Wall Street Journal – Prosecutors said $160 million is unaccounted for in a Ponzi scheme allegedly run by hedge-fund manager James Nicholson.

At a bail hearing Thursday, Assistant U.S. Attorney Maria E. Douvas said the government’s investigation showed that $293 million was invested with Mr. Nicholson, who was president and general partner of Westgate Capital Management LLC. Of that, $160 million is unaccounted for, Ms. Douvas said.

Prosecutors had alleged that Mr. Nicholson, of Saddle River, N.J., falsely represented to investors that the firm had assets under management ranging from $600 million to $900 million.

At Thursday’s hearing, U.S. Magistrate Judge Ronald L. Ellis in Manhattan didn’t change the bail conditions set for Mr. Nicholson — a $10 million personal recognition bond, with five co-signers and secured by three pieces of property. He also would be subject to home detention and electronic monitoring.

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Reuters – A hedge fund manager overstated values by hundreds of millions of dollars, set up a phony accounting firm and showed uniformly positive returns for nine years to defraud investors, U.S. authorities said on Wednesday.

James Nicholson, 42, founder of Westgate Capital Management LLC of New York, was arrested and criminally charged with securities fraud and bank fraud in causing losses of as much as $100 million since 2004, prosecutors and the FBI said.

He appeared in U.S. Magistrate’s Court in Manhattan where a judge set bail of $10 million secured by five co-signors and three properties. The judge ordered Nicholson released when he meets those conditions, but he would be under house arrest with electronic monitoring.

Prosecutor Joshua Klein told the court the purported fraud could effect 372 investors. "There is a potential additional hundreds of millions of dollars involved and we have no idea where that money is," Klein said.

Nicholson’s attorney Ira Sorkin said in court that his client was not a risk of flight and that home detention was sufficient to ensure court appearances.

Sorkin, a veteran securities attorney, represents Bernard Madoff, the once-respected Wall Street trader and investment manager arrested and charged in December with a purported $50 billion global fraud.

Investigators say they have uncovered several frauds across the United States in recent months following the market meltdown.

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