All language subtitles for American Greed s05e12 Hedge Fund Imposter

In this episode of American Greed, Mark
Dreyer, high -powered lawyer.

You can smell the money, and that's why
the clients come here.

Bon vivant.

When Mark stepped into a party, Mark was
there to party.

Con man.

You have a guy who's actually pretending
to be other people.

He steals more than $700 million from
hedge funds.

They were vast pots.

Of money with billions and millions, you
know, overflowing the side.

Because that's where the money is.

This was a man who had always felt
deeply empowered that this type of

was his birthright because he was so
smart.

New York, New York, December 2008.

Though the financial markets are in
freefall, super lawyer Mark Dreyer

to be floating above it all.

He's the sole owner of Dreyer LLP, a 500
-person law firm with offices on Park

Avenue.

He has yachts, priceless art, beach
homes.

This lavish lifestyle that he embraced
was part of his way of trying to

new clientele to his law firm, but
evidently that wasn't enough.

On December 2nd, the news ripples
through the highest levels of New York's

community.

Mark Dreyer has been arrested in Toronto
for impersonating a client and later

charged with selling $700 million worth
of phony notes.

He is a thief.

He's a high -class thief, well
-educated, one that put forward a very

front. But it all turns out he wasn't.

Mark Dreyer's story begins just 20 miles
from midtown Manhattan in the Long

Island community known as Five Towns.

It was not the glitziest place in the
world, but the kids were all very well

educated. It was sort of a new frontier,
Kennedy generation, we're going to grow

up and change the world kind of
existence for him.

Kenneth Gross goes to high school with
Mark Dreyer.

Mark was the big man on campus. He was
the president of the student council,

voted most likely to succeed. He was
handsome. He dated the prettiest girl

was smart and had...

really the world on its platter.

From Lawrence High School, Dreyer goes
off to Yale University and then Harvard

Law.

After graduation, Dreyer joins Rosenman
and Collin, where he's known as a tough

and aggressive litigator.

He had a brilliant career, educated at
Harvard, educated at Yale, and was

very highly regarded. I remember one
appellate division judge telling me that

was perhaps the finest appellate lawyer
that ever appeared in front of him.

After several years of the big law firm
grind, it's apparent that Dreyer is

unsatisfied.

There are a couple things you can do
when you're a young lawyer in New York.

can either try and make partner or you
can try and branch off and start your

business. And it became clear after a
while that Mark Jarre was going to be

of those lawyers who was going to go off
to lead his own operation one day. In

fact, he wanted it so badly that one
friend I talked to told me that he was

always well -liked but not necessarily
trusted, that he liked being admired

than he actually liked being liked.

Around 1996,

Dreyer goes out on his own and quickly
gains a very important client.

Billionaire real estate developer
Sheldon Solo.

The son of a Brooklyn bricklayer, Solo
works his way up as a midtown developer.

In 1972, he builds his magnum opus.

His big signature building where he has
an office is the sloped building at 9

West 57th Street, which has the big
orange number 9 outside with huge

Park views from his offices.

Solo, in addition to being a
billionaire, has a reputation for being

In Dreyer's eyes, he's the perfect
client.

He and Mark Dreyer were sort of kindred
spirits. They both were aggressive.

Sheldon Solo loved frivolous lawsuits
almost as much as Mark Dreyer did.

And once they got together, the lawsuits
practically never stopped flying.

In one notorious case, Sheldon Solo
wants to buy a beach house that's for

in the Hamptons. There's one problem.

Another man has first dibs on the sale.
That doesn't stop Dreyer from filing

suit, saying the house should really go
to his client.

He was one of the great spinners of BS
in midtown Manhattan. He could

sit there and tell you, no.

John F. Kennedy was killed by aliens
from Pluto.

Here's how they did it. And at the end,
you know it's BS, but he

has almost made you believe it. And that
was his genius, if he had one, in the

courtroom, that he could take these
ostensibly frivolous cases and almost

them, but he rarely did in the end.

In the Hamptons Beach House case, Solo
and Dreyer keep losing and appealing.

Losing and appealing.

They lose a dozen lawsuits over the next
ten years.

The federal judge, who ultimately
dismisses the case with prejudice, says

Solo's company has had so many bites at
the apple, it has swallowed the core.

But the point here was to keep the money
flowing from Solo and to sustain his

law firm.

and to continue to have a high profile
in the legal world, which is what he

wanted.

Being king of the frivolous lawsuit has
made Mark Dreyer at least $6 million.

But there's still annoying
dissatisfaction at the heart of Dreyer,

tells writer Brian Burrow in a Vanity
Fair profile.

He tells this amazing story of an
epiphany he had.

On the beach at West Hampton out on
Eastern Long Island where all the

people live.

He had a house out there, but it was
inland and he'd always wanted a beach

house. And he was on a long walk on the
beach and he walked up to this mansion

and felt in his heart that he wanted one
too. Wanted one on the water.

And for a certain level of New Yorker,
the Hamptons home is one of the ways.

a certain type of New Yorker measures
themselves.

And Dreyer says right then and there he
made two decisions.

He was going to have a house on the
beach, and he was going to do it by

dramatically expanding his law firm.

The problem, of course, is he didn't
have the money to do it either.

After this aha moment, Dreyer comes up
with a new model for a law firm.

Dreyer LLP, he'll call it.

And it will be like no other firm.

Well, most law firms are going to be
sort of a trickle -down philosophy. So

the top are the partners, and the
partners make the money, and that

down to the associates who help those
partners make the money.

But Dreyer was different.

Dreyer was willing to reward anybody.

If you brought in business, you were
going to get a piece of the action.

Mark Dreyer will be the sole owner of
Dreyer LLP.

The other lawyers he calls partners
won't actually have any equity.

What he offers instead is a generous
salary, commissions on new business, and

freedom from the headaches of running a
law firm.

But there's a catch.

The only person who had control of the
finances was Mark Dreyer himself.

He had control of the finances, he had
control of the books, and he had insight

into every deal that was going on. So in
some sense, it was a monarchy.

It's good to be king.

But Dreyer's law firm expansion will
cost upwards of $10 million.

This was a guy who didn't have a
fraction of that.

And so he thought and thought and
thought, how do I do this?

And the answer he ultimately came up
with was, I'll steal the money. And

what he did.

If you looked around in 2004, the
obvious place to get money was hedge

They were enormous. They were vast pots
of money with billions and millions, you

know, overflowing the side.

Somehow he had to get some of the hedge
fund money. The only thing he could do

is sell them something.

But sell them what?

Dreyer comes up with a plan to sell
notes, IOUs, to hedge funds.

But who will be the issuer of these
notes?

He decides Sheldon Solo, one of his best
clients and a billionaire developer,

will create the perfect cover story.

He actually had worked for Solo Realty
for a number of years. He was able to

pull on the experience that he had had
with Solo to present himself as a

representative of that firm in offering
these fake promissory notes.

In 2002, Dreyer puts his plan into
action.

He fakes a note issued by Solo Realty
for $20 million.

When it's finished, Dreyer is confident
he can sell the note to a hedge fund.

It was easy, he said. He found a big
hedge fund in Connecticut, explained to

them that Mr. Solo was trying to raise
money for an expansion.

Not a lot of questions were asked.

You know, papers were signed. And like
that, he walks away with $20 million.

Solo, of course, knows nothing of the
note.

The $20 million goes straight into
Dreyer LLP for office space and the

top lawyers.

Dreyer tells himself that that is a one
-time deal.

But of course, if you've ever read any
story about any embezzler or any

ostensibly lawful person who engages in
fraud, once is never enough.

Over the next two years, Dreyer issues
$200 million worth of notes, selling

to hedge funds in Manhattan and
Connecticut.

What he would do is he would set up fake
email addresses. He would send notes on

fake letterhead, letterhead that was
allegedly from the auditor of Solo

So he set up basically a whole scam.
Everything was fake, the email

the stationery, and even Dreyer himself.

Indeed. Dreyer's law firm is a Potemkin
village designed to fool the whole world

into thinking he's a big shot.

He opens offices in New York at 499 Park
Avenue, one of the premier addresses

right on the corner of 59th Street and
Park Avenue. He fills the office with

kinds of artwork from, you know, Andy
Warhol.

Former associate Michael Patrick
remembers a conversation he has with one

Dreyer's partners.

We're in this conference room and he
looks around and he goes, yeah, look at

this. Gorgeous furniture.

Look at the flat screen TVs on the wall.
Look at that lobby. There's no other

firm like it.

Gorgeous. You can smell the money.

And that's why the clients come here.

The flowers that he had, he had flowers
that cost $9 ,000 a month. I'm not

exaggerating. I said, Mark, unless these
flowers are made of pure gold, you're

getting ripped off.

And as for the buyers of Dreyer's notes,
the hedge funds, They're not asking too

many questions.

One thing Mark Dreyer could always do,
it's been a story, a believable story.

And that's what he did for these hedge
funds. And the fact was, these people,

they had more money than God. They had
more money, literally, than they knew

what to do with. They were looking for
anything to invest in. I mean, a little

debt from a big New York realtor, well,
that seemed just normal.

SLP, it's what everyone was doing in
2004.

The market is doing fine, for now.

And thanks to these phony notes, Dreyer
has the life of his dreams.

Not one, but two beach houses in the
Hamptons, an Aston Martin, and an $18

million yacht.

One wonders how he thought he would get
away with it. The only way he would ever

get away with it all is if the law firm
ultimately was profitable enough to

start paying off these loans.

Next, Dreyer's life implodes.

It's almost like, you know, the
caricature of the bandit with the money

bag sort of scurrying out the door.

By 2008, Mark Dreyer has built the law
firm of his dreams.

From their offices on Park Avenue, the
270 lawyers of Dreyer LLP work on

everything from patents to entertainment
law.

Celebrity clients include Jay Leno.

Former New York giant Michael Strahan
and the rock band Wilco.

But all in all, a great firm. You walk
in and it's like you smell the success.

You can see the money is spent.

And you think, well, if they can afford
this, then they must be really good.

At Dreyer, the motto is work hard, play
harder.

The lavish parties on Dreyer's 123 -foot
yacht are the stuff of legend.

He was out there dancing almost all
night. Very energetic, very fun. No

what song came on, he was, you know, any
genre, he was out there dancing it up.

Because when Mark stepped into a party,
Mark was at a party. Mark was there to

enjoy himself.

You could tell. He kind of liked it. I'm
a rock star. I walk in, this is my

firm, I'm going to have a great time.

So I think every party was very
different from a normal law firm party.

But there's a mystery at the heart of
Mark Dreyer's law firm.

Where exactly is all the money coming
from?

We sat down one day, a bunch of us, and
just kind of thought, well, let's think,

how much money are all these people
earning?

How much are they bringing in? And we
just couldn't make it work for us. But

where the money was coming from became a
source of gossip for everyone.

I think he's doing this, I think he's
doing that. But there was no definite

answer to our questions.

As Warren Buffett says...

It's only when the tide goes out that
you learn who's swimming naked.

And like a low tide, the financial
meltdown of 2008 will leave Mark Dreyer

running for cover.

Good evening. Not since the Great
Depression has the federal government

in to help a failing financial
institution in this country the way they

this past weekend, brokering a deal for
JPMorgan Chase to step in and take over

Bear Stearns.

something like panic on Wall Street. At
that point, no one wanted to pay or

invest in anything.

All anyone, every bank, every hedge
fund, every you and me and mom and dad,

essentially wanted to put money in a
savings account, hold your breath, and

wait for it to be over.

Nervous investors are looking for the
exit.

I think Trier would probably say that he
was desperate.

and that at this point the whole
operation was coming apart at the seams

that he really needed more paper signed.

Like in any Ponzi scheme, he needed to
issue more debt to pay off some of the

older notes and keep the whole thing
going.

As summer turns to fall, the pressure
almost becomes unbearable.

There was mere panic last week as
investors drove down stock prices.

In October, Dreyer is late in repaying
$115 million worth of notes to a hedge

fund.

The head of the fund wants to meet
Solo's CEO, look him in the eye, and

a repayment plan.

Well, Mark Dreyer can't do that because
he's defrauding Solo. Solo doesn't know

anything about it. So how on earth do
you come up with a face -to -face

with the CEO of Solo Realty?

He came up with a brilliant idea.

You create your own CEO.

Dreyer turns to a man named Kostakovich.

Kovachev is a law firm client who was
sued by the SEC in an unrelated Ponzi

scheme.

It appears that he was the Dreyer client
with the most malleable morals, the one

that Dreyer could go to and say, you
know, I need an Igor to my Dr.

Frankenstein.

On October 15, 2008, the two men
approached Solow's office on 9 West 57th

Street, one of the highest -rent
buildings in all of Manhattan.

And this is one of the most amazing
moments in the history of white -collar

fraud. But he staged a meeting in the
offices of Sheldon Solo without Sheldon

Solo or anyone there knowing that the
meeting was going to happen.

Two foxes are going inside the henhouse.

Dreyer will play himself.

Kovachev will play Solo's CEO.

On the 45th floor, they commandeer a
conference room.

install Kovachev at the end of a table,
and play host to a hedge fund.

And Costa Kovachev sat there and
impersonated the CEO of Solar Realty.

think we can pay back this debt in the
next six months. I said, see, no

You know, it was this type of... And the
hedge fund bought it.

The fund agrees to give Dreyer some time
to come up with the money.

It's a huge coup.

It's almost like a caricature of the
bandit with the money over his bag sort

scurrying out the door. It was almost
that vivid.

But Dreyer knows just how close he is to
getting caught.

The amazing thing was we later learned
the actual CEO of Solo Realty walked by

the conference room that day, saw them
in there, and kind of wondered, well, I

wonder what Mark's doing today, but he
had a meeting and he kept walking.

If he had gone in, he would have seen
that Kostakovich was pretending to be

in this meeting.

But he didn't.

Next on American Greed. With the
financial crisis deepening, everyone on

Street is more skeptical. Will Mark
Dreyer survive the scrutiny?

November 2008.

Publicly, Mark Dreyer is one of New York
City's top attorneys.

Privately. He is juggling a multi
-million dollar Ponzi scheme.

He impersonates well -known clients of
his law firm to sell fake securities to

wealthy hedge funds.

For six years, Dreyer has been enjoying
the fruits of his success.

But in the fall of 2008, with near panic
on Wall Street, the bills come due.

You know, it's debatable.

Dreyer might actually have gotten away
with this at some point, except that one

of the hedge funds involved that had
bought one of these notes decided that

wanted to reduce its risk, and it wanted
to sell half the note to another hedge

fund.

Solo Realty, Dreyer's former client, is
supposedly backing the note.

And to assure the first hedge fund that
this is a safe investment, Dreyer gives

them an auditor's report claiming that
Solo is a financially sound company.

But when the second fund looks at the
paperwork, they become suspicious.

A fund representative makes a call to
Solo's auditing firm, Burden LLP.

One of the partners of the auditing firm
believes his signature has been forged.

He calls the firm's lawyer, Thomas
Manicero.

It was evident to me in virtually a
nanosecond that what we were looking at

fabricated reports.

There's a logo here that makes reference
to Burden being a member of Horwath

International Association.

I knew that Burden had not been a member
of that association for at least four

years prior to the date of this letter.

That was easily a flag to me.

also significant, which jumped right off
the page to Stewart. As soon as he saw

this, this is not my signature. This is
not the way I signed.

Manicero confirms the hedge fund's
suspicions.

I told them, look, what you're looking
at are clearly forged documents.

Their response was, well, thank you very
much. You just saved us $25 million.

But Manicero wonders where the fake
reports came from. He looks for clues in

report.

We were going through the materials. We
saw a confidentiality agreement. It was

addressed to Kira of Mark Dreyer as the
representative of the solo entity.

He calls Dreyer to ask him about the
forged documents.

I said, listen, we're looking at some
clearly fabricated, forged audit

reports, and this is a major concern for
us because the accountant's audit

report is, in a sense, some kind of a
currency.

Dreyer dodges the question and talks in
circles.

His response to our questions, from my
perspective, was not coherent.

It was sort of rambling.

A lot of what I would term double -dutch
didn't make a lot of sense to me.

After the call, Manicero doesn't know
who's behind the forgery, but he knows

needs to report it to the Fed.

He meets with the U .S. Attorney's
Office in the Southern District of New

The next day, he gets a call.

Hi, Tom, this is Mark Dreyer. Can we
talk?

It really took me by surprise.

The last person in the world I thought
would be calling me.

Manicero says he needs to call Dreyer
right back.

He quickly dials the U .S. Attorney's
Office.

Said, this fellow's just called me. How
do you want me to handle this?

Within 15 minutes, the feds have
arranged to tap Manicero's phone.

Only then does he call Mark Dreyer.

He said, who's talking here? And I said,
well, you and I are talking. In fact,

you're going to do a lot of talking
because I got a lot of questions.

And then he asked me, quite
surprisingly, he said, is this

recorded? I took a quick gulp and said,
not by me, being very honest.

And that was good enough for him. And
then he proceeded to say, well, look,

know, I've done something very bad here.
I don't want you going to law

enforcement because my family's going to
get hurt. My firm is going to get hurt.

There's a lot of innocent people that
would get hurt over this.

Dreyer proceeds to explain his scheme,
but swears he has only done it this one

time. The conversation leaves Manicero
chilled.

I was numb. I hung up from them. The
phone rang about.

15, 20 seconds later was the
investigator from the U .S. Attorney's

basically saying, wow, you know, do you
believe that? We can't believe what we

just heard here.

You know, great job. Thank you very
much.

So I decided to just pack up my bags and
go home for the day because I wasn't

going to be able to focus on getting
anything else done that day.

At the U .S. Attorney's Office, Jonathan
Streeter heads an investigation into

Dreyer's fraud.

Over the next few weeks, he asks
Manicero to keep the conversation going

Dreyer. And so we had recorded
conversations of him trying to convince

accounting firm not to go to the
authorities.

Meanwhile, at the Park Avenue offices of
Dreyer LLP, Dreyer is getting tense.

He started screaming at the top of his
lungs, what the stock market doing?

And it was so loud that my office two
doors down.

But it really, I mean, it was.

abrasively loud.

He knows Manicero is on to him, and as
the economy nosedives, hedge funds are

calling in their investments.

He's running out of time and money.

All he could do was delay, deny, and
obfuscate, and just say, I'll tell you

more, I'll tell you more, but I've got
to go off to, you know, the Caribbean.

I've got to go off to the Gulf.

It was at that point that Dreier
realized his time could probably be

days rather than months.

Dreyer later confesses that he considers
making a run for it.

As one of his Hail Mary passes, he took
a trip to Abu Dhabi to try to raise

money from some Arab investors.

And one night he describes standing
outside in the desert air saying, I'm a

white man with $100 million in cash.

What if I just run?

But Dreyer has kids back in the States
and can't fathom a life on the run.

He returns to New York.

On the day after Thanksgiving, he
schedules one last call with Manicero.

And during the course of that
conversation, it was evident that he was

to unravel.

And he was telling me, you know, come
on, we have to be able to settle this.

can settle this matter.

You know, I'm saying, well, what are we
settling? I don't understand.

Explain to me. Well, I'll pay you and
your clients some money and, you know,

can money. Money is what you use to
settle things. I was sitting there and

just saying to myself, you know, there's
this is a bribe.

The U .S. attorney's office has heard
enough.

Their investigation has revealed just
how far Dreyer's scheme reaches.

What we uncovered over time as the case
unfolded was that.

He had sold hundreds of millions of
dollars worth of these notes, about $700

million worth of notes, all told.

Streeter asks Manicero to schedule one
last face -to -face meeting with Dreyer

the following week to confirm his
identity.

The stage is set to bring Dreyer in once
and for all.

But they won't get their chance.

Up next on American Greed, Dreyer skips
town in a last -ditch effort to save his

crumbling scheme.

The events that finally led to Dreyer's
fall were classic Keystone Cops farce.

December 1st, 2008.

Mark Dreyer's world is closing fast
around him. Dreyer has been selling fake

securities to hedge funds to support his
lavish lifestyle and prestigious law

firm. But the collapse of Bear Stearns
and other major institutions has sent

hedge funds scrambling to get their
money back.

And Dreyer can't pay.

It's just like what Warren Buffett says,
when the tide goes out, suddenly you

get to see who's really in trouble, and
Mark Dreyer needed to pay the bills.

To make matters worse, a bankruptcy
attorney at Dreyer's firm puts in a

request for $38 million being held in
one of the firm's secure escrow

But the money, which is never supposed
to be touched, is missing.

The attorney calls Dreyer and says, hey,
do you know anything about this missing

escrow money?

Dreyer did because he stole it. And he
had to come up over a weekend with a sum

of money to repay this lost money.

Dreyer needs to make a sale fast.

The next day, he boards a private jet
headed for Toronto, Canada.

His plan is to impersonate a
representative of the Ontario Teachers'

Fund, a former client of his law firm.

and sell one last bogus security to a
hedge fund executive.

He was attempting at the time to sell
about a $44 million note to

a hedge fund located in New York.

And that hedge fund had insisted on
having a face -to -face meeting with a

representative of this pension plan
located in Canada that was supposedly,

according to Mark Dreyer, guaranteeing
the note.

It's a brazen plan.

But it's similar to something he's
already attempted in the offices of

Solo.

Justice Kovachev has done for him in the
past. He's going to do it himself this

time.

Everything goes smoothly at first.

Dreyer meets with attorneys at the
pension fund, including a man named

Patfield.

Before leaving, he asks for Padfield's
business card and returns to the lobby.

He then asks if he can use a conference
room while he waits for his private jet.

In reality, he's waiting for Howard
Steinberg, an executive with Fortress

Fund, to arrive for his appointment.

So for the better part of an hour,
Dreyer is pacing the lobby.

In Toronto, waiting for this Steinberg
to come in.

And when he does, when he comes off the
elevator, Dreyer immediately grabs and

says, Oh, Mr. Steinberg, so glad I can
see you. We're just going to do it right

here in this conference room where he'd
been sitting.

Offering his new business card, Dreyer
claims to be Michael Padfield.

He hurriedly signs the papers needed to
sell his fake note.

and offers to escort Steinberg back to
the elevators.

But Steinberg is suspicious.

Dreyer seems nervous and in a hurry to
get rid of him.

Steinberg thinks twice and says he wants
to wait in the lobby, claiming he's

having lunch with a friend.

A jittery Dreyer abruptly leaves.

His mark remained in there and actually
asked the person at the front desk, if

that person he was just meeting with was
Michael Padfield and the person working

the front desk said, no, it wasn't.

Back on his private jet, Dreyer gets a
phone call from the hedge fund.

Gets a call from one of the top guys at
Fortress saying, we have a problem.

Someone is impersonating one of the
Canadians at the hedge fund.

Can you help us? Do you know anything
about it? And Dreyer's like...

That's a surprise. I'll look into it.

Dreyer is at a crossroads.

He can either fly back to New York and
deny the whole incident or return to the

pension fund offices and attempt to
explain himself.

And he later told me when he sat down,
he was 90 % sure if he went back to the

offices of the pension fund that he
probably would never get out, that

bad would happen.

And that's actually what happened. By
the time he got back, the police had

already been called.

And they put him in handcuffs and took
him away.

News of Dreyer's arrest for
impersonation reaches the offices of

next day.

You could tell something was up.

Secretaries were huddling. There were
whispers.

And I just walked out. I said, what is
going on?

And they said, Mark Dreyer's been
arrested.

I'm at my computer trying to do my job.
People are coming up crying.

attorneys are crying, pacing.

This is disgusting. This is disgraceful.
What do we do?

I said, I don't know. He's the one who's
the equity partner.

He's the one who pulls the strings.

He's the one who knows all the books and
all the 50 accounts.

And at that moment, Dreyer is helping
himself to the firm's escrow accounts

last time.

From a jail cell in Canada, Dreyer
transfers $10 million from a client's

account. to one of his personal bank
accounts.

If you talk to people in the legal
community, he committed a cardinal sin

of this. He was stealing money from
clients' escrow accounts.

And you just don't do that as a lawyer.

The next day, Dreyer is released on
bail.

On the evening of December 7th, he
arrives at LaGuardia Airport, where the

are waiting.

He is arrested and charged with
securities and wire fraud, officially

Dreyer LLP a ship with no captain.

And, you know, immediately, in a matter
of minutes, it throws the whole firm's

existence into question.

He is accused of impersonating
executives to sell fake IOUs to 13

hedge funds.

Raking in almost $740 million, Dreyer
has been one of the biggest names in

-collar crime.

Until now.

Uptown, Bernie Madoff is arrested for
masterminding the largest Ponzi scheme

history.

Some lawyers who know Dreyer suspect
that he's jealous.

That's got to hurt. Because if you think
about it, if Madoff hadn't been there,

if Madoff hadn't occurred, Mark Dreyer
would be the Ponzi. You know, he is the

guy in financial fraud.

Look what he did. And by the way, he did
it by impersonating people.

Forging documents. I mean, this was a
really great scheme.

A guy like Bernie Madoff comes along.

Meanwhile, a skeleton staff meets to
decide what will become of Dreyer LLP,

Dreyer's prized law firm, now in the
hands of a bankruptcy trustee.

They have no choice but to dissolve the
firm.

December 08 was bad enough financially
out there in the market.

To lose your job at that moment is...

bad enough. But then it's, you know,
it's the holidays, and your family's

to support you, and you're trying to be
still upbeat.

But yet, it's hard to fake that.

Eleven days later, Kostya Kovachev, the
man Dreyer is hired to carry out his

impersonations, is also arrested.

And Dreyer meets with defense attorney
Gerald Shargell to plan his next move.

He never intended to contest the
charges. He recognized that it was over

willing to accept responsibility, and it
was just a matter of getting through

this and getting as reasonable a
sentence as possible.

It is during this time that Dreyer makes
an unusual move, inviting Vanity Fair

reporter Brian Burrow into his home for
an interview.

Having been released on house arrest, a
disheveled dryer welcomes Burrow at his

$10 million midtown apartment.

It's a surreal scene.

He looked terrible.

He's red -faced, he's unshaven, he's
uncombed.

The apartment is this beautiful, large,
$10 million, sun -drenched apartment.

The most amazing thing was that there
were these hooks, naked hooks on all the

walls. And, of course, all his vaunted
art collection had all been sold off or

given away.

Over the next two days, Dreyer delivers
a surprisingly candid interview.

This was a man who had always felt
deeply empowered that this type of

was his birthright because he was so
smart. Because from boyhood, everyone

said he was a golden boy. He felt like
it was his, that it was natural. And I

think the deepest motivation.

was the fact that by his early 50s, he
was not that success.

And he deeply, desperately wanted to be
a success.

But others who know Dreyer have a hard
time buying it.

You went to a great law school. You had
the world at your fingertips. You just

got caught up in it. You didn't think,
well, I should protect myself.

I'll get out of it. And, you know, I'm
happy with just making a million and a

half a year, two million off of a law
firm.

Ken Gross.

who remembers Dreyer back when he was
the big man on campus at Lawrence High

School, doesn't accept his explanation
either.

To somehow get you into crime and to
risk all that you've achieved is so

inexplicable. And I just have to believe
in his own mind when he thinks back on

it that it's very hard to explain.

On May 11, 2009, Dreyer pleads guilty to
all eight counts against him, including

conspiracy, securities fraud, wire
fraud, and money laundering.

On July 13, he returns to court to face
sentencing, where he appears resigned to

his fate.

He was, first and foremost, a broken
man. He was, you know, lump and quiet

and noncombative.

The government recommends a term of 145
years in prison, just five years shy of

Madoff's sentence.

Dreyer is hoping for less.

The judge settles on a 20 -year
sentence.

20 years is a very long sentence, but
compared to some of the other sentences

that have been meted out and compared to
what the government wanted the sentence

to be, we felt that we did the best that
we could under the circumstances.

The judge also orders Dreyer to pay $389
million in restitution to his victims.

His homes, art collection, and even
office furniture are all put up for

But with most of his gains sunk into
maintaining the law firm, victims will

likely see only a small portion of their
money returned.

Still, Some argue his victims could have
done more to protect themselves.

In the financial markets, people know
what audit reports are. They have to

what audit reports are. It took me a
nanosecond to look at these things and

no, this is wrong.

You've got to do your work. You've got
to ask the questions.

In addition to the hedge funds, Dreyer's
victims include the hundreds of

attorneys and paralegals who worked for
him.

Hedge funds are victims, sure. But the
real victims here, were the employees

came in every day and they gave
everything to that firm.

It was a great job.

It's just so much effort put into
building this place. I loved it. And I

very loyal. And you just feel good about
yourself. I did it. Look at that. I cut

costs. I did this. And then you're left
with nothing. But I try to remain strong

because I want my children to be proud
of me.

In March 2010, Kostakovichev is
sentenced to four years in prison for

in Dreyer's scheme.

Dreyer serves his time at Sandstone
Prison in northern Minnesota, far from

family, and a world away from Park
Avenue.

His release date is October 2026, when
he'll be 75 years old.

Our lives go on, and we do different
things.

And this will maybe be forgotten one
day. That's true.

But you have to wonder how many people's
lives were really affected down the

line, unwillingly, because of one man's
decisions for greed.

And now what?

We're all left just to forget about it,
wish him well?

You know, because he says he's sorry?

I don't. I don't wish him well.