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SHOULD THE U.S. TREASURY PROVIDE BAIL-OUT MONEY OR BAIL MONEY? |
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SHOULD THE U.S. TREASURY PROVIDE BAIL-OUT MONEY OR BAIL MONEY?
--Due diligence not on the list of priorities of Bush Administration to vet bail-out funding.
By Jim Miller
New Yorkers were shocked at the headlines of a New York attorney charged with a 380 million dollar swindle. (1) That swindle is one of a long list of financial swindles plaguing the financial market. Now, the U.S. Taxpayers have been and will continue to be swindled by the funding of massive financial failures of some of the nations financial institutions:
- Billions are loaned to “healthy” bank so they can buy-out, for cheap, “unhealthy” banks, thus consolidating more power among the rich right.
- Money is flowing out of the Federal purse without having conducted deep due diligence to prevent the use of the plunder to cover-up Ponzzi schemes.
- Have the Federal Treasury obtained legal collateral based on independent property appraisals by qualified appraisers? Who has independent supervisory authority over the actions of Treasury?
- Have the FBI, SEC, OMB, GAO, FTC, Congressional panels, NYSE, Attorneys General, Inspectors General, or any other investigative agency conducted audits of the financial institutions before the funding takes place, to uncover swindles in the making or an attempt to cover-up prior Ponzzi schemes?
The basic premise of the financial bail-out is to infuse cash into the banks so they can make loans to solve the business liquidity crises. Our Congress folks never asked the primary questions: Before the crises, banks were loaning money and raking in huge profits. What happened to all that money? I'll tell you.
The money is carefully stowed in bank vaults, waiting for the bottom of the depression, so they can buy property at a small fraction of the real value. Joe Kennedy did this. Before the 1929 crash, Kennedy converted much of his hard assets for hard cash. Then in the 30's was able to amass a fortune by purchasing bankrupt companies. He had plenty of company who bailed-out of the stock market months before the crash.
We are seeing a repeat of the Joe Kennedy march to extreme wealth. This is the scheme of the New World Order – gather all of the productive wealth of the world so they can rule the world and become even more wealthy.
Also, don't forget their other agenda, Eugenics, which is to kill about six billion people on the Earth. In terms of terrorists, 9/11 is just a small preview. How will this genocide occur? Simply, by allowing massive diseases to run rampant, diseases for which no cures exist for the millions because the New World Order owns all of the drug manufacturers who hold all of the patents and make only enough drugs to service the rich right.
Jim Miller
jimmiller5417@yahoo.com
December 13, 2008
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(1) MARC S. DREIER AND: FRAUDS AND SWINDLING======================]
U.S. SECURITIES AND EXCHANGE COMMISSION
http://www.sec.gov/litigation/litreleases/2008/lr20823.htmLitigation Release No. 20823 / December 8, 2008
SEC v. Marc S. Dreier,
United States District Court for the Southern District of New York,
Civil Action No. 08 Civ. 10617(MGC) (filed on December 8, 2008)
SEC Charges Marc S. Dreier, New York Attorney, With Multimillion Dollar Fraud; Seeks Emergency Relief
On December 8, 2008, the Securities and Exchange Commission filed a civil injunctive action in United States District Court for the Southern District of New York alleging that New York attorney Marc S. Dreier engaged in an elaborate scheme, that violated the antifraud provisions of the federal securities laws and raised at least $113 million from the sale of bogus promissory notes. According to the SEC's complaint, Dreier is the founder and managing partner of Dreier LLP, a 250-attorney law firm headquartered in Manhattan. Along with its complaint seeking a permanent injunction, disgorgement of Dreier's ill-gotten gains, and civil monetary penalties, the Commission filed an application for an emergency court order to freeze Drier's assets and appoint a temporary receiver.
The SEC's complaint, filed in federal court in Manhattan alleges that since at least October 2008, Dreier has been marketing fake promissory notes, including bogus notes of a New York-based real estate development company, to hedge funds and other private investment funds, and has closed at least three sales. According to the complaint, Dreier created an elaborate charade designed to convince purchasers that the notes were genuine. He allegedly distributed phony financial statements and audit opinion letters of a reputable accounting firm, and recruited confederates to play the parts of representatives of legitimate companies involved in the transactions, even creating dummy email addresses and telephone numbers.
According to the Commission's complaint, Dreier directed that two purchasers of the bogus notes wire payment to what appeared to be his law firm's escrow account. At least one note purchaser discovered the fraud and demanded, and received, the return of its investment. Approximately $100 million in known proceeds from the sale of the bogus notes remains unaccounted for. The SEC's complaint alleges that, among other fake securities, Dreier has been offering fictitious promissory notes of a New York-based real estate development company (the "developer"), a former client of Dreier and his firm.
Since at least October of this year, Dreier has approached at least three different investment funds with an offer to sell them, at a deep discount, various short-term, unsecured promissory notes supposedly issued by the developer. Two of the investment funds agreed to purchase the notes (one fund purchased notes in two separate transactions) and forwarded approximately $113 million to an account in the name of "Dreier LLP Attorney Trust Account" in payment. A third fund was offered the notes, but declined to participate. As alleged in the complaint, all of the offers were accompanied by documents that Dreier subsequently admitted he knew were fabricated. Dreier offered the notes for sale even though he knew that the developer had never issued the notes, had not authorized Dreier to market them and indeed knew nothing of their existence or Dreier's offers or sales.
The complaint further alleges that in marketing the notes, Dreier provided the hedge funds with fabricated documents including a "form" note and related agreements, "audited financial statements," and purported audit letters, which bore the forged signature of the developer's auditor, but which were printed on purported stationary of the developer's auditing firm. Dreier did not tell representatives from the hedge funds that the notes were bogus, that the "audited financial statements" and audit opinion letters were fabricated, or that the developer had never issued the notes or authorized Dreier to market them, despite Dreier's knowledge of these matters. As alleged in the complaint, Dreier has admitted that:
- The notes were fictitious.
- The notes had never been issued by the developer.
- The developer had never authorized him to market the notes.
- He had fabricated documents evidencing that the notes had been issued by the developer to the original holder even though the original holder may never have purchased any notes issued by the developer. In that connection, he or his confederates forged the signature of the developer's CEO.
- The developer's financial statements and the audit reports were fabrications.
- He knew that the phony financial statements and audit reports had been distributed to the hedge funds without disclosure that they were false.
According to the complaint, Dreier is 58 years old and resides in Manhattan, and is a former partner at two prestigious law firms and a graduate of Harvard Law School and Yale College. In addition to its offices in Manhattan, the complaint alleges that Dreier LLP has offices in Manhattan, Los Angeles, California, Stamford, Connecticut, and Pittsburgh, Pennsylvania, among other places. The SEC acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York.
SEC Complaint in this matter http://www.sec.gov/litigation/complaints/2008/comp20823.pdf =========================================\
Dreier Stole $380 Million, Feds Say; Bail Denied due to 'Enormous' Flight Risk
A prosecutor Thursday more than tripled, to $380 million, the sum the government says attorney Marc Dreier has stolen from hedge funds and investors.
The prosecutor, Assistant U.S. Attorney Jonathan Streeter, also told a federal magistrate judge that Dreier's frauds, initially reported as occurring since October and amounting to $113 million, stretched back at least to January 2006.
Arguing successfully that Dreier should be held without bail while a full accounting of his assets is pursued by a court-appointed receiver, Streeter called Dreier the "Houdini of impersonation and false documents."
"Mr. Dreier is in a desperate situation and the only way out of this desperate situation is for him to flee," Streeter argued Thursday before Southern District Magistrate Judge Douglas Eaton. "He faces almost certain conviction given the mountain of evidence that is growing every day."
Dreier, a commercial litigator who founded Dreier LLP, was arrested at LaGuardia Airport Sunday night on a bare-bones complaint charging one count each of securities and wire fraud for trying to sell, and selling, to three hedge funds fictitious notes he claimed had been issued by a real estate company. Along the way, he allegedly hijacked the identity of both Solow Realty and an accounting firm to make the sales.
Based on what Streeter said Thursday in court, Dreier could face additional charges.
"He has been fooling some of the most sophisticated investors in the world," Streeter said.
Defense Attorney Gerald L. Shargel came close to persuading Magistrate Judge Eaton to allow Dreier his freedom while the charges are pending. Dreier -- unshaven, looking tired and wearing a prison-issued blue jumpsuit -- watched the proceedings carefully, leaning in to speak to Shargel on two occasions to advise his lawyer to add a point to his argument.
Shargel proposed little in the way of financial guarantees that would ensure his client would return to court, instead offering to have Dreier remain under house arrest at his home in Quogue, Suffolk County, monitored by a GPS and watched round the clock by armed guards.
But Streeter said there was no reason to believe that someone who kept a box of cell phones in his office to compartmentalize his deception could be trusted to stay in the country.
Dreier had traveled extensively in the last year, including to Qatar, United Arab Emirates, Spain, St. Martins and Turkey, and had contacts abroad where money might be hidden, Streeter said.
"He is a person of exceptional ingenuity and exceptional resourcefulness" who has the ability to escape the United States and "get to that pile of money that he must have somewhere," Streeter said.
Shargel made his bail argument, in part, on the strength of Dreier's decision to return to the United States from Canada, where he was arrested on a charge of impersonation -- a charge Streeter said was leveled because Dreier had gone to Canada to commit another fraud.
Shargel said he flew to Canada last week to meet with his client. Dreier had been released on $100,000 Canadian bond. Edward Greenspan, "one of the best lawyers," Shargel said, had assured Dreier that he could stay and "fight extradition and he could get bail and it would be two years to get back to the United States."
"And Mr. Dreier refused that option," Shargel said.
Shargel said he called the Southern District U.S. Attorney's Office from Canada and spoke to Guy Petrillo, head of the criminal division, who could not comment on the investigation but confirmed the names of the prosecutors working on the case. Shargel said he knew what was awaiting Dreier upon his return to New York, but his client made the trip anyway.
Shargel also told the court Dreier took two trips out of the country in the fall -- one when he knew his victims were going to the authorities and a second when "he knew he would be arrested" -- yet returned both times.
'ENORMOUS RISK OF FLIGHT'
Shargel also cited United States v. Sabhnani, 493 F.3d 63 (2007), where the 2nd U.S. Circuit Court of Appeals, citing "extraordinary" physical restrictions imposed on a Long Island couple accused of enslaving two Indonesian girls, ordered that the couple be released pending trial.
But Streeter said the Sabhnani case did not "involve the kind of extraordinary, elaborate deception that this crime involved."
Magistrate Judge Eaton noted key distinctions between the two cases in issuing his ruling. In Sabhnani, he said, the couple had answered an "exhaustive list" of questions posed by prosecutors about their finances and the bonds were fully secured by $4.5 million.
He said he would not rule out the possibility of revisiting the bail issue once several unresolved questions about Dreier's finances are answered by a court-appointed receiver, Mark Pomerantz, particularly whether or not Dreier has money stashed abroad.
The magistrate judge was ultimately persuaded that the "government's evidence does appear to show an enormous risk of flight."
Shargel protested his client's incarceration at the Metropolitan Correctional Center, where, ostensibly because of a shortage of beds, he said Dreier is being held in solitary confinement, where he has been permitted only one shower since his arrest, and no phone calls or visitors, not even a book.
"You can lose your mind in there in three weeks," Shargel said.
"It's just inhuman for him to be in a facility for people who have committed some infraction," he said. "It's a constitutional violation."
Eaton said he would do what he could to get Dreier moved to a less restrictive environment pretrial.
And Streeter said he would do what he could to make it easier for Dreier to assist the receiver.
After the hearing, Shargel said his options were to press the bail issue de novo before a district court judge or "pick up on what Magistrate Judge Eaton said and supply a fuller financial picture" -- something he assured the court his client is committed to doing.
Shargel also argued that a different form of incarceration for his client would also make it easier for Pomerantz to do his job.
Pomerantz, of Paul Weiss Rifkind Wharton & Garrison, has been meeting with Dreier LLP partners in an effort to get a handle on the firm's assets even as lawyers are leaving and taking clients, and their accounts receivable, with them.
Vincent Pitta of the 13-lawyer Pitta & Dreier, one of 10 entities in which Dreier was the sole equity partner, said Thursday the firm is in "dire financial straights."
"All the related Dreier LLP bank accounts have been frozen," Pitta said. "We are working with the receiver to try and arrange health care coverage and to make sure there is attorney malpractice insurance and Workers' Compensation coverage.
"We're trying to keep calm, which is almost impossible, and trying to get people opportunities to interview with other law firms," he said. "We're having a job fair on Monday."
In addition to the criminal account, Dreier faces civil actions filed by the Securities and Exchange Commission and Wachovia Bank.
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Lawyer Seen as Bold Enough to Cheat the Best of Investors New York Times http://www.nytimes.com/2008/12/14/nyregion/14lawyer.html
By ALISON LEIGH COWAN, CHARLES V. BAGLI and WILLIAM K. RASHBAUM
Authorities say that Marc S. Dreier, one of New York’s most accomplished lawyers, brazenly swindled the city’s savviest investors, in a fraud estimated at $380 million.
December 14, 2008
MORE ON MARC S. DREIER AND: FRAUDS AND SWINDLING, DREIER, MARC S
Lawyer Charged With Huge Fraud Is Denied Bail
By WILLIAM K. RASHBAUM At a hearing on Thursday, the government said that the amount Marc S. Dreier is accused of stealing had hit $380 million. December 12, 2008 MORE ON MARC S. DREIER AND: BAIL, FRAUDS AND SWINDLING,
SECURITIES AND COMMODITIES VIOLATIONS,DREIER, MARC S
Lawyer Is Accused in Massive Hedge Fund Fraud By WILLIAM K. RASHBAUM and ALISON LEIGH COWAN Marc S. Dreier, a prominent New York lawyer, is said to have brazenly duped hedge funds out of $100 million.
December 9, 2008
MORE ON MARC S. DREIER AND: HEDGE FUNDS, LEGAL PROFESSION, FRAUDS AND SWINDLING, SECURITIES AND COMMODITIES VIOLATIONS,CANADA, NEW YORK CITY,SECURITIES AND EXCHANGE COMMISSION, POLICE DEPARTMENT
