Arthur Nadel Pleads Not Guilty

A jailed Florida hedge fund manager pleaded not guilty on Thursday to an indictment of running a $360 million investment fraud and his lawyer asked a judge to ease the conditions for him to make bail.

Prosecutors say Arthur Nadel, 76, went on the run for two weeks in January before his arrest on initial charges, but his lawyer said he is in poor health and not a flight risk.

Nadel's funds, one of several purported swindles that unraveled in the financial industry meltdown and after the high-profile Bernard Madoff scandal, enriched him and defrauded 350 clients who invested more than $360 million, the government said.

Judge John Koeltl in U.S. District Court in Manhattan heard Nadel plead not guilty to 15 charges in an indictment filed on Tuesday, including securities, mail and wire fraud.

If found guilty, Nadel will spend the rest of his life in prison. Each charge carries a maximum sentence of 20 years imprisonment.

Properties in Florida, North Carolina and Georgia and an aircraft company in Georgia are among the assets the government wants Nadel to forfeit.

Nadel pleads not guilty to $360m investment fraud

Hedge fund manager Arthur Nadel has pleaded not guilty to a 15-count indictment accusing him of orchestrating a $360 million investment fraud.

Federal prosecutors contest that Mr Nadel engaged in securities fraud, wire fraud and mail fraud to dupe 350 investors into handing over their money.

According to the government's complaint, the hedge fund manager collected millions of dollars in fees by misrepresenting the historical returns and assets of the funds under his control.

Investors are said to have been misled by the alleged fraud for the last ten years.

Mr Nadel is currently in custody as he cannot meet the conditions of his $5 million bail. Judge John Koeltl scheduled a hearing for June 4th to hear arguments over the bail conditions.

Defense attorney Mark Gombiner said he would dispute the government's contention that Mr Nadel represents a flight risk.
The hedge fund manager went missing when he was initially charged with fraud by the Securities and Exchange Commission. He turned himself in two weeks later in Florida.

Grand Jury Indicts Hedge Fund Manager Nadel

A U.S. grand jury indicted jailed Florida hedge fund manager Arthur Nadel on 15 charges of running an investment fraud amounting to about $360 million, according to court documents released Tuesday.

Nadel, who is jailed in New York because he has not been able to meet conditions for a $5 million bail, was on the run for two weeks in January before his arrest on the initial charges, according to prosecutors.

Sarasota, Florida-based Nadel, 76, was indicted on securities, mail and wire fraud charges that prosecutors said stemmed from a 10-year-long scheme to bilk investors. They said in court papers that he created false and fraudulent client account statements.

More than 350 clients invested more than $360 million with six of Nadel's funds and he received tens of millions in fees, the government said.

Nadel Investor to Return Money

A trust that pocketed just over $300,000 in false profits -- payouts that exceeded the original investment -- has volunteered to return 90% of the money in an agreement with a court-appointed receiver.

Unable to post $5 million bail, Nadel, 76, is awaiting indictment in the Metropolitan Correctional Center in New York City. He faces up to 40 years in prison if convicted on federal securities fraud and wire fraud charges.

more at

http://www.heraldtribune.com/article/20090424/ARTICLE/904241025/2055/NEWS?Title=Nadel-investor-to-return-money

Arthur Nadel Surrenders to FBI

Fugitive financier Arthur G. Nadel surrendered Tuesday in Tampa to face federal charges that he stole millions of dollars through a Sarasota hedge fund operation. Nadel was charged with two counts of securities fraud and wire fraud, accused of launching a scheme at least five years ago that bilked up to 600 investors from here and across the nation. Nadel, 76, boasted of running hedge funds that were worth $342 million. But in fact, the funds were valued at less than $1 million when Nadel fled Sarasota on Jan. 14, unable to come up with $50 million investors had demanded.

Arthur Nadel, Money Manager, Missing In Florida

The F.B.I. and securities regulators have joined the investigation of Arthur Nadel, a Florida hedge fund manager who disappeared four days ago, leaving clients concerned that they might have lost as much as $350 million.

The Federal Bureau of Investigation and the Securities and Exchange Commission are helping on the case, police Lt. Stanley Beishline of Sarasota, Fla., said in a telephone interview.

One of Mr. Nadel’s business partners, Neil Moody, said Mr. Nadel had spoken to his wife, Peg, since he was reported missing. Mr. Nadel, 76, is president of Scoop Management in Sarasota, which oversees funds that include Valhalla Investment Partners. Mr. Moody holds no position in Scoop Management and was a partner with Mr. Nadel only on the Vahalla fund and two Viking funds.

Scoop’s claim to have managed as much as $350 million “may be high because performance results were exaggerated,” Mr. Moody said in an interview. Mr. Moody said he did not know anything was wrong until Mr. Nadel was reported missing.

more at

http://www.nytimes.com/2009/01/19/business/19sec.html