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NY fund manager to admit to fraud-court records
December 7, 2009 / 8:31 PM / 8 years ago

NY fund manager to admit to fraud-court records

* Case came after Madoff publicity

* Nicholson jailed after failing to make bail

By Grant McCool

NEW YORK, Dec 7 (Reuters) - A New York hedge fund manager indicted in April on charges of defrauding investors out of $150 million appears set to plead guilty on Friday, court records show.

James Nicholson, 43, previously pleaded not guilty to an indictment by a grand jury on four charges including securities fraud and investment adviser fraud. He was accused of running a scheme from 2004 until early this year in which he overstated asset values by hundreds of millions of dollars.

An entry in the electronic case record said “a plea will be held in this matter” on Dec. 11 before U.S. District Court Judge Richard Sullivan, an indication that he would plead guilty in Manhattan federal court.

His lawyer, Erika McDaniel Edwards, could not be reached for comment. A spokeswoman for the U.S. Attorney in Manhattan declined to comment.

“The entry definitely suggests that there is going to be a guilty plea entered on that date,” said Anthony Barkow, executive director of New York University’s prosecution center.

“It asks the government to comply with the Justice for All Act, that reflects an impending guilty plea which requires victims to be told that is to happen and they have the right to appear.”

Nicholson, founder of Westgate Capital Management LLC of Pearl River, New York, was arrested and criminally charged on Feb. 25, when the government said the scheme was partly exposed by requests for redemptions after the disclosure in December last year of charges against Bernard Madoff.

Madoff, 71, is serving a 150-year prison sentence for orchestrating an investment fraud involving as much as $65 billion.

Prosecutors said in February that dozens of investors who asked Nicholson for redemptions had their checks returned for insufficient funds.

Nicholson, of Saddle River, New Jersey, is being held in jail because he has been unable to meet bail conditions.

The government is seeking at least $150 million in forfeiture, according to court papers, other money and properties, an interest in a private jet, club memberships in Florida and a seat license for club seats at a new stadium for the New York Jets National Football League team.

The case is USA v Nicholson, U.S. District Court for the Southern District of New York, No. 09-414. (Reporting by Grant McCool)

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