A former Credit Suisse trader facing trial on charges of fraudulently selling $1 billion worth of mortgage-backed auction-rate securities, has been arrested after two months on the run, according to a court document made public on Wednesday.

The arrest of Bulgarian national Julian Tzolov, who escaped from house arrest in New York and electronic monitoring on May 9, came as a new indictment was unsealed against him and a former colleague Eric Butler.

The government writes to inform the court that the defendant (and fugitive) Julian Tzolov has been apprehended, a letter signed by Benton Campbell, U.S. Attorney for the Eastern District of New York said.

The letter to presiding Judge Jack Weinstein gave no further details.

Butler and Tzolov are scheduled to go on trial in Brooklyn federal court next week.

The new indictment was unsealed in U.S. District Court in Manhattan and charges Butler and Tzolov with 14 counts of wire fraud, citing emails they sent to six companies in Canada, Britain, Switzerland, Bermuda and Panama in the furtherance of the scheme.

The companies were not identified in the court document, which listed emails sent between February 2005 and July 2007 by both traders. Credit Suisse has said both brokers resigned in September 2007 after the firm suspended them for prohibited activity.

(Reporting by Grant McCool; Editing by Richard Chang)

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