Marc Dreier, the New York lawyer accused of cheating hedge funds, lost part of the $380 million that prosecutors say he stole in failed investments and used the rest to repay the funds, cover his firm’s expenses and buy property, he said. 2

Marc Dreier, the New York lawyer accused of cheating hedge funds, lost part of the $380 million that prosecutors say he stole in failed investments and used the rest to repay the funds, cover his firm’s expenses and buy property, he said.

Marc Dreier, the New York lawyer accused of cheating hedge funds, lost part of the $380 million that prosecutors say he stole in failed investments and used the rest to repay the funds, cover his firm’s expenses and buy property, he said.

Dreier, who is being held in jail on fraud charges, yesterday filed a new request for bail. As part of the request, Dreier detailed assets he owns including 150 pieces of artwork and numerous cars and homes. He and his lawyer, Gerald Shargel, also outlined how Dreier used the money the government says he stole.

Shargel said in a sworn declaration accompanying the filing that all of Dreier’s assets have been frozen by the government and that Dreier isn’t a risk to flee the country. “I currently have no money and no assets whatsoever,” Dreier wrote. “I have no money abroad.”

Dreier, 58, was arrested Dec. 7 on charges that he persuaded two unidentified hedge funds to give him more than $100 million by falsely claiming he was selling at a discount notes issued by New York developer Sheldon Solow. Prosecutors have since said that “very sophisticated investors” lost $380 million.

Prosecutors must respond to Dreier’s filing by Jan. 21 and a hearing is scheduled in Manhattan federal court for Jan. 22. Janice Oh, a spokeswoman for Acting U.S. Attorney Lev Dassin, declined to comment.

Dreier, a graduate of Harvard Law School and Yale College, faces as long as 20 years in prison for securities and wire fraud. He has yet to formally respond to the charges. Separately, he faces charges in Toronto where he was arrested for impersonating a lawyer at the Ontario Teachers Pension Plan.

Kosta Kovachev, a former broker, has been charged with helping Dreier dupe the hedge funds.

Shargel is seeking Dreier’s release on a $10 million bond that would be co-signed by Dreier’s son and mother. He also proposes that Dreier be subject to electronic monitoring and watched by security guards.

In his court papers, Shargel makes no mention of Bernard Madoff, who is free on $10 million bond and subject to similar bail conditions after being accused of masterminding a $50 billion Ponzi scheme. Two federal judges have upheld Madoff’s bail.

Shargel says in the new bail request that Dreier has met with the receiver for his law firm, Dreier LLP, and “fully identified the disposition of the funds” he is accused of stealing.

Dreier said in his declaration that he made interest and principal payments to the hedge funds; transferred money to his law firm’s accounts “to cover millions of dollars in deficits”; “invested and, for the most part, lost in the stock market”; and bought real estate, artwork and other property.

“The money at issue is in fact fully accounted for, and the government’s inference that there must be a ‘pile of money’ hidden somewhere is simply unsupported,” Shargel wrote.

Dreier said in his declaration that he “gave the receiver a detailed accounting of the disposition” of the funds “and answered every question the receiver had.”

Among the assets Dreier says he owned, and which are now frozen, are two yachts, several Waverunner watercraft, cars including an Aston Martin and two Mercedes Benz, real estate in Manhattan, Sag Harbor, and the British West Indies, and 150 pieces of artwork.

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