Nadel Will Seek Bail In New York

Feb 11 2009 | 2:39am ET

Accused hedge fund fraudster Arthur Nadel hopes that judges in New York are more lenient than those in his home state of Florida.

Nadel, who has been charged with defrauding investors to the tune of $300 million, plans to seek bail when he faces a federal judge in the Big Apple. It’s unclear how he’ll fare: Nadel disappeared for two weeks, leaving only days before his alleged Ponzi scheme was uncovered. U.S. District Judge Mark Pizzo in Tampa, Fla., rejected Nadel’s bid for freedom earlier this month, noting that he was unable to put up a significant bond and that “there is a quantifiable risk and simple house arrest with electronic monitoring doesn’t resolve the matter.”

“We are planning to seek a review of the detention order in New York,” Nadel’s lawyer, Todd Foster, told Reuters.

Nadel is currently at a federal prison in Oklahoma City, where he was taken from a Florida county jail on Friday. It is unclear when he will make his way to New York to face federal securities and wire fraud charges.

He has also been accused by the Securities and Exchange Commission of telling investors the six hedge funds he ran were worth $300 million when in fact they had less than $1 million in assets. Nadel managed three of the funds for his own Scoop Management and the other three as a subadviser for Valhalla Management and Viking Management, and collected some $95.5 million in management, advisory and incentive fees from 2003 to 2008. He is also accused of transferring at least $1.25 million from two funds to a secret bank account he controlled.

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