By Grant McCool

Nadel fled after a partner in his firm told him that following the arrest of accused swindler Bernard Madoff in December, the funds should hire an independent accountant to audit the books, an FBI agent said in a court filing.

Nadel, head of Scoop Management, based in Sarasota, Florida, was accompanied by two lawyers when he surrendered to FBI agents in Tampa, an FBI spokesman said. He was led into a Tampa courtroom in handcuffs and leg shackles for a brief appearance before a U.S. magistrate.

In a fraud complaint filed by the U.S. Securities and Exchange Commission last week, investigators said Nadel had valued the six hedge funds he oversaw at more than $300 million, when in reality they contained less than $1 million.

Nadel was charged with securities fraud in New York because he traded through a brokerage in the city.

The purported fraud is one of several that authorities have announced across the United States following the sharp decline in the fortunes of the financial industry.

Also on Tuesday, the head of a private New York financing firm who was arrested on Monday night has been charged with operating "a classic Ponzi scheme" into which $370 million was invested, U.S. officials said. At a federal court hearing in Central Islip, N.Y., a judge ordered Agape World Inc CEO Nicholas Cosmo held until another hearing on Thursday.

The biggest by far involves New York investment manager Madoff, who authorities said confessed to running a Ponzi scheme over many years with losses of $50 billion. A Ponzi scheme is one in which early investors are paid with the money of new clients.

A criminal complaint filed in U.S. District Court in Manhattan linked Nadel's decision to flee to the Madoff case.

FBI agent Kevin Riordan said that an unidentified partner of Nadel's "informed me that, following the arrest of Bernard L. Madoff by the FBI in New York and the subsequent publicity ... Partner I again told Nadel that (the funds) had to hire an independent certified public accountant to conduct an audit."

The document said that on January 8 Nadel agreed to the audit but by January 14 he was reported missing by his family after leaving a suicide note "reflecting that he was no longer going to be around."

Nadel was charged with securities fraud and wire fraud related to his funds from around 2004 until at least January 14 this year. His assets have been frozen by court order.

In December 2004, Nadel's funds held assets valued at about $125 million, according to the complaint, but that had dwindled to less than $150,000 by last month.

The complaint contains excerpts of a handwritten letter from Nadel, 76, to his wife. It says the letter was found by Scoop employees in an office shredding machine.

"The avenues to money for you will likely be blocked soon," the letter quoted in an affidavit said. "You must use the trust (yours) to your benefit as much and as soon as possible."

In the Tampa court hearing, Nadel spoke only briefly, answering "Yes, I do" when Magistrate Mark Pizzo asked if he understood the charges.

Prosecutors said Nadel was a significant risk to flee but his lawyer, Barry Cohen, asked the judge to let Nadel go home until a bail hearing on Friday.

"This is not a violent person. He came in, he's shown good faith," Cohen argued. "He's suffering from some emotional problems. He's not going anywhere."

The complaint said Nadel owned two general partnerships: Scoop Management and Scoop Capital LLC. An unidentified partner created two other partnerships called Valhalla Management and Viking Management LLC.

One investor, Larry Collier of Sarasota, Florida, said he was glad to hear Nadel was in custody.

"At least we'll find out what happened to the money, whether it's a Ponzi scheme or he just lost it," said Collier, whose last statement indicated he had $670,000.

Investor Tony Hagar, 68, who lost $1.5 million, said Nadel should be "taken out of circulation" and regulators needed to increase fund oversight.

(Additional reporting by Robert Green in Tampa and Jim Loney in Miami; Editing by Andre Grenon)