- The Washington Times - Thursday, March 19, 2009

NEW YORK (AP) - A prominent Manhattan lawyer accused of peddling $700 million in phony securities to hedge funds will likely forgo a trial and change his plea to guilty, his attorney told a judge Thursday.

The defense announcement came at a hearing where Marc Dreier pleaded not guilty to a revised indictment accusing him of money laundering in addition to the charges he already faces of securities fraud, wire fraud and conspiracy to commit those crimes.

Dreier, 58, was arrested in early December for allegedly swindling about a dozen hedge funds by selling them what he claimed were discounted investments that had been unloaded by distressed sellers.

He used some of the proceeds for personal purchases, including numerous homes, a yacht, several vehicles, expensive artwork and other expenses that fueled his lavish lifestyle, prosecutors said.

Prosecutors added a money laundering charge earlier this week, which required him to return to court for another plea. Dreier’s attorney, Gerald Shargel, told a judge that an eventual guilty plea “is what we expect.”

On Thursday, U.S. District Judge Jed Rakoff ordered prosecutors to turn over a list of all the victims to the defense, even though prosecutor Jonathan Streeter said some of them didn’t want to be named. Dreier “needs to know what parties you are accusing him of making false representations to,” the judge said.

The judge reserved decision on a defense motion to dismiss the securities fraud charge, and on a request by prosecutors to force Dreier’s family to pay more than $30,000 a month in mortgage payments and other costs for his Manhattan apartment.

Dreier is free under a home detention program that requires him to be watched by armed guards.

Before he was arrested, the defendant spent a decade building a law firm that had more than 250 attorneys and some big name clients, including retired football star Michael Strahan and former News Corp. publishing executive Judith Regan.

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