2008-12-24wsj.com

A former stockbroker who was fined $350,000 in 2006 for his role in a Ponzi scheme allegedly conspired with New York lawyer Marc Dreier to defraud hedge funds out of more than $100 million, according to a criminal complaint unsealed Tuesday.

Federal prosecutors in New York's Southern District charged Kosta Kovachev with conspiracy to commit wire fraud in connection with the alleged scheme to sell fake promissory notes to hedge funds. The complaint adds new details to the alleged fraud that has landed Mr. Dreier in jail without bail on two fraud charges and has led to the bankruptcy filing of his law firm, Dreier LLP, which once numbered 250 attorneys and represented high-profile sports figures, musicians and other celebrities.


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