Marc Dreier’s Birthday Present Is A Big Box Of Bail

Hey everyone, it’s Marc Dreier’s birthday today! Happy birthday Marc Dreier! What did you get? Some Wii games? Jonas Brothers tickets? Bail? Well, one out of three ain’t bad!

Yes, for his 59th birthday Marc Dreier got what every near-sexegenarian wants, a night out of jail. But after pleading guilty to a $400m fraud yesterday, his freedom is going to be short-lived; everything’s currently pointing to him getting life. He’s already under house arrest, with electronic tags and armed guards. Maybe one dressed up as a clown to make the day extra-special.

Dreier’s fraud involved selling fictitious securities to hedge funds and individuals, some or all of whom were idiots: “at least one of the individual investors gave Dreier’s company $1 million without understanding the nature of the financial transaction”, according to the assistant attorney. Dreier then laundered the money through his law firm, and spent it on boats, beach houses, and all the usual conspicuous consumption trappings. ”I understood everything I was doing was illegal”, he said yesterday. 

He seems like a pretty rubbish fraudster. He did follow golden rule #1 of persuading people to part with their money, namely throwing parties with celebrities – it’s what Madoff, Nami, and countless other recent fraudsters have done to look legit. But then it looks like he just got the money and spent it, rather than starting to pay off his old investors with the money from newer clients, in the time-honoured Ponzi fashion. As well as the vanilla car/house/boat spending trajectory, he also went for some rather more fruity expenditure, like regular nights with prossies bought from frightening-looking Hollywood madam Jody “Babydol” Gibson (who, weirdly, is set to testify in the Phil Spector murder trial soon), and a piece of video art featuring Salma Hayek blaring from his wall. Apparently the calibre of whore wasn’t too good: “I was embarrassed for who he brought with him. I mean, she’s beautiful and tall and skinny, but stupid, just stupid. It was a little bit disappointing, frankly”, said one of his old friends.

There’s also a Hollywood-ready father-son story here too. Dreier wanted his son Spencer to spend some time with him over the summer, but instead of forging a bond through shared interests and mild banter, Dreier went down the classic bad parenting path of bribery – he offered his son $12.5m-worth of property to get him to tag along. “Fine, jeez”, was the alleged response. But this cynical parenting style reaped dividends, as when the Feds came knocking, Dreier Jr. was destroying his dad’s SIM cards, transferring property and keeping his yachts out of American waters. Attaboy! But now Dreier Sr. is undoing all that valuable bonding – he’s paying his food bills with his son’s bar mitzvah money. That kid is going to need so much therapy.

Posted by Ben Beaumont-Thomas in Hot Money | May 12, 2009 10:59AM |