Feds Arrest Another Missing Money Manager

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    NEWSLETTERS

    TK
    Kiselev Andrey Valerevich
    Who's next?

    Another missing money manager suspected of fraud has turned himself in to authorities. 

    Arthur Nadel, a Florida hedge fund manager who disappeared this month just as he was due to pay investors $50 million surrendered in Tampa Tuesday to face federal securities and wire fraud charges, the FBI said.
     
    Nadel was due in federal court later Tuesday afternoon. The FBI did not provide additional details about his surrender or where he has been for the past two weeks. Nadel's attorney, Todd A. Foster, did not immediately respond to a telephone message left with his office.

    Federal regulators last week sued Nadel for fraud, saying he misled investors and overstated the value of investments in six funds by about $300 million. The Securities and Exchange Commission also won a court order freezing his assets.

    A criminal complaint unsealed Tuesday in federal court in Manhattan alleges Nadel has been defrauding investors since 2004.

    Nadel, 76, disappeared Jan. 14 after telling his wife in a note that he felt guilty. He also threatened to kill himself, according to the Sarasota County Sheriff's Office. Police found his green Subaru the next day in an airport parking lot.

    In a lawsuit filed in federal court in Tampa, the SEC said Nadel recently transferred at least $1.25 million from two funds to secret bank accounts that he controlled.

    Two investment companies co-owned by Nadel, Scoop Capital and Scoop Management, agreed last week in a settlement with the SEC to injunctions and an asset freeze. They neither admitted nor denied wrongdoing.

    According to Scoop Management's internal accountant, the six funds have between 500 and 600 investors nationwide. Earlier this month, many were told that the funds were empty. Sarasota investigators have been fielding inquiries from investors from around the country and as far away as France.

    The SEC said Nadel's funds appeared to have assets totaling less than $1 million, while he claimed in sales materials for three of the funds that they had about $342 million in assets as of Nov. 30.

    The materials also boasted of monthly returns of 11 to 12 percent for several of the funds last year, when they actually had negative results.

    The investigation came on the heels of two other high-profile financial fraud cases. Investigators say Wall Street's Bernard Madoff cost investors some $50 billion late last year in what may be the largest Ponzi scheme in history. And Indiana money manager Marcus Schrenker was apprehended in Florida earlier this month after allegedly trying to stage his death in a plane crash as investigators probed his businesses.

    On Monday, the owner of New York investment firm Agape World, Nicholas Cosmo, surrendered to FBI in Long Island. He’s accused of cheating investors of about $140 million.