Update, Aug. 8, 2012: This review initially ran in December after a festival screening. The film begins its run on the Showtime network Aug. 8.

What prevents a person facing dire financial circumstances from crossing the line into fraudulent and criminal behavior in order to get his head above water? Is it really virtue, or is it more likely a lack of opportunity and a fear of getting caught?

That's the type of question stewed over by Marc Dreier, the founder and former head of Dreier LLP, in the entertaining and insightful new documentary Unraveled by Marc Simon. The director, a successful lawyer once mentored by Dreier at the defunct firm, filmed Dreier in the last few months of house arrest in his upscale Manhattan apartment before he was sent of to federal prison in Minnesota.

"The line is presented to very few people," Dreier says in the film.

Dreier decided to cross that line in 2002 when faced with mounting debts from his expanding law firm, which eventually employed 250 lawyers, and a lavish lifestyle that included his $10 million Manhattan home, a $12 million Hamptons getaway, a $200,000 Astor Martin, an $18 million yacht and tens of millions of dollars in artwork.

As has been documented in the news coverage of his case, including a 60 Minutes feature, Dreier sold more than $700 million of fake promissory notes to investors, mainly hedge funds, for real estate developments that never existed. He was eventually arrested in 2008 in Toronto, where he had tried to pass himself off as a lawyer for a pension fund as part of another scheme to sell more fake notes.

Dreier suspected for months that he would be arrested. But he went ahead with his increasingly reckless plans out of a pathetic mix of desperation and resignation.

Unraveled screened in November as part of DOC NYC, a documentary film festival in New York. The film will be released in theaters and video-on-demand in April, and then will be broadcast on Showtime.

In a discussion after the Nov. 9 screening, Simon told attendees that he did not intend to create a sympathetic portrait of his former boss, preferring instead to have viewers decide for themselves. The film does not present interviews with experts, victims or other commentators. Instead, we see Dreier in his Manhattan apartment discussing his life and descent into criminal behavior; watching TV, hanging out and enjoying some final meals with his son; and strategizing with his affable defense lawyer, Gerald Shargel, as they prepare for sentencing. An armed guard is present at all times.

The director also weaves in footage from Dreier’s high-profile past – clips of him dancing at lavish firm parties and hobnobbing with celebrities at the charitable golf tournament he co-sponsored with football star Michael Strahan – as well as bits of animation that cleverly recreate some of Dreier’s fraudulent activities and momentous turns.

In Simon’s portrait, Dreier is not entirely unsympathetic, particularly in his interactions with his son or when he comes close to tearing up when talking about the pain he caused his mother. He also humorously defends his dog (partially pictured above), whom he insists "had nothing to do with it."

At other times, however, he attempts to downplay the severity of his conduct, even wondering aloud how different high-stakes financial fraud is from shoplifting: Does the scope of the theft matter once the decision is made to break the law? Dreier is not convinced. Yet he also cites the scope Bernard Madoff’s fraud to argue that he deserves a much lower sentence of 12 years. (Madoff received 150 years in prison shortly before Dreier’s sentencing date). In one memorable scene, Shargel tells an increasingly frustrated Dreier that attempting to minimize his crimes could have disastrous consequences at the sentencing.

Dreier feels bad about so many people losing their jobs – 800 Dreier LLP employees in total – but he also admits to having felt pride in creating those good, well-paying jobs in the first place, even if they were funded by criminal transactions. Simon captures a man of contradictions in a state of residual shell shock; Dreier feels "like he's talking about someone else" when he discusses the fraud. His mind is churning behind those tired, intense eyes, and it makes for fascinating viewing.

How did Dreier end up in such a mess? Greed certainly plays a part, but Dreier seems to have been more interested in admiration and recognition than his Warhol paintings and yacht. As he tells it, Dreier, a Yale grad who went to Harvard Law School, always imagined himself destined for great things, somebody who should at least be as rich and famous as an elite firm's clients. That's why he refused to be a "paper pusher" lawyer and decided to open his own practice in 1996. He was the only equity partner at Dreier LLP and ran it like a dictatorship, which means he could control the firm's finances without colleagues looking over his shoulder.

By 2002, the firm's finances were wrecked and Dreier did not have the credit to borrow more money. But his clients did. Dreier decided he would pretend to represent one of his existing clients, billionaire developer Sheldon Solow, in fake real estate ventures, selling millions in fake notes to hedge funds and keeping the money for his himself and his firm. He hoped to only do it once, but he never had enough to keep the firm going – and the scheme turned out to be surprisingly easy to carry out, at least at first. Eventually, he was running his firm, his own cases as a litigator and an escalating fraud that required fake financial statements, impersonations and numerous meetings based on false pretenses.

No wonder Dreier is broken, mildly delusional and especially bleak in his view of human nature in the film – but also somewhat relieved, even as he frets over what his sentence might be and whether he'll be able to watch New York Mets games in prison. As it turned out, U.S. District Judge Jed Rakoff ended up agreeing with Dreier that he was no Madoff and gave him 20 years – far less than the 145 years sought by prosecutors.

At the Nov. 9 screening, Simon told viewers that, to him, Dreier's conduct represented both a personal and professional betrayal. As a young lawyer, he looked up to Dreier, and then was one of about 800 firm employees left without a job in an increasingly unforgiving economy.

Simon, at least, has moved on successfully. He is a partner at Cowan, DeBaets, Abrahams, & Sheppard, where he has served as legal counsel for films such as Winter's Bone and The Kids are Alright, and he has made three documentary films. Before Unraveled, Simon directed Nursey University (2009) and After Innocence (2005), which tells the story of men exonerated by DNA evidence.

A trailer of Unraveled is available here.