The long shadow of Bernard Madoff’s 150-year sentence allowed crooked lawyer Marc Dreier—also one of the biggest fraudsters ever—to look forward to light at the end of the tunnel known as the federal penitentiary.
“To suggest this was close to Madoff would be to substitute ideology for analysis,” said U.S. District Judge Jed Rakoff, who gave Dreier 20 years and ordered him to forfeit nearly $384 million. “Mr. Dreier’s crimes, despicable though they may be, pale in comparison to Mr. Madoff.”
After classifying the 59-year-old Dreier as guilty of fraud of “epic proportions” and “appalling betrayal of trust,” Rakoff rejected the Justice Department's request for the cumulative maximum of 145 years, just five years short of the maximum for Madoff.
“To suggest this was close to Madoff would be to substitute ideology for analysis,” said U.S. District Judge Jed Rakoff. “Mr. Dreier’s crimes, despicable though they may be, pale in comparison to Mr. Madoff.”
“Are you serious, is the government serious about asking for 145 years in prison?” Rakoff asked Assistant U.S. Attorney Jonathan Streeter.
The prosecutor replied: “We are serious about asking for life imprisonment, “ before admitting to the judge that “anything over 30 years” would amount to life.
“I knew you were going to do that to me,” added Streeter.
Rakoff said “for the government to ask for 145 years is to demean the sentence that Judge [Denny] Chin imposed on Mr. Madoff,” adding that the 145-year request for Dreier was “beyond all reason as far as white-collar crime is concerned. It sends so much the wrong message… It says the government is not sensitive to being fact-specific.”
Taking note of “judicial activism” by the Supreme Court and Sonia Sotomayor’s confirmation hearings, Rakoff challenged the entire notion of “life imprisonment” for white-collar criminals. He raised the question of why life imprisonment, if the strongest penalty made into law by Congress is 20 years.
Rakoff added that given the multiple crimes committed by Dreier, the government could have charged him with enough counts to stack the maximum allowable penalties up to 1,000 years.
Dreier, educated at Yale College and Harvard Law School, impersonated money managers and financiers and forged dozens of documents while selling fake investments and stealing from his law firm’s clients’ escrow accounts.
In seven years, he took in more than $700 million from 30 outside institutional investors and destroyed his 250-member law firm and its clients.
For four days after his Dec. 7 arrest, Dreier was the biggest white-collar crook in the country; then Madoff was arrested on Dec. 11. Madoff’s Ponzi scheme may have exceeded $50 billion, conned more than 8,000 investors, and flourished for at least two decades, making Dreier seem like small potatoes.
Dreier’s lawyer Gerald Shargel appeared to have convinced the judge that Dreier had helped investigators, a claim disputed heartily by the prosecution. Shargel also argued that a heavy sentence would do nothing to deter other white-collar criminals, a claim the judge quibbled with, but essentially accepted.
Rakoff said he was moved by a letter Dreier wrote last week, apologizing and seeking leniency. In court Monday, Dreier’s apology—which he said he hoped would give his victims “some small satisfaction”—took 2 minutes 45 seconds, about half the time Madoff’s act of contrition.
Saying he did not believe any defendant is “beyond redemption,” Rakoff also ordered alcoholism treatment thrown in for Dreier. With that program and time reduced for good behavior, Dreier could be back on the street at age 75 to enjoy time with his son and daughter, each of whom wrote letters to the judge. So did Dreier’s mother, giving him three more letters for mercy than Madoff got.
Perhaps sensing that he will be criticized as being soft, Rakoff said: “The sentence I will impose will not minimize the magnitude of the crime.” Shargel said Dreier will not appeal the sentence, which he requested be served at the minimum-security facility in Allenwood, Pennsylvania.
For the last few months, Dreier has been living in his $7 million East Side apartment under house arrest, where—judging by his tanned face in court—he must have been sunning himself on his 34th-floor terrace at One Beacon Court.
After the sentencing, he was handcuffed and his suit-coat, belt, and custom-made pink and blue patterned silk tie were handed to his legal team as he was led off to the Metropolitan Correctional Center. Once again, he is a ship passing in the night with Madoff being moved from there today, reportedly to a federal prison in Butner, N.C.
Still, unlike Madoff so far, the public will see more of Dreier. While under house arrest, the narcissistic criminal granted exclusive interviews to 60 Minutes and Vanity Fair for the fall season.
Allan Dodds Frank is a business investigative correspondent who specializes in white-collar crime. He also is president of the Overseas Press Club of America.