Alleged NY Fraudster Could Be Freed on Bail

A high-profile New York lawyer indicted in a $400 million investment fraud can be freed on $10 million bond, under 24-hour house arrest with armed guards and electronic monitoring, a U.S. judge said on Thursday.

U.S. District Judge Jed Rakoff in Manhattan said in a written brief that a total of 10 conditions set for the release of the lawyer, Marc Dreier, "will be sufficient to reasonably assure the defendant's appearance in court as required."

An earlier set of conditions by another judge required Dreier to secure a $10 million bond with $10 million worth of property or cash, which Dreier's lawyer argued his client did not have the financial means to meet. Dreier's assets are frozen, and he has been jailed since his arrest on Dec. 7 last year—unlike Bernard Madoff, the more widely known accused swindler out on bail since Dec. 11. Authorities said Madoff confessed to running a $50 billion global fraud.

Dreier, a lawyer for 30 years and founder of a 250-member firm, was arrested on a charge in Canada, but granted bail by Canadian authorities. He was arrested upon his Dec. 7 return to the United States.

In arguments over Dreier's proposed release on bail in recent weeks, comparisons were made with Madoff, the 70-year-old investment manager who is under house arrest.

A U.S. grand jury indicted Dreier on Jan. 30, accusing him of securities fraud, conspiracy and wire fraud for lying to hedge funds and investment funds that he was selling notes on behalf of a New York developer and a pension fund in Canada.

He pleaded not guilty to the charges at a hearing on Monday.

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