Thursday, May 25, 2006
Kirk Wright has been accused of causing loses -- or looting -- of over $100 million in hedge funds he managed, and to this point the government has only been able to recover approximately $150,000, not counting the $28,000 in cash on him when he was found. Wright was arrested at the Ritz-Carlton in Miami on a warrant issued after the filing of a single-count criminal information alleging securities fraud in the Northern District of Georgia, and will be returned to Atlanta to face what will likely be a multi-count indictment. A U.S. Magistrate set bond at $1 million, and according to a South Florida Sun-Sentinel story (here), prosecutors plan to appeal the bond decision on the ground that Wright is a flight risk. He will remain in jail until the initial appeal to a district judge is decided. While the Bail Reform Act does not permit a court to set a bond so high that it effectively keeps a defendant in jail, courts are permitted to require a defendant to deposit property with the court or post a surety bond (18 U.S.C. Sec. 3142(c)) to be released, or else remain in jail. In 2005, mutual fund manager Alberto Vilar spent over a month in jail when he was unable to post property to meet a multi-million bond.
Whether Wright will be able to put up $1 million that is untainted by the alleged fraud is another question, but U.S. Magistrate Judge Stephen Brown told Wright that "[i]f you're going to hide and you're going to flee, the Ritz-Carlton in South Beach is not the place you want to go." I can think of a lot worse places than a Ritz-Carlton to hide out, although perhaps a location outside the United States might have been just a bit more effective, if one were to flee. (ph)