BAILEY IN HOT WATER

Wednesday March 31, 1999 12:00 AM EST

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Federal prosecutors have filed a motion in an Orlando, Fla., federal court against noted attorney F. Lee Bailey, asking that he be ordered to surrender $2 million from the assets of imprisoned infomercial king William McCorkle and his wife Chantal or be held in contempt of court. Prosecutors maintain Bailey helped set up an account for the McCorkles in the Cayman Islands and then moved the money to his own wife's account in the Bahamas after the McCorkles were convicted last year on 151 counts of fraud and money-laundering. Bailey says he is not withholding any money that is subject to forfeiture and claims the government is merely trying to keep him from handling the couple's appeal. Three years ago, the last time Bailey fought such a claim, he ended up serving 43 days behind bars until he paid.