Another Person is Charged in Alleged $100M Dreier Fraud
A former broker who reportedly also may have been a former client of the Dreier law firm has been criminally charged with conspiracy to commit wire fraud, and allegedly helped Dreier’s founding partner swindle more than $100 million from two unidentified hedge funds.
Kosta Kovachev, 57, is accused of pretending to be a real estate developer’s controller, on one occasion, and chief executive officer, in another, in discussions and/or meetings with hedge funds that founding partner Marc Dreier reportedly tried to swindle, according to Bloomberg. He is also accused of having represented that Dreier had legitimate debt instruments for sale.
As discussed in earlier ABAJournal.com posts, Marc Dreier, the sole equity partner of the now-bankrupt Dreier law firm, allegedly stole some $390 million, much of it by persuading hedge funds to invest in worthless forged debt instruments supported by fraudulent financial documents. He has been accused of swindling two hedge funds of $113 million in this manner since October.
“In a separate case, Kovachev in 2006 was ordered to pay $350,000 in a civil suit brought by the Securities and Exchange Commission accusing him and 11 others of defrauding more than 600 investors of more than $28 million in a Ponzi scheme,” the Bloomberg article notes. “The SEC said that Kovachev and others sold unregistered securities structured as hotel timeshare rental interests.”
Kovachev is expected to appear for a hearing in federal court in Manhattan later today.
Additional details are provided in the City Room blog of the New York Times.
Earlier ABAJournal.com coverage:
Feds: Attorney Marc Dreier Stole $380M; a ‘Houdini of Impersonation’
Dreier’s Extravagant Lifestyle: ‘Dazzling’ Homes and $200K Secretaries
