By LARRY NEUMEISTERAssociated Press Writer
NEW YORK - A Florida hedge fund manager accused of bilking investors of up to $350 million told family members he expected to be labeled a "mini-Madoff" after disappearing on a two-week jaunt across the country before turning himself in, court documents filed Thursday show.
Between Jan. 14 and his Jan. 27 surrender, Arthur Nadel stopped in San Antonio, Texas; Hollywood, Calif.; and San Francisco before returning to Florida, Assistant U.S. Attorney Reed M. Brodsky said in the documents.
While on the run, Nadel wrote letters to family members musing about a potential book deal and referring to Bernard Madoff, the disgraced New York money manager accused of orchestrating a $50 billion Ponzi scheme, Brodsky wrote.
Brodsky urged a judge to hold Nadel without bail until trial, saying the 76-year-old's exploits before and while he was on the run show he will remain a risk to flee. Nadel, charged with one count of securities fraud, is being held at a lower Manhattan lockup.
Nadel's overall conduct shows he was "exceptionally deceitful, brazen, creative and resourceful in achieving his criminal goals," Brodsky said.Nadel's lawyer did not immediately return a telephone call.
Nadel likely fled last month because he knew he could face life in prison if convicted of charges stemming from the disappearance of between $200 million and $350 million of investor money in six different funds he managed, Brodsky said.
Over the past 10 years, Nadel defrauded hundreds of investors by falsely claiming he was a successful attorney and trader, only to spend their millions on a lavish lifestyle, the government said.
The government has "serious concerns" about the whereabouts of $20 million Nadel wired out of his investment funds from Jan. 1, 2008, through Jan. 21 of this year, Brodsky said.
Prosecutors said the scheme unraveled last year when the economy plunged and Nadel's business colleagues demanded an independent audit of the investments after Madoff's December arrest. Madoff has not entered a plea in his case.
Nadel told the FBI after his arrest that he had been "on vacation" during his disappearance, Brodsky said. But letters Nadel sent to family members while on the run showed he was reading newspaper accounts of his conduct and disappearance, Brodsky said.
He said the letters reflected a "cavalier attitude about the crimes that he committed and his disappearance."In one letter entered in the court file, Nadel wrote that if "this works out, you can also find me a literary agent" before signing it "The `disappeared' Art."
In the same letter, Nadel wrote that he appreciated nice things his relatives said about him, adding: "I really anticipated that the press would call me `Mini Madoff,' honest."
Then he wrote: "My story is pretty sad considering the reasonable alternatives I had."In another letter, Brodsky said, Nadel wrote: "I just need to know that I will get a fair shake in counting all those trading losses, and not painting me a complete villain."
The day after Nadel received a letter from his business partners about hiring the auditor, he left a note for his wife saying the "funds did not reflect their true performance" and that there "will be many people who would like to kill me, but you can assure them that I will do the job myself," Brodsky said.
Brodsky said evidence against Nadel includes letters to investors in which he claimed positive returns, written confessions to relatives and others about his fraudulent representations, trading records showing his investment claims were false, wire transfers showing he stole investor money for personal use and investors' testimony that he lied to them.
"Nadel's greed and self-indulgence destroyed the life savings of many investors and, in turn, their trust and confidence in our capital markets and other people," Brodsky wrote.
He said Nadel's suicide threat to his wife was another attempt at deception, noting that Nadel appeared to have planned for his flight by making at least 14 withdrawals totaling about $166,000 in the weeks before he disappeared.