$33 Million in Artworks Transferred to Dreier Victim
Joel Stashenko writes for New York Law Journal, an American Lawyer affiliate.
Artworks by Damien Hirst, Roy Lichtenstein, Mark Rothko and Andy Warhol were among 18 pieces that have been transferred to a hedge fund victim of the fraud committed by Dreier LLP, the law firm run by imprisoned ex-attorney Marc Dreier. The works, which were displayed in Dreier's home, are valued at about $33 million. U.S. Attorney Preet Bharara in Manhattan said Monday the works have been transferred by U.S. marshals to the hedge fund Heathfield Capital Limited, successor-in-interest to Paul Singer's Elliot International and Elliot Associates.
Dreier had pledged the works as security to finalize a deal in what prosecutors said was part of a massive securities and wire fraud scheme involving the sale of fake promissory notes and the embezzlement of Dreier LLP client funds.
Under a July 2 opinion by U.S. District Judge Jed Rakoff, Heathfield and U.S. officials agreed that Heathfield would receive the artworks and Heathfield will pay $1.65 million to the government for distribution to other Dreier victims. "Fraud is the dysentery of crime; even after the infection is contained, the unpleasant after-effects linger interminably," Rakoff wrote in Dreier pleaded guilty in May 2009 to various counts, including securities fraud and wire fraud, and was 1202432226536 sentenced by Rakoff to 20 years in prison. Prosecutors say Dreier collected more than $700 million through the sale of fake promissory notes and that his firm misappropriated $46 million in client funds.