|Florida money manager pleads guilty to fraud charges||| Print ||
|Written by DAVID B. CARUSO,Associated Press Writer|
|Wednesday, 24 February 2010 15:13|
NEW YORK (AP) — A Florida hedge fund manager who bilked millions of dollars from investors, then briefly disappeared as investigators closed in, pleaded guilty to securities fraud Wednesday.
Arthur Nadel, 77, apologized for his conduct as he entered the plea before a federal judge in Manhattan.
"I am profoundly sorry for what I have done," he told the judge. He said he understood the rage of his victims, who lost $162 million. "I want them all to know I will carry this burden with me every day for the rest of my life."
Federal sentencing guidelines call for Nadel to serve as much as 24 years in prison, although that number could be lower when he is sentenced in June.
Nadel has been in a federal jail since his arrest, unable to make bail, which was revoked Wednesday after he pleaded guilty.
The terms of the plea bargain allow Nadel's family to keep a home in Sarasota, Fla., but allow the government to seize up to $162 million in other assets, including Nadel's shares in investment entities that own hundreds of acres of land, homes, and a company that owns airplanes.
Nadel grabbed headlines last winter when he vanished as investigators scrutinized his business dealings.
He traveled the country for two weeks, but kept in touch with his family with a series of remarkable letters in which he confessed his crimes and commented on news reports about his cross-country flight.
In one, he worried he'd be labeled a "mini-Madoff," referring to convicting Ponzi swindler Bernard Madoff, now serving a 150-year prison sentence.
Nadel also mused on the possibility of a tell-all book deal, and urged his wife: "Sell the Subaru if you need money."
Prosecutors said Nadel managed a series of funds that took in $392 million from investors, but lost $162 million in bad stock and real estate deals as the markets soured.
Losing money isn't illegal, but lying about it is, and prosecutors said Nadel covered up his poor performance by giving investors grossly inflated returns claiming big profits.
The Securities and Exchange Commission has also filed securities fraud charges against two of Nadel's business partners, Neil and Christopher Moody, claiming they gave materials to investors that overstated the value of three hedge funds.
The pair have said that they were misled by Nadel.