A judge denied bail on Thursday for a New York lawyer accused of selling sham investments to hedge funds. Hmmm… a shyster lawyer selling worthless real estate to a ‘hedge fund’. Can you say ironic? Things like this happen in Phoenix too and since the Charlie Keating days we have been involved in fighting a number of these con men in the Maricopa County Courts.

The case against Marc Dreier, founder at the 250-attorney law firm Dreier LLP in New York, has stunned the city. The Harvard Law School graduate is a 30-year veteran lawyer, whose firm has specialties in bankruptcy, litigation and employment law. They handled a case or two in Federal Court in Phoenix over the years.

Assistant U.S. Attorney Streeter said in court the actual monetary losses in the case may now exceed $380 million.

He said the fraud has likely been going on since January 2006. Dreier was ordered to remain in custody. He was arrested on Sunday for what authorities called a “stunning” and “brazen” scam.

Streeter said Dreier had been fooling some of the world’s most sophisticated investors. He is accused of scheming to market fake debt from a New York-based real estate developer to hedge funds and other institutional investors. Prosecutors say he cajoled his way into real estate and pension fund offices and created fake documents to try to convince investors that the worthless debt securities he touted were real. So, the next time you see a well dressed outsider ‘using’ your conference room, watch out, he may be claiming to be your company CEO, while he is actually signing away the deed to your building with some bogus financing instrument.

At the Law Firm of William A. Miller located in Phoenix, Arizona we specialize in these type of cases. Feel free to call at 602-319-6899 if someone has ripped you off in the greater Phoenix area in a real estate scam or hoax.

The meltdown of title-insurance company LandAmerica Financial Group Inc. has left scores of real-estate investors and entrepreneurs scrambling to recover money in what were supposed to be a short-term and no-risk arrangement. The investors, from Arizona retirees to a public company, had $400 million on deposit with the LandAmerica subsidiary to take advantage of a real-estate strategy known as a 1031 exchange. A 1031 exchange, named for a section of the U.S. tax code, lets investors delay capital-gains taxes on the proceeds from recently sold property, as long as the investor lets a third party hold the funds. They must reinvest the money in a new property within six months.

At the law firm of William A. Miller in Phoenix, we often tell client’s to go ahead and pay taxes now because the tax rates are historically low and buying again, may well not be wise. Yet, here is a reputable title-insurance company holding 1031 money until such time as the investor decides to reinvest it and poof, it’s gone.

If a lawyer does this in Arizona he loses his license and likely goes to jail. Why; because in Arizona lawyers cannot co-mingle funds. This is a historic wrong and once again, blood will flow in the streets and the lawyers will make a small fortune. What a mess. Someone needs to serve time based on these poor folks losing their hard earned money.

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