Dreier LLP Declares Bankrupty In Wake Of Founders Craziness

Dreier LLP, a major New York law firm, has declared bankrupty. A law firm going out of business isn't exactly big news, but the reason for this particular firm going under is.

Marc Dreier founded this firm, and was caught in Canada attempting to impersonate another attorney so as to obtain tens of millions of dollars:

The mid-size firm, Dreier LLP, has represented celebrities including retired football star Michael Strahan and former News Corp. publishing executive Judith Regan.

Dreier's lawyer has said his client would cooperate fully with the court-appointed receiver overseeing his assets.

The 58-year-old defendant was jailed without bail last week after being charged in a criminal complaint and by the SEC in the alleged sale of fraudulent promissory notes.

Prosecutors accused Dreier of posing as if he were peddling heavily discounted investments in a New York City real estate development company because original investors, damaged by the world's financial crisis, were backing out.

The SEC said Dreier created an elaborate charade to convince three hedge funds that the investments were real. One hedge fund sent $13.5 million to Dreier while another wired $100 million, authorities said

Prosecutors have estimated total loses could top $380 million.

The defendant also is charged in Toronto with impersonation in connection with the attempted sale of $45 million of notes to a hedge fund.

The other attorneys at the firm aren't involved in the criminal activities, but they're going to feel the fallout.