U.S. prosecutors said on Tuesday that two former Bear Stearns Cos hedge fund managers facing trial on fraud charges are trying to impede the government's access to documentary evidence.

Lawyers for the accused denied the allegations.

In a series of filings in Brooklyn federal court in New York over the past week, prosecutors and lawyers for the former managers, Ralph Cioffi and Matthew Tannin, have sparred over what evidence should be admitted at a trial over the 2007 failure of two Bear hedge funds.

Tannin and Cioffi were indicted last year for fraud, and Cioffi was also charged with insider trading. The hedge funds' collapse cost investors $1.4 billion and helped lead to credit crisis and the sale of Bear to JPMorgan Chase & Co . Both men face up to 20 years in prison if convicted.

In a letter filed with the court on Tuesday, the government said that on September 18 Cioffi, without a subpoena or the assistance of counsel, flew to Florida and attempted to obtain original bank documents, which he knew were the subject of a pending government subpoena.

Lawyers for Cioffi said the government made the allegation because it faced evidence that Bear Stearns Asset Management had vetted and approved Cioffi's pledge of interests in one fund as collateral for a loan on a Sarasota, Florida, condominium he was building,

The government threw out yet another baseless allegation, Cioffi's lawyers wrote to U.S. District Judge Frederic Block. It is preposterous for the government to suggest that it was 'obstruction' for Mr. Cioffi to seek a copy of bank records that vindicate him.

Prosecutors cited Cioffi's Florida trip as part of their arguments in court papers that the disappearance of both men's trading notebooks and other evidence was not a coincidence. They originally referred to the notebooks in court documents last week.

In Tuesday's letter, the government said Cioffi's trip, the missing notebooks and other actions by the two men provide further evidence of the defendants' efforts to impede the government's access to documentary proof.

A spokesman for Tannin's lead lawyer, Susan Brune, said lawyers were reviewing the document and had no immediate comment.

On Monday, Brune wrote to the judge that a government allegation that Tannin erased an email account was an eleventh-hour smear before trial.

The case is U.S. v. Cioffi and Tannin 08-415 in U.S. District Court, Eastern District of New York (Brooklyn).

(Reporting by Grant McCool and Jonathan Stempel; editing by John Wallace)

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