More brazen than Madoff? (pg. 4)

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By Roger Parloff, senior editor

In November, while prosecutors continued investigating, Dreier offered Fortress $33 million worth of phony notes purportedly issued by Canada's BCE and backed by the Ontario Teachers Pension Plan. The Fortress agent insisted on meeting with pension-plan representatives in person. Gamely, Dreier devised a pretense for meeting the plan's general counsel, Michael Padfield, at its Toronto headquarters on Dec. 2, according to accounts in the Toronto-based Globe and Mail and National Post newspapers. There the two men exchanged business cards. Afterward Dreier waited near the reception area until the Fortress representative arrived. Dreier quickly ushered him into a back conference room, introduced himself as Padfield, and handed him Padfield's card - the same one Padfield had just handed Dreier minutes earlier. Dreier's conduct was sufficiently suspicious that, after the meeting, the Fortress representative asked the receptionist if that had really been Padfield. He was told no, the man was a visitor. The police were called, and they arrested Dreier that day.

Dreier made bail, but on returning to New York he was taken into custody at the airport and booked for securities and wire fraud.


There is an unfortunate optical illusion - a variant on the Doppler effect - that besets all frauds. It's unfortunate, because it has the effect of exacerbating the pecuniary losses that fraud victims endure, by unfairly leaving them, like many rape victims, irrationally ashamed of themselves.

The Doppler principle we posit holds that as a victim approaches a swindler, he sees nothing but green lights. But as soon as he realizes that his money is gone, he spins around and beholds, as if by magic, bright red flags as far as the eye can see.  To top of page

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