Rothstein and Dreier: How Much Alike?
Some say there are a lot of similarities between fallen New York lawyer Marc Dreier and Scott Rothstein, but one that I learned is just flat-out weird.
|One Beacon Court|
In July, Dreier's 3,000-square-foot apartment on the 49th floor sold for $8.2 million at a forced auction. The money was split between creditors in his bankruptcy case and victims of his fraud. It came after Dreier was sentenced in July to 20 years in prison for defrauding hedge funds of about $400 million.
It would seem Rothstein's smaller apartment, which he bought in July of last year for $6 million, will soon go through a similar process.
The Dreier case was a big deal in New York, but it can hardly hold a candle to the Rothstein case in terms of drama. Today I received two emails from readers about similarities between the two men, though. One reader sent this list of samenesses between the two fraud artists:
-- the rises from mediocrity to the richest lawyers around.
-- the mediocrity of their staffs.
-- their "unique business models."
-- their obsession with
-- the fact that they each de facto owned their own firm and had no checks and balances.
-- the fact that they built huge law firms even though it was a major cash burn just to inflate their egos (although i guess you can argue that the big firm was needed to give the appearance of success).
On top of that, Fort Lauderdale lawyer Norm Kent sent me a link to a Vanity Fair article about Dreier, saying that reading it might lead to a better understanding of Rothstein.
I'm still not really seeing it. But for their crimes, the two men don't seem that much alike to me. Dreier went to Yale and Harvard, Rothstein to Florida and, ahem, Nova. Dreier boasted of an art collection; Rothstein just kept buying cars until he puked. Dreier led an outwardly respectable existence; Rothstein became a comet of glaring excess. Dreier was a child of entitlement; Rothstein was a playground kid out to prove himself.
I skimmed the article, and the only thing that really caught my eye was this little passage:
Dreier watched the towers fall from his Park Avenue office. He doesn't blame any of what happened on the events of that day, but he does trace the source of almost all his ensuing difficulties to the months after 9/11. "I had a very emotional response to that," he says. "I remember feeling an emptiness I couldn't shake in the last quarter of '01, feeling emotionally drained and looking to find myself."
Dreier won't say it, but in some inescapable way he found the fiery fall of the Twin Towers a metaphor for his career, for his entire life. Part of it was the conclusion of his 10-year fight against Avon, which finally ended in November 2001; only later would a judge rule against Dreier, sending the biggest case of his life spiraling down the drain. But it was more than that. He and Elisa had been growing apart. They began to argue more. Dreier won't explain what happened, only that he was to blame, saying, "I wasn't attentive enough to my family." Elisa filed for divorce in January 2002. This, in turn, exacerbated simmering tensions with Dreier's Florida partner, Neil Baritz; the wives were close. Dreier and Baritz agreed to split up. William Federman left as well, after objecting not only to Dreier's penchant for secrecy--he says he never received the monthly financial statements he was promised--but also to the exorbitant sums Dreier had spent on their Park Avenue offices.
All this sent Dreier into an emotional tailspin. "I was very distraught," he says. "I was very disappointed in my life. I felt my career and my marriage were over. I was 52 and [I felt] maybe life was passing me by... I felt like I was a failure."
Since Rothstein's implosion, I've wondered a couple of times if he didn't have a similar moment, if he wasn't crushed in some way. Remember, he was just another attorney in town for more than a decade before he decided to steal his way to very top. It's hard not to think that something occurred to him, something mutated him into the comic-book character he became. I'm not saying he fell into a vat of acid but maybe something emotionally searing. Perhaps it was just a pronounced midlife crisis, maybe something worse.
For what it's worth, the timing of his divorce coincides pretty well with his transformation; his first wife, also named Kimberly, filed in 2003. Remember that Rothstein is someone who outwardly revered family; he would always say that there was nothing more important than his wife and kid. (Little-known fact: Rothstein also helped care for a child from the Blades football family he met during litigation whom he said he considered a son to him.) The divorce wasn't pretty, from what I've been told; there were some rough issues with his daughter. Forgetting whatever emotional issues there may have been, his financial life was in a shambles. He had many unpaid bills at the time. Yet he moved into a million-dollar house with the help of a loan from his friend Ted Morse. Then Morse helped him move into Ricky Williams' home, which really seemed to ignite Rothstein's acquisition mania.
Maybe nothing much really happened to Rothstein. The divorce may have just freed him up to become the natural disaster he was meant to be. It would be interesting to know.