Sunday, 24 July 2016
Last updated 1 day ago
Feb 24 2010 | 1:21pm ET
Accused hedge fund fraudster Arthur Nadel will plead guilty to defrauding investors of $168 million.
Nadel, the founder of Scoop Management, has made a deal with prosecutors and will enter his plea today in New York. He is charged with 15 counts of securities, wire and mail fraud, and faced up to life in prison.
The 77-year-old has previously pleaded not guilty and vowed to vociferously defend himself against the charges. But he has been jailed in New York since his arrest last January and has failed in several efforts to win bail; prosecutors argued that he was a flight risk because he disappeared for two weeks after his hedge funds collapsed.
According to prosecutors, Nadel ran a Ponzi scheme for 10 years, raising more than $350 million from investors. At the time of the funds’ collapse, Nadel claimed they managed more than $360 million, when they actually have only $125,000 in the bank. He is also accused of misleading investors about hedge fund returns, claiming double-digit increases despite huge losses.
His public defender, Mark Gombiner, said a guilty plea today is “anticipated.”
“It’s pursuant to a plea agreement,” he told Bloomberg News. “It’s for all the counts in the indictment.”
The impending guilty plea is no surprise: Last month, Gombiner told U.S. District Judge John Koeltl that the two sides were talking and that a “disposition” before trial—set to begin in April—was “very likely.”