Calif. Hedge Fund Fraudster’s Bail Upheld

Oct 2 2009 | 2:31am ET

An accused California hedge fund fraudster can be freed on bail, a judge has ruled. Matthew La Madrid, accused of running a $30 million Ponzi scheme, can be released on $300,000 bail, despite the protests of prosecutors.

La Madrid’s Plus Money allegedly ripped approximately 300 investors off, promising to invest their money in a covered-call options-trading strategy. But three years after starting the hedge fund, La Madrid abandoned the strategy and illicitly dispersed the fund’s money, authorities say.

La Madrid faces more than 400 years in prison on the charges, ample reason for him to flee if freed, prosecutors said. But Judge William Hayes upheld the bail set earlier by a magistrate judge. La Madrid’s lawyers pointed to the fact that their client did not flee despite being under investigation for more than a year.

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