Arizona authorities have seized $101 million from a bank account that may belong to a hedge fund being investigated for fraud.
The Arizona attorney general’s office seized the money on May 19 from a Wachovia Corp. account after authorities were alerted that the funds were being moved systematically all over the world -- often an indication of fraud, Atty. Gen. Terry Goddard said Tuesday after media and investors’ lawyers began inquiring about the money.
Prosecutors’ inquiries into the source of the money were met with “artful stories,” including one involving an Arizona gold mine, Goddard said.
Since the seizure, several claims of ownership have been made including one by Majestic Capital Management, the account holder, and Bayou Management, a hedge fund based in Stamford, Conn., which is being investigated by officials in that state.
“I’m not making any suppositions about whether it’s connected to Bayou. I want to make that very clear,” Goddard said of the seized money.
Bayou officials could not be reached for comment Tuesday. Voicemail boxes at the company were full.
Investors received a July 27 letter from the fund’s founder, Samuel Israel III, announcing that the Bayou Family of Funds would return their money and shut its doors, but investors said they have not received refunds.
Stamford police say one of the investors a few weeks ago found a suicide note written by Daniel Marino, Bayou’s chief financial officer, alluding to fraud at the company. Authorities say he was depressed as investors began inquiring about their money. Police took Marino to Stamford Hospital, where he underwent a psychological evaluation and was released, authorities said.
Israel and Marino remain under investigation.