A former lawyer with the enforcement division of the Securities and Exchange Commission pleaded guilty Monday to conspiring with a prominent Manhattan lawyer to dupe hedge funds out of tens of millions of dollars.

Robert Miller, 52, of Englewood, N.J., entered the plea to conspiracy and securities fraud charges in a cooperation deal with prosecutors in U.S. District Court in Manhattan on Monday. If his cooperation is unsuccessful, he could face up to 25 years in prison at a sentencing scheduled for Feb. 5.

Miller admitted conspiring with lawyer Marc Dreier in November 2008 as Dreier sought to sell more than $44 million in fictitious securities to hedge funds.

Miller was a staff attorney in the SEC's enforcement division from about 1983 through 1986. Since then, he has worked as an analyst and money manager at various firms in the securities industry, according to court papers.

A charging document filed with the court said Miller and Dreier managed an investment fund together at various times between 1999 and 2008.

Prosecutors said Dreier last year contacted Miller and offered to pay him $100,000 to impersonate a representative of a Canadian pension plan during a phone call with a New York hedge fund.

They said Miller received a call from representatives of the hedge fund the day after he agreed to do it. Prosecutors said Miller received the call on a cell phone Dreier gave him with a Canadian area code and phone number.

The government said Dreier wired $100,000 into Miller's bank account shortly after Miller impersonated the Canadian pension fund representative, discussing the guarantee that the pension plan had supposedly issued for the $44.7 million note.

It said Miller also in two separate phone calls impersonated a representative of an Icelandic hedge fund that was supposedly selling a financial note. Court papers said Dreier directed an assistant at his firm, Dreier LLP, to look up weather in Reykjavik, Iceland, so Miller was better prepared for the calls. Continued...