Second Arrest Announced in Fraud Case

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NEW YORK – Prosecutors have announced a second arrest in the fraud case facing a prominent Manhattan lawyer accused of duping hedge funds into making bogus investments.

Broker Kosta Kovachev was charged Tuesday with wire fraud in a criminal complaint unsealed in federal court in Manhattan. It was not immediately clear who will represent him in court.

The complaint accused Kovachev of posing as the comptroller for a developer whose offices were used to convince a hedge fund to buy a worthless investment.

Earlier this month, lawyer Marc Dreier was accused of causing losses of at least $380 million by scamming hedge funds into buying the worthless securities.

As the head of Dreier LLP, Dreier commanded more than 200 attorneys.

He remains jailed without bail.