Unraveled: The Fall of Marc Dreier

Unraveled and Compliance

Had it not been for Bernie Madoff, Marc Dreier would likely have been the most notorious fraudster of recent memory. The press coverage was stolen away from Mr. Dreier’s $3/4 billion scam by the billions Madoff stole. But Dreier’s theft was much more brazen and a lot crazier.

Over the weekend, between shuttling the kids to activities, mowing the lawn, and football, I managed to watch Unraveled. It tells the Dreier story and interviews him during the 60 days between the day he plead guilty and his sentencing hearing.

Trapped in his gilded cage, an Upper East side apartment with breathtaking views, Dreier struggles with his uncertain future. He knows he will be in prison for a long time. The prosecution wants over 100 years and he is asking for 12 years. He is hoping that he will be imprisoned close enough to Manhattan that his family could visit more often. And he is hoping his sentence will offer some hope that he could live long enough to once again be free.

The movie offers a great deal of insight into the mind of fraudster and the motivations to start criminal activity.

Dreier was an ambitious lawyer, with dreams of running a big law firm. He has an outsized ego and wanted to drape himself with expensive things that showed success: expensive art, expensive cars, mingling with celebrities, and big donations to charity. His rapidly expanding law firm was sucking in capital and all of those expensive things were… expensive.

Dreier wanted to be perceived as being successful and wanted others to recognize his success.

Dreier had drained his credit and was desperate for another $1 million. So desperate that he created a fictitious note from one of his clients and found a buyer. He thought he could invest the cash in his law firm and create enough income that he could pay back the note. A year later when the note matured, he didn’t have the capital and needed to roll it over. And he needed more capital. So he faked a bigger note. This steamrolled over the next few years enough that he ended up with $740 million in stolen cash.

Dreier used one of his real estate company clients as the front. He knew enough about its business that he could make financial statements that were credible enough. He felt that this client owed him. Dreier had been sanctioned by a judge for being too aggressive. Dreier felt the client should have spoken out in favor of him, but instead stayed silent. Dreier repaid that perceived betrayal by having that company be the one issuing Dreier’s fake notes.

If you have any interest in financial fraud or compliance, it’s worth 90 minutes of your time to watch the movie. It’s currently streaming on Netflix.