The $750 Million Thief Storyville

You have this obsession with what happened in Toronto.

I was standing on cliff, in a sense,

and I had to somehow come up with 40 million very quickly.

I was contemplating, for the first time, the possibility of living life as a fugitive.

It's easy to say you would never cross the line,

but...the line is presented to very, very few people.

How many could say for sure that they would never do what I did

if they had the opportunity

and thought they wouldn't get caught?

I knew if I went back to New York without the 40 million,

all hell would break loose.

So I came up with the preposterous idea of going up to Toronto

and trying to impersonate this individual.

That's when I became completely desperate.

It was just the last act of a long series of charades

and it was by far the least clever of all the...

..of all the acts I did.

I finally was just completely overwhelmed

by the whole madness of the charade, and I went into their office...

-As Marc Dreier?

-Yeah, as Marc Dreier.

Yeah, they knew who I was, the pension fund knew who I was.

I had dealt with them. So I walked in, yeah, as Marc Dreier, sure.

And, uh... And they arrested me when I walked into their office.

-Well, at least the Mets are in first place, Bob.

-Seven in a row. Right?

If I have to go to prison today,

at least I got them into first place before I left.

I told my son I wasn't going to prison until the Mets were in first.

They'll stay there for a while, I imagine.

They're playing well now.

Let's talk about exactly what's going to happen this afternoon.

The judge is required, under a rule of criminal procedure, to ask you

a whole bunch of questions to make sure that the plea is voluntary.

You told me that the first question he was going to ask me

is if I've been drinking in the last 24 hours,

so even though I was very tempted, I have not been drinking in the last 24 hours.

Uh, he will spend a fair amount of time, even though you're a lawyer,

wanting to know if you understand what rights you're giving up.

Uh, the right to a trial -

I don't have to go through every detail -

but by pleading guilty, you're giving up all these rights.

So, he'll go over, you know, the question of whether you understand...

-The potential sentence.

-..the potential sentence.

If you add it all up, you need a calculator, it'll be 145 years.

It would be a good result if I would walk out the door

for a few more months until the sentencing.

Today, obviously, I'd like to be able to come back home.

If I get remanded,

you need to call my kids tonight.

Call Spencer and let him know what happened.

The news of the day isn't good.

The era of greed and irresponsibility on Wall Street

has led us to a perilous moment.

'There's no more effective acid against trust than fraud,

'especially fraud by top elites.'

'Through their greed, through their recklessness, and through

'their illegal behaviour,'

the so-called "masters of the universe",

the best and the brightest, have taken us to the edge.

'If it hadn't been for Bernie Madoff,

'the most famous white collar criminal in America right now would probably be Marc Dreier.'

Christ, it's like a feeding frenzy.

'Marc Dreier will plead guilty'

to all charges in the 700 million fraud case against him.

Authorities are accusing him

of masterminding a multi-million dollar fraud.

Prosecutors will ask for 145 years for Marc Dreier

who defrauded investors...

He was going to different hedge funds, selling these phoney notes

that he had concocted.

The founder of the law firm Dreier LLP sold more than

85 fake promissory notes from 2004 to 2008.

Marc Dreier, I mean, that is an incredible story.

He's accused of literally going into a client's office

and selling fake securities from their office, as representing them.

That takes bravado.

Mr Dreier, anything you want to say to the people who

think you're getting a soft deal here?

'I'm calling the case of the United States against Marc Dreier.'

'Good morning, your honour, John Streeter, for the government.'

'Gerald Shargel for Mr Dreier.'

-'Mr Streeter.'

-Thank you, your honour.

'I don't even think Mr Shargel would dispute

'that the evidence against his client is overwhelming.

'Mr Dreier is the Houdini of impersonation and false documents.

'He is a person of exceptional ingenuity,

'and exceptional resourcefulness.

'His life has completely unravelled.

'He has gone from being an extremely rich man to a person who has

'absolutely nothing and is facing the rest of his life in jail.'

Life just overwhelms you, sometimes.

I just, uh...lost my way.

And I lost my common sense, my judgment.

The main advantage I had was that I had the track record of 30 years

of...being a highly regarded lawyer in New York.

So, uh, I exploited that.

I had the opportunity to take a lot of money.

Foolishly, I didn't think of the consequences,

so I did it.

And, er, I'm certainly criminal by reason of having done that.

I engaged in crimes that hurt a lot of people -

people that I cared about, which is a very...contemptible thing.

This is how I'm going to work from now on. Ride this to the office.

Dreier is a really well-known New York person.

Marc does everything first class. Dreier is responsible for all of this.

Dreier seemingly had it all.

A Yale college and Harvard Law School education,

a 250-person law firm with his name alone on the door.

Marc is an inspiring leader

and his success truly motivates you as an attorney.

This is a lawyer who wanted to be around the rich and the famous,

and started trying to live in that world.

Flashy practice, hanging around with professional football players...

Marc Dreier, I think the world of him, I foresee

wonderful things in the next decade, for, uh,

for him to do great things, I really do.

I haven't been here in, like, ten days. How are you doing?

I think it's ten days. Feels like ten days.

-I'm been eating all day.

-I noticed.

So let's talk about this letter that you're working on.

If, at sentencing, the whole idea is for the judge to have as much

information as he can, about who this person is,

and why he did what he did, I just explain myself.

Obviously it was stupid, obviously it was irrational,

but what makes somebody do something like this?

I can only tell you this is what I was thinking at the time.

I'm not defending it, but...this was my state of mind.

Personally, I think one of the saddest parts of this entire case

is that there was no-one there to essentially

-take you by the shoulders and shake you...

-I mentioned that.

..and, and, say, "What the hell are you doing?

-"What are you doing, here?" You know?

-And that's really very true.

You know, I was going through a divorce. I felt very, very isolated.

I really didn't have any relationship with anybody, personal or professional...

that I could, that could sort of give me moral grounding.

-And, um...

-No checks, no balances.

-No checks, no balances.

So...are you frightened?

Uh, yeah, I'm frightened, um...

It's hard to...

you know, I guess, you don't know how frightened you're going to be,

I guess, until you actually start serving your sentence.

Uh, being away from my children is frightening to me

in the sense of not being there for them.

They won't to be able to come into my room each time something bothers them,

pick up the phone each time something bothers them,

and I'm not going to be able to celebrate with them.

I think even more than not being there when they're upset,

is not being able to celebrate when good things happen to them.

That frightens me.

It's be important to get you to a prison that's close to New York,

so the kids will be able to visit.

And, uh, we have to think about what prison we're going to be asking for.

You know, I think I...

..can and will deal with it.

HE LAUGHS

Be good.

People don't just engage in crimes because they wake up one day

and they find that they're prepared to be a criminal.

I spent 20 years, sort of, as a lawyer at a large firm,

you know, for the most part pushing around paper.

That wasn't very gratifying.

A lot of what you're doing is unrecognised.

You're getting paid reasonably well,

but you're certainly not getting paid as well as most clients,

and you feel that, you know, you're working very hard

and not achieving the level of financial success that you, you know, deserve.

That led me to want to create my own law firm.

For better or worse, I was very fearless.

I mean, I started the firm with no money,

and I just had...

I think it's that I just had a lot of confidence in myself going forward.

So I went in the fall of 1997 to 499 Park.

It was obviously a huge leap forward from the suite that I that had.

I was so enthralled by the space,

that I thought the space itself would give me real credibility

and I'd be able to then attract more lawyers.

I think I had one lawyer at the time.

I went into the landlord and I said I'd like to take the full floor -

20th floor - which is about 11,000 square feet.

I had to tell him I had no clients, I had no money,

I had no money in the bank, I had no receivables, I had no credit,

I had no references, I didn't even... I had nothing.

And he laughed at me.

And he said no.

As I was walking out of his office,

his assistant came in and said, "Marc, what are you doing here?"

And I hadn't seen...

This was a woman I had gone to high school with 30 years earlier.

And she brought me back into the office and she said to her boss,

she said, "George," she said, "You can't turn away Marc Dreier."

and he said, "Why not?" and she said,

"He was 'most likely to succeed' in high school,

"you can't turn him away."

And she convinced him to give me the space.

I thought that I would start a somewhat different business model.

Since I was going to be the only person putting money into the firm,

I would also be the person who ran the firm, and then in a sense it would be a dictatorship,

it would not be a democracy.

Ironically, that appealed to a lot of lawyers.

I was able to grow the firm still relatively modestly,

while still funding the firm through more or less conventional means,

either banks or lending institutions.

But there came a point where the only way to achieve real success,

to really enlarge the firm, was I had to take on more lawyers,

and I had to take on more space and I had to take on more personnel.

And if I was going to do that,

I needed substantially more funding than I had.

I had grown up thinking

that I was destined to achieve

a LOT of success, not modest success,

so I needed to feed that,

and that was sort of the...

er...

crossing the Rubicon, I guess, where I made the misguided decision

of funding the firm illegally

in order to achieve the growth that I wanted.

PHONE RINGS

Yeah.

Did you tell him that?

Where does it say there's no smoking in the house? Was it in the lease?

OK, well, you're just not going to do that.

So, uh, you're just not going to do that.

And, as you don't do that, you don't cooperate.

You are not going to do that. You paid for it

and you are entitled to some privacy.

Why don't I speak to the broker tomorrow? That'll help.

This is the usual kind of stuff, don't let him get to you,

but stand your ground.

As far as the smoking goes, this is not a public facility, this is a private home.

You're certainly allowed to smoke... not you, but if your friends

want to smoke in the house, they can smoke in the house.

If they open up windows or smoke outside...

But there was nothing about no smoking in the lease

and people are allowed to smoke in their homes.

He can't just come in after the lease is signed

and establish all kinds of rules that can interfere with you.

That's not how it's going to work. All right?

All right, so call me later if he comes by tonight,

otherwise I will call the broker and/or the owner in the morning

and see what we can do about it, OK? OK, bye.

That's my son.

He has a share house in the Hamptons in the summer.

This is his first day there so he is experiencing the usual problems

that everybody, I think, experiences, the first time they take a house in the summer.

It's what happens in the Hamptons, so...

so we'll have to take a stand with the owner.

I don't remember how the idea first occurred to me,

but it occurred to me that I could, uh...

I guess my thinking was it would be wonderful...

to borrow the money but I didn't have the credit to borrow the money,

so...

..so I guess the idea occurred to me

that I would try to borrow money with someone else's credit.

And it was nothing more imaginative than that.

Sheldon Solow was somebody

that I met maybe around 1998.

And Sheldon is a very successful real estate developer in New York.

He was an extraordinarily powerful guy in terms of wealth,

and property and clout,

and he gave me some work.

The fees that I obtained from doing work for him

was essential in launching the firm and growing the firm.

He never failed to remind me that he had helped me launch my business,

and that he wanted a lawyer who would be very, very aggressive

and would accommodate what he wanted.

We worked on some matters together where I was sanctioned,

uh, by the court, for being too aggressive on his behalf...

..and the court actually would levy fees against me or the firm.

He did not come to my defence,

he did not foot the bill for these sanctions,

he did not try to help me in rehabilitating my good name,

and I guess what I resented most

is that he absolutely didn't seem to care.

I think that's...accurate.

Why I chose to use him as the vehicle was because he was a person

who was known to have great wealth, he was somebody who was known

to be private and somebody who was known to be very credit-worthy.

But I do think, I guess, on a subconscious level

and a half-conscious level, I guess I did feel that...

he had betrayed me,

or he had...

..disappointed me.

Obviously, that doesn't justify what I did, but I guess...

I did not walk around feeling all the time,

"How could I be doing this to him?"

Hey, hey, don't go anywhere yet. Marc Dreier's up.

Come on, Marc.

Come on, come on! We want the million,

we want the million!

People say this is probably one of the best celebrity golf tournaments.

What do you mean "probably"? What do you mean "one of"?

Uh, I think people here probably feel we run a great tournament.

I'm very gratified when people say how much fun they had.

'My marriage had failed, and uh, I was disappointed in my career.

'I felt this compulsion to appear to be doing extremely well.

'I needed more recognition by others that I was doing great things.'

What's happening now is very surreal.

Now, I'm certainly viewed as a completely different person.

I'm seen as, I guess, a pariah.

I guess they call it a gilded cage.

But this is certainly an imprisonment.

The guards are here 24 hours a day. It's all been very civil.

I don't have the use of any cell phones, or internet,

or computers, or anything.

I have a landline that I can use.

Unfortunately, a typical day is pretty much like every day before and after.

Thus far, the only money for guards has come from my mother,

and a small extent from my sister.

And the only money for food that I've gotten has come from my son,

from his Bar Mitzvah money. Nobody's given me any money.

I've been entirely removed from interaction with...with everyone.

I, uh, I feel very much removed from, from the world.

Whereas before, almost everything that happened every day in the whole world

was of interest to me and affected me,

now, it's like, you know, I read the newspaper

but almost everything in the world is irrelevant to me.

I'm living a life now that is so different from anything

I ever could have imagined.

What enabled me to do what I did was the climate of...

..I won't say greed, but the climate of...uh, you know,

I guess, you know, a...

a strong appetite by the financial community

to make money quickly and in large amounts.

The stock market is in the midst of a powerful rally.

The Dow Jones industrial average closed at an all-time high.

They're still buying new homes at a record pace.

Profits are up, the stock market is up, employment is up.

The economy roars along at a pace that astonishes economists.

I, uh, approached a hedge fund with the idea,

would they want to lend money to a very credit-worthy client

on a very favourable interest rate.

A short-term loan, one-year loan.

I would present Mr Solow's business as the ostensible borrower.

It wasn't unusual that a real estate developer

would want to borrow funds,

so I was able to demonstrate, convince them that he had

new developments, overseas developments

that he wanted liquidity for.

That didn't seem odd.

But I didn't have his real financial statements,

so I invented financial statements.

I knew Mr Solow's accounting firm so I set up the financial statements

over the letterhead of his accounting firm.

And I knew enough about his business that

I could make the statements appear credible at least to an outsider that knew much less than I did.

I definitely saw it as a one-time misadventure,

I definitely saw it at the beginning as saying, "OK, if I could just get this money,

"I'm sure in a relatively short period of time

"I could invest in the firm,

"I could generate funds, and I could repay the debt,"

the so-called debt, and get myself out from under the...

under the illegality of it.

The law firm was draining off far more money than I anticipated it would...

and the debt was mounting.

If I had to achieve success by theft, certainly logically,

I should not have felt that good about myself.

I can't remember spending any time wrestling with that,

which underscores how desperate I felt.

It was very hard to talk about this with my family.

And, um, I don't want to get into any more of the particulars than I have.

-You know, with your mom...

-I'm not going to talk about anybody else in my family.

-Just, just, in terms of...

-I'm not going to talk about it.

-I'm saying, is...

-I'm not going to talk about it.

Cos we did do this before...

I'm not going to talk about my mother.

I love my mother very much and she's been hurt by this

and I don't want to talk any more about it.

TV: This is Jeopardy.

I should've been on Jeopardy.

The one-day champion.

2200 in one day. That's not good. One of the worst days ever.

Yep.

That day was the slower group.

TV PLAYS

Stonehenge.

-'Stonehenge.'

-'Yes.'

'If you're plagued by one of these on your back, you've got problems.'

Monkey!

I thought maybe a monkey, because, I don't know...

'On presentation to the Queen,

'address her formally as Your Majesty and subsequently...'

-Ma'am.

-No, can't be that.

Told you, ma'am.

I've met with the Queen many times.

You've met with the Queen?

Final jeopardy! I haven't missed a final jeopardy question in ten years.

Scarlet Letter!

Scarlet Letter, the Scarlet Letter!

My streak is intact.

One million consecutive Double Jeopardies, I've gotten.

-No. "The end of the novel..."

-Scarlet Letter.

They've got to have harder jeopardies,

-this is...

-Well, they say no-one's done it the last four days.

-Well, I haven't watched it the last four days.

-No, I'm saying,

-they don't know if you've...

-Look at this, I mean...

INDISTINCT

I should've... just never practised law,

I should've just gone on game shows.

Scarlet Letter....

She's the only smart one on the show.

Zero! Either they were stupid or they were chicken.

There wasn't a person that had brains and courage.

There have always been schemes like this, for hundreds of years,

as far as I can tell.

When times are good, and then they come to light when times are bad

and there's probably no reason to think that there won't be another round of these

as soon as there's some measure of financial recovery.

TV: 'What's wrong with us?

'I think there's a values crisis.

'You won't get to economic recovery without a moral recovery, as well.

'Where there is no moral framework, no ethical sensibility,

'the market ends up devouring all the other sectors, and then devours itself.'

Mr Madoff and myself and others who have been caught are only

a small fraction of those who engaged in this,

nobody caught any of us

in terms of policing. It's that the markets could no longer sustain

the free spending that engendered what we were doing.

It wasn't so much that I stole money to buy things.

It was more that I bought things so I could steal money.

I needed to create the impression that

I was very successful financially, to allow me to present myself

as the kind of person that people feel comfortable investing with.

Certainly I used some of the money that I stole

to buy extravagant things.

I purchased several Warhols.

The collection of Jackie O's which come in a group of four,

I paid about six million dollars for.

John Lennons, I paid together, I paid six million dollars for.

There was a Nureyev portrait that I paid two million dollars for.

Had a wonderful Rothko, which cost about five, six million dollars.

I had a Lichtenstein, some pieces by Damien Hirst.

Nice piece by John Baldessari.

It's easy to lose discipline

when you're spending money that's not yours.

I leveraged these things to the hill.

The artwork I used to collateralize a loan for about three times

the value of the artwork.

I was using these properties to enable me

in a very direct way, to sustain the fraud.

And it was the same with the charities.

What Marc has done over the last few years for the charity

and for this event, I couldn't think of anybody else

I could have who would have that kind of commitment.

So, I am grateful to have Dreier and Marc and his organisation,

his company behind this event and they've made it what it is.

I threw charitable events that were all for that same purpose.

To present myself in a way that I could attract more investors

to these bogus notes.

It really was an instrument in the whole scam.

We're very proud to be associated with these charities,

and we've had a great event so far.

Raising some good money for two good causes.

I don't know how to use this juicer.

I was trying to get the juice out of here.

How many people who are condemning what I did,

would know for sure they would never do anything like what I did

if they knew they wouldn't get caught?

Is what holds people back from doing things like this

their fundamental virtue, or is it the fear of getting caught?

I think in many people,

in the case of many people, it is fundamental virtue.

I applaud those people. But I think in many, many people,

it's either lack of opportunity, or fear of getting caught.

I sort of, for lack of a better word,

experimented with the idea on a smaller level,

I think for a million dollars.

I think I was surprised at how easily I was able to pull that off

and then I invented this 20 million dollar note with a hedge fund.

And that was in early 2004.

The key was that I had to hold myself out as the representative

for Mr Solow, so that any questions would be addressed to me

and not to his business or him directly.

I was, for all sense and purposes, a legal representative of Mr Solow,

so I was able to...

..convince the fund that I was authorised to do what I did.

And so they lent the money purportedly to him,

or to his business for one year.

A transaction was processed through my law firm's escrow account,

so money was wired in to my firm, ostensibly,

then I was passing the funds on to Mr Solow which I wasn't doing.

I was using those funds and paying the interest off quarterly,

ostensibly on his behalf.

Then, of course, that plan was fine until the loan matured.

As the year went on, it became apparent to me that I wouldn't

have the money at the end of the year to repay that note.

So, that led me, of course,

to duplicate that trick with other funds.

The domino effect was that I had to keep borrowing new money

to pay off old money.

Every week for years, I was involved in this process

of updating, inventing, sustaining the financial statements.

As things went along, there were maybe a dozen of these funds

that I had these transactions with,

so I was getting inquiries from a dozen different sources.

So in addition to running the firm and running my cases as a litigator,

I was almost always preoccupied with sustaining this charade.

What I did was deplorable

but, you know, people go to the movies all the time

and whether it's Ocean's 11 or whether it's Bonnie and Clyde,

or whether it's dozens and dozens of movies that romanticize

going in and robbing a bank

or taking money from some financial institution

that can so-called afford it,

the audience basically is cheering for the financial criminal.

There is some hypocrisy in rooting for people to get away with it.

And then taking a very different posture

when it happens in so-called real life.

My dog had nothing to do with it.

He was probably the only person talking sense to me every day.

There he goes.

He hates the rain, so he'll be charging back in here any moment.

I got so wrapped up I forgot to feed you.

I'm going to prison for a very long time,

so I don't have much, you know.

I'll obviously be upset no matter what the number is.

So 10, 12, 15, 20, 25. I mean, who knows how long I'll even live.

But the real impact of the sentence is if it's a very long sentence,

you are more likely to go to a harsher prison.

And so that's at least as much of the equation as the duration.

Do I sign the book? OK.

You've dealt with prisoners who've gotten more than 22 years,

and you've still been able to get them into low security?

Correct.

And you're optimistic that'll happen in this case?

I am optimistic. I think the one hedge to that would be

if the sentence is greater than 30 to 35 years.

I guess just generally,

reading what you wrote about low-security prisons,

it sounded a little more grim than the impression I had when we spoke.

Well, I don't want to whitewash it.

So when you say it's a cubicle, I take it, they're not bars.

No, it's a dormitory.

Some are up to 12 men.

And in that case, the room is going to be a little bigger.

-Still typically bunk beds?

-Correct.

I just have to figure out a way to sleep.

My biggest fear is having somebody who snores next to me.

-It's a chronic problem.

-Because that was the worst thing I...

You'll get earplugs, they're all over the institution.

How bad is the food? The food at the low security.

First of all, I thought you get a few choices.

You get a few choices, and it's cafeteria style.

-Like there's hotdogs, I can't eat.

-From what I understand,

it's all edible, you can consume a balanced diet.

It's not like I get there - hotdog, take it or leave it?

-There is some choice.

-You'll recognise it's entirely different.

You talked about job assignments.

Everybody has a job?

-You would absolutely have a job.

-Generally, how much of the day is...

..am I required to work?

Whatever the job entails.

You could do something that would last 45 minutes to an hour.

It could be something very menial.

What comes to mind for you really is first and foremost the law library.

-There is a lot of down time.

-A few hours a day.

I don't want to be on my hands and knees eight hours a day,

if I can avoid it, or in the kitchen eight hours a day.

They're not going to make you do anything that's physically arduous

that's going to be a problem.

You're going to find yourself doing something worthwhile.

These funds did look into my background,

they did look into my relationship with Mr Solow,

they did look into my credibility.

I wasn't just sort of a salesman who was peddling securities

or notes to a bunch of funds.

I sort of made them come to me, I never pushed this,

my style was to not seem overly interested.

I was accustomed to carrying myself with a feeling of success

because I had been successful.

From a very early age,

I was just really driven to be successful in school.

I was always President of the Student Council,

President of my class, I had a wide circle of friends.

Best Looking I didn't win, but I did win Most Likely To Succeed, yeah.

I grew up in a very normal upper middle class home on Long Island.

My father was an immigrant from Europe.

Came here during the beginning of World War II.

I have a sister who is three years older than me

and a brother who's six years younger than me.

We had a happy family life.

My father owned movie theatres

so I spent most of my childhood in the movie theatres.

That's where I would go every weekend,

sit in the front row and watch the movies

or go up to the projection booth and watch the movie, or sell popcorn.

I was fortunate that I didn't have to pay for school.

My parents paid for college and law school.

I went to college at Yale and law school at Harvard.

You know, you feel a little bit, when you go to those schools,

you go around feeling,

I won't say superior,

but you feel that maybe you're meant to succeed.

Like the world could be your oyster if you take advantage of it.

In '04, 5, 6 and 7, everybody who borrowed was willing to roll over.

They were one-year notes, so when it became due at the end of the year

they were willing to not demand the principal back

but to roll it over at a higher interest rate.

But starting in '07 and mainly in '08,

several of the funds, which had lent a lot of money,

simply weren't willing to roll over and wanted to be paid back.

-NEWSREADER:

-Credit markets are frozen.

The United States economy is in the midst of a severe downturn.

Eight million American families are expected to lose their homes.

The whole process became more difficult as time went on.

Some of the funds wanted to have contact with representatives

either of the purported lender or the purported accounting firm.

And so, on some occasions, I, actually, over the phone,

would impersonate such people.

And on a couple of occasions, it was actually done in person.

At that point it was almost as much as being afraid of going backwards.

I was hurtling forward and feeling that I just had to sustain.

I had to grow the firm.

It was terribly important to me that I have my name on a law firm.

I couldn't face the idea of it all falling apart on me.

I couldn't tolerate the idea people that I thought were less talented

had more status, recognition or more wealth.

If this didn't succeed, there was nothing left.

Is he offensive? He gets the weed smoking for the...

THEY LAUGH

He failed the marijuana test and now he's hitting home runs every day.

And marijuana apparently is not against Major League rules.

And he's hitting home runs every day and he flunked a marijuana test.

So now the whole team will probably start smoking marijuana now.

He hardly plays any of the year.

He's injured for a third of it and suspended for a third of it,

so only plays a third of the year.

I checked out, in the prisons I can go to,

I checked out whether they get Met games.

And one does and one doesn't,

so I'm going to try to go to the one that does.

The federal prison in New Jersey gets Met games.

Pennsylvania doesn't.

-What do they get in Pennsylvania?

-They get the Philly games.

And that would be painful to watch Philly games.

What is going on?

All the phone calls are monitored.

If you are on the phone longer than 50 minutes, it's cut off.

And you only have 300 minutes a month.

The hard part about phone calls is

you don't want to use up your minutes.

If we spend the first nine minutes talking about fantasy baseball,

there's not much time left and that's what we end up doing.

In the old days, before email, texting, Twittering, phonebook,

Facebook, MySpace, texting, yapping, whatever they do,

people wrote letters.

-I've written a letter.

-When have you written a letter?

A few months ago I got a letter from myself.

You got a letter from yourself? That's typical of this age.

-People write letters to themselves.

-No, no.

In high school, before you graduate they make you write a letter.

So you did it for homework? I'm talking about at your own volition.

They have to teach you in high school how to write a letter

because nobody ever heard of letters.

You can't send it by email.

You actually have to write it out,

put it in an envelope, and a stamp and send it.

I'll write letters, but...

We're obviously going to try to see each other as often as we can.

And speak on the phone and write back and forth to each other

and do the best we can.

Obviously it's not good.

What can you do?

-He was good last year.

-He's been good every year.

The guy's got a great talent.

-But he never plays.

-But his insanity finally caught up with him.

'Absolutely every day, I'd ride up in the elevator,

'and every day, in the 30 seconds it took me to get to my office,

'I had two very clear mixed feelings.

'On the one hand, I was, you know, that I was a sham,

'and that if people only knew what I was doing, it would be horrible,

'and felt truly very disgusted with myself.

'But at the same time, I was going to work and I saw there were

'hundreds of people employed at the firm who seemed very happy.

'I was supporting financially a lot of people and their families.'

'I won't say that I felt like, you know, Robin Hood,

but there was a sense of real gratification

from at least having the appearance of running a large business

where people for the most part seemed to be very, very pleased.

LAUGHTER AND CHATTER

Sal LaMonica's going to like this.

When there's a big football hole in the window!

DREIER LAUGHS

We agree that 12 years is a rational sentence,

but the government's asking for 145 years.

Look, all these cases involve many more victims than me.

Obviously Madoff did, but even the stock cases did.

They said I had 26 victims. I'm not minimising the 26 victims.

I think we should make a great deal more of the fact,

not only that I only had 26 victims, but that,

if it's said in the right way, not to minimise these people too,

but this is not a case where widows and orphans lost their money,

lost their life savings.

People were losing their jobs...

People lost their jobs, I understand yes.

And we don't minimise that.

You know what, Marc? To stand before court on the day of sentencing,

and say "Hey, there were only 26 victims here."

These are arguments the judge is expecting.

These are the arguments, "Well, it was only a hedge fund,"

and we make those arguments that it was only a hedge fund,

like there weren't real people that invested in the hedge fund.

There's no right way to say that there were only 26 victims.

Not in writing, not orally, there's just no right way to say that.

Jerry and I see the same kind of back-and-forth

at every sentencing where the defendant tries

or ends up minimising himself a little bit.

The government has an opening and they stand up for 10 minutes

and hammer on bad conduct, minimization, everything,

I feel like the way we... Jerry wrote it,

we're kind of pulling this thing. We're saying,

"Look, everything that you're going to say he did bad, he did bad."

You're not going to get up and tell the judge anything new,

John Streeter, that we're not telling him up front.

-I know.

-But here's why...

-The weakness in your approach...

There's no weakness in his approach.

You are minimising what you're doing, what you've done.

But you have to. No matter what we say, they're going to go in,

and the judge is going to agree, that I'm the devil.

And you're saying we shouldn't counter that.

-I can't agree with that.

-Here's the problem, Here's the problem.

You know, from at least two appearances in court,

that Judge Rakoff gratuitously said, uh, it was gratuitous,

but nevertheless, he said that he viewed this

as one of the most audacious frauds in history.

We don't have facts that will change his mind, with all respect.

Yes, mine is one of the most audacious crimes in history,

but obviously all those other 400 million,

by definition, were very audacious.

I think there are two things, this is reading tea leaves,

but one reason that led the judge to say that was not the amount of money

but the manner in which the fraud was committed.

'In October '08, one of the hedge funds wanted to meet

'with a representative of Mr Solow's office

'to be comfortable about the financial statements I had provided.

'The fund wouldn't release the money

'unless they got answers to some questions from Mr Solow's people.

'So I staged a sort of impersonation at Mr Solow's office.

'I told another person I would pay him a fee to impersonate somebody.'

We went to Solow's offices and met with people there

as I did the normal course

and then I just stayed behind to use the conference room.

And then had the hedge fund people join me in the conference room.

We pretended to be answering their questions

as if we were speaking for Mr Solow.

The fund was satisfied

and persuaded that everything was on the up-and-up, I guess.

The morality of it did bother me but it didn't stop me.

It's hard to explain that.

Is the measure of being a bad person how much you stole?

I think the great majority of us have transgressions,

financial, moral transgressions all the time.

So what we're saying is that it's the amount of money you stole

that defines how bad you are?

Maybe, but once you make the decision

you're going to do something dishonest,

am I so much worse than a shoplifter

or somebody who cheats on their tax return

simply because I had the opportunity?

I don't buy into that entirely.

I think how much you steal is much more a factor of opportunity

than by how bad you are.

So your argument is that you weren't so bad?

I don't, I don't get it. On one hand you're saying

you could make that point at the beginning,

that we're not contesting the facts here

or that the facts are particularly egregious,

but what you want to go on to say, after that, is that what you did,

in the whole spectrum of what others have done ain't that bad.

And I think if you do that, if you do that, you're going to be...

-You're not listening.

-I'm listening...

I didn't say it's not that bad,

you're the one who's emphasising the law.

You don't have to use words. Bad, good, anything.

Here are other cases, here are the facts of those cases,

here are the sentences of those cases, OK?

Based on those cases we think we fit into 12 years.

We don't have to say I'm a good guy, I'm a bad guy.

If you don't tell him anything about

my background, my case, my motivation,

the number of my victims, how much people lost,

and if you don't tell him about other cases, he's going to say,

"The government stood up and said he's the devil,

"I've never heard anything else from anybody other than...

"He gets the worst." I don't understand it.

This is the first time you're before him on a sentencing,

and it's not my first time, I've been there,

I don't want you... I know what you anticipate.

I anticipate he's going to slaughter me.

But if you get up there and say it's only 400 million,

compared to others who have stolen more,

you're going down a bad road with this judge.

I'm saying my case is like these others.

Here's another case of 400 million, he got 12 years.

He could be a devil. OK, I'm the same devil.

Well, we could say it in a way like, um,

the sentence that we're proposing below the guidelines range

is not unprecedented in cases throughout the country.

And we could cite a few, something like that.

Exactly. We don't have to compare myself...

We can just give a thumbnail sketch of those cases.

To show them it's not...

Give a thumbnail sketch of those cases.

Don't say I'm better than them.

Say what we're proposing is not that outlandish, not unprecedented.

You said it better than I did. That's my point.

You've got to give him some reference point

to show that what you're asking him to do is not off the wall.

-We always work these things out.

-We always put our heads together...

We never have to even imply I'm a good guy.

-I think you're not a bad guy but I'm not sentencing you.

-Yeah.

I'm not trying to hammer you with this.

I just think that it enhances the argument you're making.

-Mmm-hmm, OK, we'll do it.

-If it's done the right way.

We usually do it the right way. That's why you're sitting here now.

Yes.

Um, all right, uh...

..as far as we know, Madoff's going ahead on Monday, I guess.

Yeah, I think that's definite now, it's written in stone.

There are obviously a number of points

that distinguish Madoff from your case.

And, um, I'm looking forward to hearing what Judge Chin,

the sentencing judge in Madoff's case, has to say on Monday

because um, he essentially may give us points

from which you will be favourably compared

at the time of your sentence.

Intuitively, I think that, uh,

we'll gain a benefit from that sentencing proceeding.

That's why, I always wanted to be sentenced after him,

we talked about that months ago. That's why it turned out this way.

We'll see what happens on Monday.

'In October of '08 I got a call from an attorney who said

'he was counsel for the accounting firm

'whose name I had falsified the financial statements for Mr Solow.

'At the same time he had Mr Solow on the phone himself.'

There had been one or two occasions in the past

where a hedge fund had called either Mr Solow's office directly

or somebody directly, and I had gotten a call from somebody,

"What's this all about?" And I had been able to finesse it

because I had...I don't know, I was able to say,

"I'll get to the bottom of this," and I got back to them

with some explanation that seemed to satisfy them

that it was all a misunderstanding and that was the end of it.

This time was much more...I knew it would be much more difficult

because several people were involved at the highest level.

But I said the same thing, I said,

"I don't know what this is about.

"I'll look into it and get back to you."

But I was quite certain that, uh...

..that there was probably no way out.

'And at the same time, I had trips scheduled to Dubai

about the prospect of doing business or even setting up an office.

So I can remember very clearly in the first week of November

that I was sitting in Dubai fielding these phone calls.

And...

I can remember...

..contemplating the possibility of staying in Dubai.

'Dubai is a country with no extradition treaties.

'I had over 100 million in the bank. Could have stayed in Dubai.'

So I was a little distracted by that

while I was having meetings all day with prospective clients

knowing that...

I was likely to be arrested when I returned to New York.

But I decided not to...

I decided not to stay there,

I guess, primarily because I decided

that I just couldn't live a life apart from my kids

and I guess I still held out the hope

that somehow some way I could talk my way out of this.

TV BLARES

What's that on the table?

I made you Nova and tuna,

-like nobody in the world can make it.

-That's good.

The best Nova...

I don't want to know anything about it.

In terms of the details, it's not going to serve me anything.

Basically there was some financial wrongdoing

and it shouldn't have been done.

And, uh, that's basically the extent of it.

I guess you were saying, lessons and learning things,

I guess that, uh...

..that uh, even something so good

like what he was trying to build,

I guess sometimes the means don't justify the ends.

And that, uh, you have to look at the bigger picture

and understand the consequences of what you're doing.

Instead of muscling it through, if you bring it all the way back,

and you turn your hips then fly everything open...

That's what they do, watch. You've got to turn your hips on your serve.

Mom would probably be good to play with now.

You should hit some balls with her.

But you gotta play a little bit.

I don't think the worst moment has happened yet.

The worst moment will be, uh, when,

I guess, when this is all over and done with

and uh, we have less time together.

I don't think the worst part has happened yet.

I've never been to New York for July 4th.

And every July 4th, they've had fireworks on the East River.

This is the first year in my life I'll be in New York on July 4th,

and they moved the fireworks to the Hudson.

So I would have had a perfect, perfect, perfect view

of the fireworks on the East River, and now...

You'll probably still be able to see them down by Chelsea Piers.

Maybe you can see them.

You like to pull out the insides of the bagel.

I don't know, did you put this in the toaster?

Yeah. It's perfect. It's toasty.

Well, breakfast at Wimbledon.

Bob, I gotta get out.

So call me when you get there, all right?

Have fun. Have a good time, OK?

-Have fun.

-Yep.

You got... He's got his phone? You got your phone?

-Spence?

-What?

-You have your phone?

-Yeah.

I did this at a time when I was extremely isolated.

I didn't have a friend or a business colleague

or anybody that I was sharing this with.

I wasn't seeing a therapist.

I think I felt quite desperate to feel better about myself,

that time was sort of running out,

that my career had not been what I'd hoped it would be.

30 years into my career, if this firm was going to fail,

there was no place for me to go.

You know, I guess, um...

if my personal life had been more gratifying

I probably would have felt less of a need to...

to um...

..reach for something else.

-RADIO:

-'Good morning, everyone.

'Bernard Madoff has just been sentenced to serve

'a maximum 150 years in prison.

'Meanwhile, Madoff's lawyers said 12 years was more appropriate.'

TV: 'Bernie Madoff, sentenced to life behind bars.'

'150 years which is what prosecutors were asking.'

'2009 could go down in history as the year of the Ponzi Scheme.

'The disgraced Bernie Madoff gets 150 years.

'Prosecutors will ask for 145 years for Marc Dreier

'who defrauded investors out of a mere 400 million.

'Are the feds doing themselves a disservice though,

'asking for hundreds of years?

'Or should we throw them all in jail and throw away the key?'

It's painful for me to talk to you about this,

and I don't get any relief from talking about this.

Each time I talk about it, it's a reminder of how much I've hurt my children,

and how foolish I was, and how could I...

Just to hear the words sounds like I'm talking about somebody else.

It doesn't make me feel better.

It sounds like when I tell you what I did,

it sounds like I'm talking about somebody else and I'm saying

"How could anybody, especially me,

"how could anybody have been this foolish

"and done this to themselves?"

Coming back to the US in the middle of November, a second fund,

a larger fund, it became apparent to me had discovered the fraud.

Again, by fortuity, they had...

I had set up one of these phoney email accounts,

and...apparently...

if someone sent a message to that account it would actually come to me.

So I'd be able to deal with it.

But the guy from the fund evidently punched in the email address

with one wrong letter.

And so it bounced back to him.

So I guess then he called Mr Solow's office directly

to say is there another email address I can use?

If he had not punched it in with the wrong letter that probably never would have happened.

This hedge fund person called me and said

"We think this whole thing's a fraud, we want our money back.

And I did give them their money back the next day.

I said, "It wasn't fraud but if you're unhappy, here's your money."

I had gone from having 100 million two weeks earlier

to having not only nothing, but having had to invade

an escrow account of a client for about 40 million.

In order to pay off that fund, I had taken the money

from a client's escrow account at the firm.

So then I had to pay back that money to the escrow account.

And that money was becoming due final, final, final day

first or second day of December.

And I had to return the money to the escrow account

because that client was withdrawing the money from the escrow account

on that day.

So that's when I became completely desperate and had to somehow borrow

40 million to restore the money to that escrow account.

I remember spending Thanksgiving with my family

knowing that I would likely be arrested shortly after that.

That was painful. I didn't talk to them about it

but I think they saw that I was stressed.

I could've gone to... I had my boat. It's a fast boat.

I could've gone to Venezuela, I could have gone anywhere.

But I decided not to.

I knew that I had to somehow come up with 40 million very quickly.

I tried to place bogus loans to some of the hedge funds

that I had done that with before and couldn't do it.

They didn't want to extend any more credit

to the same so-called borrower which was Mr Solow.

So I convinced this fund to do a similar Solow-type loan

but to use a different entity that I had a relationship with

as the so-called borrower.

There was a pension fund in Toronto. Ontario teachers' pension fund.

It's a very, very large pension fund.

Probably the largest, maybe in the world.

And once before when I was unable to use Mr Solow as a credit,

I had used them as a credit on a smaller scale and it had worked.

So I tried that again.

So we did all the paperwork.

They told me that they would lend the 40 million,

so there was a period there for a day or two

at the very end of November

where I thought that I'd actually be able to do this.

What actually went wrong in Toronto?

People are making such a big deal about Toronto.

The reason I got caught had nothing to do with Toronto.

I got caught because the hedge fund said that they wanted

the papers signed in person.

So I came up with the preposterous idea of going up to Toronto

and trying to impersonate the person who would be expected

to sign the document.

I got into the pension fund because I knew people in the office.

I got the business card of the fellow whose name I would forge

and I asked if I could use the conference room

to make some phone calls.

And that's where I was going to meet the representative of the hedge fund.

I guess, the gods wanted to just toy with me a little bit.

The hedge fund guy was literally three hours late.

So I was sitting there for three hours thinking

"This is the stupidest thing I've ever done in my life."

He would call every hour saying, "I'll be there, I'll be there."

I knew that something was wrong,

so I had every opportunity for three hours to leave that office...

..but I knew that if I went back to New York without the 40 million

that the...

all hell would break loose with that client.

So, you know, just out of a completely irrational

and desperate act, I waited there, the guy came,

I forged the signature, I could tell that the guy was very suspicious.

I left and went to the airport and I got a call on my cellphone

from the hedge fund that something was wrong,

that they weren't satisfied with the bona-fide of the signature.

I guess the fellow from the hedge fund had asked the receptionist

if I really was the person who I purported to be.

Even though the receptionist didn't really know what my real name was,

she knew that I wasn't the person that I purported to be.

The head of the pension fund, or the head lawyer, I spoke with him on the phone.

He said, "Look, something's very fishy here."

And so then again I had the decision of getting on the plane or not...

..and I made the completely irrational decision, I suppose.

I went back to the pension fund to try to calm them down.

I'm saying, you know, "these guys will probably arrest me when I get there."

But I thought if I went back to the office of the pension fund,

and tried to explain all this,

that I could somehow talk my way out of it.

And they arrested me when I walked into their office.

And uh...

..that's the end of my freedom.

I've never had a day of freedom since.

That was, I think, December 2nd.

My parents had always urged me, you know,

to try and have a proportionate life

and not to measure success in terms of accomplishments or money.

They always told me that but I didn't listen.

My father died three years ago.

Just a year or two before he died he seemed to realise that I was placing importance on the wrong things

and he cautioned me to watch myself and I didn't listen.

And I guess now I'm telling my children.

Who knows if they'll listen.

You had asked me earlier whether the judge...

whether I thought this was a good judge.

All you can ask for is somebody who is dedicated and smart

and he has a reputation of being one of the most capable judges

and he's sort of an independent thinker he makes decisions based on

what he believes rather than on what other people are telling him

is the right thing to do.

Hopefully, he'll give a sentence based on his careful consideration

of what makes sense, not just following, you know, the guidelines.

I guess we'll see on Monday.

But he's a very respected judge, and a very smart judge.

I hope he's...

You know, unfortunately, there's a lot with...

there's a lot of this going on now, you know, I'm not the only case

and so it's the sentiment...

And hopefully not but maybe judges can get caught up in the idea

that there's a lot of this going on

and everybody should be treated the same.

I think every case is different

and hopefully, in my case, there's some factors that would...

that would result in less of a sentence than otherwise.

-Well, that's the case, it sounds like.

-We'll see.

-RADIO:

-'It's sentencing day for a prominent lawyer

'who defrauded hedge funds out of more than 400 million.

'The attorney, Marc Dreier, faces up to 145 years in prison

'when he goes up before a judge in Manhattan Federal Court

'at five o'clock today.'

Everyone has to be out of the apartment tonight.

We're moving things out of the apartment today.

I don't know exactly when it has to be finished but it has to be finished today.

I'm getting ready to go to jail, that's what I'm doing.

At 11.30, please listen up, we're going to sell Marc Dreier's office.

The computers, we've told you, they pulled the hard drives,

there was sensitive information on them that the Government retained.

You also have to mark the boxes.

I did a lot of...

you know, good things over the course of years

which are obviously all overshadowed by the crime I engaged in.

OK, now we have the paper shredder. If this paper shredder could talk!

How much do I hear for this paper shredder?

50, you want to bid? 55? 55?

There's no way to put into words... you know, how much it saddens me

to have inflicted this on my children.

This great guilt at not providing for my kids financially.

And of course there's...

You know there's...

They have my name which...

I went from being a person who had a good name

to a person who has a bad name.

And they're saddled with that.

I don't resist the punishment

because that's the only way I have of feeling that I'm doing anything

to atone for what I did.

Of course, I don't want to spend the rest of my life in prison.

This was Marc Dreier's desk.

I hate to tell you what this cost. Over 10,000.

1,000 open it up, start it off at a 500 bid.

500 bid open it up now. 500 bid.

Last chance, congratulations, 500!

I'm confident that the sentence will not be 145 years

as the government requests.

I don't think for a moment that it will be anything like that,

Do I go down there with feelings of trepidation? Absolutely.

Do I go down there understanding that it could be a disaster?

Absolutely, but I just hope that reason will prevail.

This is the saddest thing. I've had this dog for seven years.

And I have to say goodbye to him today.

Because him, I'll never see again. So, he's the one... My best friend.

"Dear Judge Rakoff, please consider this letter in connection

"with my sentencing on July 13th, 2009.

"I have requested that my attorneys file this as an open letter

"in the hope that it may do some good as a warning

"to others not to follow in my path.

"I know, of course, that no words can diminish the harm

"I have caused to so many people.

"I have betrayed the people I care about most,

"and I suffer everyday from the shame and regret with which I will always have to live.

"I expect and deserve a significant prison sentence.

"I've lost my past and my future. I've lost everything a man can lose.

"All that I have left in my life is the prospect

"of still sharing in my children's lives, both while I am in prison

"and, I pray, for some time thereafter.

"I don't know what gives some men the strength of character

"to lead virtuous lives for all of their lives, and what causes others,

"such as myself, to lose their way.

"There is no excuse for what I have done.

"I will try to learn from this and hopefully others will as well."

-I have nothing further, your honour.

-Thank you, Mr Shargel.

Mr Dreier is not going to get much sympathy from this court.

This is a huge fraud but he is no Mr Madoff.

There may be defendants like murderers who are beyond redemption

but I don't feel that one can say that about Mr Dreier.

There ought to be the possibility that he could serve his sentence

and still, albeit as a senior citizen, have some time with his children.

The defendant is sentenced to 20 years' imprisonment.

Your honour, one more thing.

I would ask that you recommend FCI federal prison facility

at Allenwood.

It's near New York and it'll give Mr Dreier the opportunity

to be near his family, his children.

I will so recommend.

At this time, the marshals may take Mr Dreier.

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