February 10, 2009 / 8:35 PM / 11 years ago

Jailed U.S. fund manager Nadel to seek bail

NEW YORK, Feb 10 (Reuters) - A jailed Florida hedge fund manager, who fled as investors learned their accounts were nearly worthless, will seek to be released on bail when he faces securities fraud charges in New York, his lawyer said.

Arthur Nadel, 76, was being held on Tuesday in a Federal Bureau of Prisons center in Oklahoma City, Oklahoma, after being taken from a Florida county jail on Friday, according to county and prison records.

Last week a U.S. magistrate judge in Florida ordered Nadel held without bail as a flight risk and sent to New York. Nadel was charged in New York because he traded through a brokerage in the city.

“We are planning to seek a review of the detention order in New York,” said Nadel’s lawyer, Todd Foster.

He said it was not clear when Nadel would be flown to appear in U.S. District Court in Manhattan, where he was charged with securities fraud and wire fraud. The office of the federal prosecutor declined comment.

According to U.S. investigators, the funds that Nadel said held more than $300 million actually had less than $1 million.

Nadel went missing in January after a partner in his firm told him the funds should hire an independent accountant to audit the books following the arrest of accused Wall Street swindler Bernard Madoff.

Nadel was a well known philanthropist who headed two general partnerships he created, Scoop Management and Scoop Capital. He controlled six investment funds: Victory, Victory IRA, Scoop Real Estate, Viking, Viking IRA and Valhalla Investment Partners.

The Sarasota, Florida-based investment adviser went missing on Jan. 14 as investors learned their accounts were nearly worthless, one of a series of frauds investigators say they have uncovered across the United States in the market meltdown. Nadel surrendered to FBI agents in Tampa two weeks later. (Reporting by Grant McCool; editing by John Wallace)

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