Bayou Cash Believed to be in Arizona

Arizona authorities have detained $101 million, which was found in a Wachovia Bank account and is believed to be a portion of the missing funds from the embattled Bayou Fund, according to The Wall Street Journal.

The Stamford, Conn.-based hedge fund is accused of a massive fraud in which five Citibank bank accounts were emptied out in just six days. The withdrawals totaled about $161 million, authorities say.

The Citibank accounts held money for all four of Bayou's hedge funds, but most of firms $400 million in assets under management was in a fifth account, under the name of its money-management division, Bayou Management LLC, WSJ reported.

Bayou chief Samuel Israel III and account holder Majestic Capital claim that the money in the Wachovia account belongs to Majestic, whose relationship to the hedge fund is unclear.

Ross B. Intelisano, of the law firm Rich Intelisano, is representing a group of Bayou investors and said his firm is in the midst of requesting a pro-rata share of the funds sized for the investors form the Arizona Attorney General.

In another development, lawyers representing Israel in Phoenix filed a motion to withdraw from the case, citing an inability to locate their client, as well as a lack of information from Israel and the fact that he hasn't paid them.