A grand jury has indicted a Florida hedge fund manager who disappeared for two weeks before surrendering to face criminal charges.
A grand jury has indicted a Florida hedge fund manager who disappeared for two weeks before surrendering to face criminal charges.
The grand jury in U.S. District Court in Manhattan on Tuesday brought securities, mail and wire fraud charges against Arthur Nadel, already accused of cheating more than 350 clients who invested more than $360 million with six of his funds over a 10-year stretch.
Nadel, 76, of Sarasota, Fla., could face up to 280 years in prison if he is convicted. Nadel remains jailed, unable to put up his $5 million bail. His attorney did not immediately return a call for comment.
Authorities say Nadel disappeared on a two-week jaunt across the country before turning himself in on Jan. 27.
The indictment accused Nadel of lying to prospective clients about the performance and value of his funds.
It said he claimed that he had gained more than $271 million with his funds when he actually had lost money overall.
The indictment said he then created or caused others to create false and fraudulent client account statements to reflect the fictitious profits from 1999 to 2009.
During the span, Nadel received tens of millions of dollars in management fees and performance incentive fees and transferred millions of dollars from accounts held by his investors to accounts held by himself.
Nadel is scheduled to enter a plea to the indictment on Thursday.
Prior to the indictment, Nadel was charged with a single count of securities fraud, though the charge carried a potential penalty of life in prison.
Prosecutors say Nadel's scheme unraveled last year when the economy collapsed and his business colleagues demanded an independent audit of the fund's investments.
The government said Nadel made a cross-country journey between Jan. 14 and Jan. 27, stopping in San Antonio, Texas; Hollywood, Calif.; and San Francisco before returning to Florida.
It said Nadel, while on the run, wrote letters to family members musing about a potential book deal and referring to Bernard Madoff, the disgraced New York money manager accused of orchestrating a $50 billion Ponzi scheme.
In one letter in the court file, Nadel wrote that he appreciated nice things his relatives said about him, adding: "I really anticipated that the press would call me 'Mini Madoff,' honest."
Then he wrote: "My story is pretty sad considering the reasonable alternatives I had."
