Howard Steinberg, a Canadian executive with Fortress, showed up for a meeting that he believed would be with Mr. Padfield of Teachers. Mr. Dreier then whisked him into one of the rooms.
It was then, according to industry and law-enforcement sources, that Mr. Dreier, pretending to be Mr. Padfield, presented him with a phony guarantee agreement.
Mr. Steinberg became suspicious, the sources said, and Mr. Dreier left the room, strolled to the third-floor elevator, and exited the building.
The receptionist immediately asked Mr. Steinberg what was going on.
“Was that Michael Padfield?’ he asked.
No, it wasn’t, she said.
A call went at once to police and Mr. Dreier was arrested at about 5:30 p.m.