updated 12/11/2008 1:36:30 PM ET 2008-12-11T18:36:30

A prominent attorney was ordered jailed without bail Thursday after a federal prosecutor estimated losses of $380 million in an alleged hedge fund fraud.

Magistrate Judge Douglas Eaton denied bail for Marc Dreier, whom prosecutor Jonathan Streeter called a "Houdini of impersonation."

Streeter said Dreier was "in a desperate situation and the only way out of the desperate situation is to flee."

"His life has completely unraveled," said the prosecutor, adding that the fraud has been going on since at least 2006 and Dreier had duped "some of the most sophisticated investors in the world."

Dreier had traveled extensively in the last year and had contacts abroad where money might be hidden, said Streeter.

Dreier's lawyer, Gerald Shargel, who calls the case "very complicated," had sought a $10 million bail package with electronic monitoring.

The scandal has stunned Dreier LLP, a mid-size law firm that has represented celebrities, including retired football star Michael Strahan and former News Corp. publishing executive Judith Regan.

Dreier LLP partner Joel Chernov said in court papers that many lawyers have left the firm, rent is overdue and BlackBerry service is being terminated. He says $27 million appears to be missing from the firm's escrow accounts.

Dreier also is charged in Toronto with impersonation in connection with the attempted sale of $45 million of notes to a hedge fund.

Streeter cited "over $380 million actual loss."

"There's a large amount of money completely unaccounted for," said Streeter, who did not elaborate further.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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