At the WSJ Law Blog:
A flurry of SEC filings, reviewed last night by the Wall Street Journal, reveal new allegations of [Dreier LLP founder Marc] Dreier’s recent activities, including allegations that funds are missing from clients’ escrow accounts. Here’s the WSJ story.
According to a declaration by the firm’s Controller John Provenzano, millions of dollars owed to clients appeared to be missing from the firm’s accounts.
Provenzano says that last week, Dreier called him multiple times from a Canadian jail (where Dreier was held on impersonation and fraud charges), begging Provenzano to wire $10 million of firm money to his personal account. Provenzano refused, but Dreier was able to get his bank to comply.
Provenzano also admitted that since 2005, Dreier has taken up to $40 million our of Dreier LLP accounts to buy art.
Also, from Dreier LLP partner Joel Chernov:
… because Dreier ran the firm by himself he was the only one who could access bank accounts to transfer or disburse money to rectify many of the financial problems. The December health insurance premiums have not been paid, the firm’s December rent is overdue and AT&T Inc. was set to terminate Blackberry service as of Tuesday. Chernov also says the quarterly premium for the firm’s malpractice insurance is four weeks’ overdue.
Chernov says requests are pouring in for the firm to return client funds held in escrow. But only Dreier can do so. “In addition, many Dreier LLP attorneys and staff have left the firm and it is my understanding that they have taken certain files with them.”
This post will be update as the situation develops.