Nadel Clients Return $120,000 to Trustee

Two clients of <"http://www.yourlawyer.com/topics/overview/Arthur_Nadel_Ponzi_Scheme">Arthur Nadel’s hedge funds have turned over $120,000 to the trustee overseeing the liquidation of the accused Ponzi schemer’s assets.

Arthur Nadel was president of  Scoop Management, a Sarasota, Florida based company which managed six private investment funds.  The funds managed by Scoop included Viking IRA, Valhalla Investment Partners LP, Viking, Victory, Victory IRA and Scoop Real Estate.  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. Money belonging to about 600 investors disappeared along with Nadel.  Investigators say that those investors may have lost as much as $350 million.

Nadel turned himself in to the FBI in Tampa late last month.  He has been charged with one count each of securities fraud and wire fraud.  If convicted, Nadel could face maximum of 20 years in prison on each charge.   His case was moved to federal court in Manhattan, where he is currently awaiting trial.

According to BradeltonHerald.com,  the Nadel trustee said in court papers that two clients had willingly returned  money that had been drawn on a Scoop Capital LLC account. Nadel paid the clients shortly before he disappeared, the trustee said.

The federally-appointed trustee has been charged with liquidating assets belonging to Nadel and his companies in an effort to return some money to his investors.  As we reported last week, court documents indicate that the trustee had also moved to freeze assets belonging to Nadel’s wife.  These included the Marguerite J. Nadel Revocable Trust because its $650,000 in assets had been funded through Nadel’s alleged fraud.  The trustee also took action to seize a 430-acre tract of land near Asheville, N.C that Nadel and his wife had slated for residential development.  The trustee has charged that Scoop Management had funneled at least $2.9 million into the property, BradentonHerald.com said.

In addition to the criminal charges Nadel faces,  the Securities and Exchange Commission (SEC) has charged him with securities fraud  in a civil suit.   According to the SEC’s complaint, the funds Nadel managed appear to have total assets of less than $1 million. The complaint also alleges that Nadel recently transferred at least $1.25 million from two of the funds to secret bank accounts that he controlled. According to the SEC, Nadel overstated the value of the funds by $300 million.

No one else has been charged with a crime as a result of the alleged Nadel Ponzi scheme.  But as we reported earlier this month, both Neil and Chris Moody have been named in a lawsuit filed by one of Scoop’s investor. Among other things, the lawsuit claims  that the Moodys  took fraudulently obtained money from investors in Scoop’s funds and bought homes with part of the proceeds.

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