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Nadel Bail Battle Resumes Today

Date: Friday, October 23, 2009
Author: FINalternatives.com

Accused Ponzi schemer Arthur Nadel will once again attempt to win his release from jail today, eight months after his arrest on charges of running a $400 million hedge fund fraud. But prosecutors are doing all they can to keep Nadel right where he is.

In a detailed response to the bail bid made by Nadel’s public defender last month, the government warned U.S. District Judge John Koeltl that Nadel, who surrendered after disappearing for two weeks in January as his alleged scam collapsed, remains a flight risk.

In particular, prosecutors took aim at defender Mark Gombiner’s argument that the 76-year-old is too frail to flee and that he has “no desire whatsoever to flee.”

“Nothing in Nadel’s medical reports suggests that he is incapable of fleeing and/or moving from one place to another,” Assistant U.S. Attorney Reed Brodsky told the judge in a filing earlier this week. “Nadel’s conduct has demonstrated that he has the skills and ability to be exceptionally deceitful, brazen, creative and resourceful in achieving his criminal goals. Nadel has the ability and experience to flee should he decide that he does not want to face life in prison.”

Nadel is accused of defrauding investors in six hedge funds he managed of $168 million. According to prosecutors, he “earned” $65.5 million, after taxes, in fees during the scheme, but that only $16 million has been recovered.

Gombiner has said that Nadel’s incarceration is preventing him from assisting in his own defense. He has suggested that Nadel be released on $1 million bond secured by his wife’s Sarasota, Fla., home, with the condition that he remain in New York and be subject to electronic monitoring. Nadel has thus far been unable to meet his current bail terms, which require four co-signers for the bond. He had been able to find just two.

All the more reason to keep him locked up, wrote Brodsky. “The community that knows him best does not trust him.”

But that’s not all the government objects to: Brodsky noted that 139 electronically-monitored people have fled anyway, and that even the two people he’s managed to convince to sign his bond aren’t good enough. Brodsky said that Nadel’s wife, Peg, worked on his allegedly fraudulent businesses and may have obstructed the investigation, and that his stepdaughter is not “financially responsible.”