Welcome to CanadianHedgeWatch.com
Tuesday, September 28, 2021

Florida Fund Manager Plotted to Flee for Months: Prosecutors


Date: Friday, February 13, 2009
Author: Grant McCool, Thomson Reuters.com

An accused Florida hedge fund manager who disappeared in January as his losses mounted as high as $300 million, had planned to flee for months, U.S. prosecutors said on Thursday [Feb. 12] in a move to deny him bail.

The government said in court documents that fund manager Arthur Nadel wrote at least 14 checks worth hundreds of thousands of dollars to himself and sold real estate between October and December last year.

"Nadel started to prepare for his disappearance at least weeks, if not months, before he fled," prosecutors said in a memorandum filed in U.S. District Court in Manhattan, where Mr. Nadel was scheduled to appear on Friday [Feb. 13].

According to U.S. investigators, the funds Mr. Nadel said held more than $300 million actually had less than $1 million, one of a series of purported frauds investigators say they have uncovered across the country as the economy sharply declined.

Thursday's filing by the government was in response to a request by Mr. Nadel's lawyers to release him on bail and into house arrest with electronic monitoring.

"We are familiar with what the [government] filing says and we look forward to addressing it in court tomorrow," said Todd Foster, a lawyer for 76-year-old Mr. Nadel.

Last week, a U.S. magistrate judge in Florida ordered Mr. Nadel held without bail as a flight risk and sent to New York Previous Reuters Story. Mr. Nadel was charged with securities fraud and wire fraud in New York because he traded through a brokerage in the city.

During his two weeks as a fugitive starting Jan. 14, Nadel traveled to San Antonio, Texas; Hollywood; and San Francisco, according to the government brief, which cited faxes Mr. Nadel sent and a credit card record.

"His claim that he did not know he was wanted or a fugitive, that he went away for a few days to think things over belies common sense and the evidence," prosecutors said. "Common sense dictates that Nadel fled to escape from a life behind bars."

The fund manager went missing after partners in his firm told him their funds should hire an independent accountant to audit the books following the arrest of accused Wall Street swindler Bernard Madoff, according to court documents.

Sarasota, Fla.-based Mr. Nadel was a well known philanthropist who headed two general partnerships he created, Scoop Management and Scoop Capital. He controlled six investment funds.

The case is USA v. Nadel, 09-mj-00169, in the U.S. District Court for the Southern District of New York (Manhattan).

By Grant McCool

Grant.McCool@ThomsonReuters.com