Kosta S. Kovachev
Kosta S. Kovachev was the son of two doctors who emigrated from Serbia in 1964 and setup practices in New York City. He was born in Belgrade, educated at Columbia University and Harvard Business School, and joined Morgan Stanley in 1987. He left there after five years for a succession of smaller obscure firms, then voluntarily giving up his broker’s license in 2002. In 2006, he lost his broker's license from the National Association of Securities Dealers after being implicated in a $28 million Ponzi scheme. He refused to cooperate with investigators then and eventually paid more than $350,000 penalties and interest to settle the matter, without admitting wrongdoing. Dreier was Kovachev's lawyer during that case.
Kovachev had no real address (address on his driver’s license is a defunct post office box in Florida) and no formal job. His cellphone bills went to the Harvard Club. Twice divorced, he had a grown son in the US Navy from his first marriage, and five other children from a second marriage. He had known Dreier for at least a decade by 2008. While not an employee of Dreier L.L.P., Kovachev had an electronic pass to the 499 Park Avenue office including its computers and offices.
On December 4, 2008, while Dreier was in a Canadian jail attempting to move cash out of the law firm’s accounts, Kovachev appeared at the law firm to pick up three paintings. There were only two paintings, and Mr. Kovachev took them and left.
On March 31, 2010, at a hearing before U.S. District Judge Naomi Reice Buchwald in Manhattan, Kosta S. Kovachev, 58, was sentenced to 46 months in prison and a fine of $215,000 (the amount Dreier paid him for the impersonations). On November 2, 2009, he pleaded guilty to commit securities fraud and wire fraud, as well as a wire fraud charge, and admitting to impersonating an accountant for Solow Realty & Development at Mr. Dreier's request in a meeting with investors at their Manhattan offices; and then, impersonating Solow's then-Chief Executive, Steven Cherniak at Mr. Dreier's request in a separate phone call with investors. He had been arrested in December 2008. He will forfeit his services payment from Dreier for the caper: $215,000. Sentencing of upwards of five years is scheduled for March 5, 2010, along with more than $100 million in restitution.
On April 22, 2009, Kovachev had been arraigned on new charges: conspiracy to commit securities fraud, securities fraud and wire fraud, adding a forfeiture allegation seeking to obtain money placed by Kovachev in four different bank accounts. Kovachev had waived indictment and entered a plea of not guilty. Kovachev was paid $115,000 from the Dreier firm’s operating account and $100,000 from its attorney trust account.
The Case Number, dated December 18, 2008 is: USA v. Kosta S. Kovachev, 08 MAG 2792.
Read more about this topic: Marc Stuart Dreier, Criminal Fraud Case