Accused Florida Ponzi schemer Arthur Nadel will be allowed out of jail on $5 million bond, so long as he meets certain conditions. But according to a report on Reuters.com, Nadel’s lawyer has indicated that he will likely not be able to meet those conditions.
Nadel, whose Sarasota, Florida-based Scoop Management ran six hedge funds, is accused of cheating his investors out of as much as $350 million. Nadel was arrested last month after he had been missing for two weeks. He disappeared on January 14, just a day before he was supposed to deliver a payout of $50 million to his investors.
Though he was arrested in Tampa, Florida, Nadel’s case has been moved to federal court in Manhattan, where he had been held without bail. While in Florida, he had been denied bail for being a flight risk. But yesterday in Manhattan, Judge Denise Cote agreed to set bail for Nadel, and did so in the amount of $5 million.
According to Reuters, Judge Cote’s order requires that the $5 million bond be secured with $1 million in cash and co-signed by four people. Nadel would be confined to his home and must forfeit all private and business property with the agreement of any co-owners, Reuters said.
Nadel’s lawyer told Reuters that for the time being, his client would be unable to meet the conditions set by Judge Cote. The attorney asserted that Nadel did not have the $1 million he needed to secure a bond.
Nadel has been charged with one count each of securities fraud and wire fraud. If convicted, Nadel could face up to 20 years in prison on each charge. In addition, the Securities and Exchange Commission (SEC) has filed a civil suit against Nadel, charging him with securities fraud. According to the SEC, funds Nadel managed appear to have total assets of under $1 million. The complaint says Nadel overstated the value of the funds by $300 million.
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