He was chained at the waist and wrists when he appeared in court later Tuesday. Attorney Barry Cohen said Nadel is not violent and asked that he be released on his own recognizance. He said Nadel has emotional problems and does not pose a flight risk, but a federal judge ordered him held at least until Friday.
Asked outside court where his client had been for two weeks, Cohen said, "He went away for a while just to be alone." He declined to say where exactly Nadel was, and the FBI did not provide details.
Federal regulators last week sued Nadel for fraud, saying he misled investors and overstated the value of investments in six funds by about $300 million. The Securities and Exchange Commission also won a court order freezing his assets.
A criminal complaint unsealed Tuesday in federal court in Manhattan alleges Nadel has been defrauding investors since 2004.
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Nadel, 76, disappeared Jan. 14 after telling his wife in a note that he felt guilty. He also threatened to kill himself, according to the Sarasota County Sheriff's Office. Police found his green Subaru the next day in an airport parking lot.
In a lawsuit filed in federal court in Tampa, the SEC said Nadel recently transferred at least $1.25 million from two funds to secret bank accounts that he controlled.
Two investment companies co-owned by Nadel, Scoop Capital and Scoop Management, agreed last week in a settlement with the SEC to injunctions and an asset freeze. They neither admitted nor denied wrongdoing.
According to Scoop Management's internal accountant, the six funds have between 500 and 600 investors nationwide. Earlier this month, many were told the funds were empty. Sarasota investigators have been fielding inquiries from investors from around the country and as far away as France.
The SEC said Nadel's funds appeared to have assets totaling less than $1 million, while he claimed in sales materials for three of them that they had about $342 million in assets as of Nov. 30.
The materials also boasted of monthly returns of 11 to 12 percent for several of the funds last year, when they actually had negative results.
An investor in one fund received an account statement for November indicating her investment was worth almost $420,000. In reality, the entire fund had less than $100,000, according to the SEC.