TAMPA — Chained at his waist and wrists, Sarasota hedge fund manager Arthur Nadel was taken into federal court Tuesday in Tampa after being on the lam for two weeks.
The hearing came hours after Nadel turned himself in to FBI officials on wire and securities fraud charges.
Nadel, 76, is accused of defrauding investors out of hundreds of millions of dollars. He will remain in the custody of U.S. Marshals at least until a bond hearing Friday.
One of Nadel’s attorneys, Barry Cohen, referred to his client’s alleged crimes as “a white-collar matter” and asked U.S. Magistrate Judge Mark A. Pizzo that he be released on his own recognizance.
“Let him out and stay home and on house arrest,” Cohen said. “This is not a violent person. As soon as he learned of the warrant he came in. He’s not going anywhere . . . three days in a cage is a long time to be locked up.”
Cohen said his client has been suffering from emotional problems and had met with a psychologist in the past week.
But Pizzo refused to release Nadel.
“The amount of money in this matter is not small change,” Pizzo said. “It’s significant.”
Federal prosecutor Terry Zitek argued that Nadel, who fled the area on Jan. 14 and whose car was found at the Sarasota-Bradenton International Airport, was a flight risk.
Zitek asked that the bond hearing be postponed until Friday because he was standing in for prosecutors with the Southern District of New York.
Zitek said he had just been made aware of Nadel’s surrender Tuesday morning and needed to discuss the matter with FBI agents from New York and Sarasota.
Nadel, dressed in a gray argyle cardigan, trousers and silver-rimmed glasses, huddled with Cohen and two other attorneys at the table. Nadel’s wife, Peg, was in the courtroom and began to cry when authorities escorted him in.
Following the hearing, Cohen declined comment as he exited the courtroom with Nadel’s wife and other family members.
Outside the courthouse, reporters asked where Nadel had been the past two weeks. Cohen replied, “He turned himself in, didn’t he?”
Nadel is charged with one count of securities fraud and one count of wire fraud by the Securities Exchange Commission. For the combined charges, Nadel faces a maximum of 40 years in prison and more than $5 million, or twice the gross gain or loss from the offenses, in fines.
In all, more than $300 million is thought to have been lost in a Ponzi scheme, whereby Nadel reported inflated returns to investors when his funds were actually losing money, authorities say.
Last year, Nadel signed checks totaling more than $1 million from the funds to himself and his wife, according to Burton Wiand, the federally appointed receiver in the case.
Wiand also found evidence that another $685,000 was transferred to Nadel and his wife in 2003 and 2004.
“In short, it is apparent in the documentation that large quantities of money were diverted from the Hedge Funds to Nadel and Mrs. Nadel,” Wiand said in his report. “Indeed, to date we have not uncovered any source of income for Nadel or his wife that was not in some manner funded with money from the scheme.”
Email Story
Printer Friendly 
Quick Job Search
@Nyx.replyAnswerText@