Tuesday, 2 September 2014
Last updated 9 min ago
Jan 28 2009 | 2:09am ET
Arthur Nadel, the Florida hedge fund manager accused of defrauding investors of more than $300 million, was ordered held in jail at least until Friday after surrendering to authorities yesterday.
A shackled Nadel appeared before a U.S. Magistrate Judge Mark Pizzo in Tampa, Fla., who scheduled a bail hearing for him on Friday. Nadel, who has already been sued by the Securities and Exchange Commission for allegedly running a Ponzi scheme, has been charged with securities and wire fraud by the federal prosecutors in New York.
The Scoop Management chief disappeared on Jan. 14, during a week in which he allegedly supposed to pay out $50 million to investors. Like convicted hedge fund fraudster Samuel Israel, he left a reported suicide note.
According to the criminal complaint against him, unsealed in Manhattan federal court yesterday, Nadel’s downfall came about in part due to that of Bernard Madoff. Nadel allegedly agreed to appoint an independent auditor for his six funds—after years of refusing to do so—after an unnamed partner pushed for one in the wake of the scandal surrounding Madoff’s alleged $50 billion Ponzi scheme. Nadel quit town just six days after acceding to the request.
At today’s hearing, Nadel’s lawyer did not say where his client went during his two weeks on the run. Barry Cohen said his client had emotional problems and planned to check into a hospital until he learned that there was a warrant out for his arrest.
Still, the judge rejected Nadel’s bid for release on his own recognizance, noting pithily, “the money in this matter is not small change.”
The complaint offered further other new nuggets of the federal case against Nadel. Employees of Sarasota, Fla.-based Scoop apparently found a letter Nadel wrote to his wife, Peg, in a shredder at the firm’s office.
“The avenues to money for you will likely be blocked soon,” Nadel allegedly wrote. “Withdraw as much as you can. Sell the Subaru if you need money.”
Nadel also referred to a “package” of recently-paid bills that included “enough documents that I think will do the trick to give you complete control and ownership of what is left, and even documentation for divorce.”
Aug 25 2014 | 11:21am ET