New York (HedgeCo.net) – Former hedge fund manager Arthur G. Nadel has pled guilty to 15 counts of securities fraud, mail fraud, and wire fraud, the US attorney for the southern district of New York said.
The indictment claims that from 1999 through January 2009, Nadel perpetrated a Ponzi scheme to defraud investors in six different investment funds, consistently loosing money and using his investor money to fund his lifestyle and several businesses, including a real estate project in North Carolina, his wife’s flower shop, and his purchase of several private planes.
From 1999 through January 2009, nearly 250 people invested more than $397 million with his funds. Nadel received tens of millions of dollars in management fees and performance incentive fees. As a result of Nadels’s Ponzi scheme, investors suffered losses of approximately $162 million, the Govenment said.
The hedge fund manager pleaded guilty to six counts of securities fraud, one count of mail fraud, and eight counts of wire fraud, and faces a maximum penalty of 20 years in prison on each of the counts.
Nadel faces a maximum fine of $5 million or twice the gain from the offense, whichever is larger. For the mail fraud and wire fraud charges, he faces a maximum fine of $250,000. Nadel is scheduled to be sentenced by Judge Koeltl on June 11, 2010.
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