A hedge fund database website raised serious doubts about funds managed by accused <"http://www.yourlawyer.com/topics/overview/Arthur_Nadel_Ponzi_Scheme">Florida Ponzi schemer Arthur Nadel in 2005.Â According to the Sarasota Herald Tribune, when the founders of the HedgeCo.net database then called Nadel’s firm, Scoop Management Inc., to obtain audited financials for the funds, they were rebuffed.
Nadel was president of Scoop Management, which managed six private investment funds.Â The funds managed by Scoop included Viking IRA, Valhalla Investment Partners LP, Viking, Victory, Victory IRA and Scoop Real Estate.Â Viking IRA, Valhalla and Viking funds were managed by Nadel under contract with his partners, Neil and Chris Moody.
Nadel disappeared on January 14, a day before he was to deliver a $50 million payout to investors. He left his family a purported suicide note, but it was always suspected that Nadel was alive and on the run.Â Â Nadel turned himself in to the FBI in Tampa late last month.Â He has been charged with one count each of securities fraud and wire fraud.Â If convicted, Nadel could face maximum of 20 years in prison on each charge.
According to the Herald Tribune, in 2005 the HedgeCo.net database raised a number of red flags over the Viking and Vahalla funds.Â They included:
- reported returns that were considerably higher than normal
- no outside firm to verify the numbers
- no outside administrator to monitor the accounts and send out statements to investors
The founders of HedgeCo.net then spoke with Chris Moody about their findings.Â They asked for the audited financials, but never received them.Â They then asked to speak to the funds’ administrator, but were told Scoop didn’t have one, the Herald Tribune said.
As a result, HedgeCo dropped the Valhalla Investment Partners LP, Viking Fund LLC and Viking IRA LLC funds.Â Unfortunately, HedgeCo didn’t go public with its findings until Nadel’s alleged scheme was uncovered.
According to Herald Tribune, while HedgeCo. was unable to get audited financials from Chris Moody in 2005, Moody himself had implied that the funds had received such scrutiny in 2007.Â According to the report, Chris Moody sent an email that discussed the amount on hand at Valhalla Investment Partners LP and its “outside independent accountant Mr. Michael Zucker.”Â According to the Herald Tribune, Zucker is a former certified public accountant who let his credentials lapse in 1990, and who was once sanctioned by regulators for claiming to be a CPA.
Neither Chris Moody nor his father, Neil Moody, have been charged with any crime related to the Nadel Ponzi scheme.Â But as we reported last week, both Moodys have been named in a lawsuit filed by one of Scoop’s investor.