Marc Dreier, the New York lawyer convicted of defrauding hedge funds of $400 million, won’t have to testify in person in a trial involving his bankrupt law firm, Bloomberg News reported yesterday. Dreier, who is serving a 20-year term at Sandstone Federal Correctional Institution in Minnesota, had been ordered to testify in a proceeding seeking to recover for creditors $137 million transferred to Westford Asset Management LLC before the fraud became public. A lawyer for Sheila Gowan, a court-appointed administrator overseeing the bankruptcy of Dreier LLP, told U.S. District Judge Alvin Hellerstein in Manhattan in a letter yesterday that the dispute has been settled and Dreier’s testimony isn’t needed. The letter didn’t provide details of the agreement, which must be approved by a bankruptcy judge before it can take effect. Dreier was to have testified about whether his fraud was a Ponzi scheme, when it began and whether the payments to Westford were made as part of the scheme, according to court papers. He had asked to testify by video or telephone rather than appear in person. Dreier pleaded guilty in May 2009 to money laundering, conspiracy, securities fraud and wire fraud after admitting to stealing $400 million by selling fake notes to hedge funds. Dreier used the money to subsidize his firm and buy luxuries for himself, including a 121-foot yacht and $39 million in contemporary art.
