Art Nadel's history of investing fraud exposed
To pay off loan sharks, New York attorney Arthur G. Nadel violated a basic tenet of legal ethics — he dipped into an escrow account and took $50,000 that did not belong to him. That was in the late 1970s, and Art Nadel was subsequently disbarred for "dishonesty, fraud, deceit and misrepresentation." So begins St. Petersburg Times reporter Susan Martin's investigative piece on Nadel's scandalous financial history -- a background few if any folks in Sarasota seem to know about. (Nadel photo courtesy of Sarasota Herald-Tribune)
Nadel, if you do not know by now, is the Sarasota money manager who left behind a suicide note and disappeared. So has some $350-million in other people's money he managed. Early leads suggest he was hiding somewhere in Slidell, La., but there's been no confirmation. His disappearance, coming so closely in the wake of the Bernie Madoff $50-billion Ponzi scheme, has prompted parallels of a financial scam gone wrong.
According to Martin's story, in 2004 — by which time Nadel was living in Sarasota — he never disclosed his legal disgrace to investors in his Scoop Real Estate Limited Partnership. Thus, many were blindsided last week when the 76-year-old vanished, along with the money.
Nadel admitted he lost clients' money and feared they would want to kill him, according to documents obtained by and reported in Sarasota's Herald-Tribune today. The note does not describe how Nadel lost investors' money, the newspaper says, though the note suggests it was "a result of his management" of the hedge funds. He tells his wife, Peg, to rely on family and friends "to get her through." (Photo of Peg Nadel and son Geoff Quisenberry courtesy of AP.)
The Sarasota County Sheriff's Office said it believes Nadel planned his disappearance and that it was ending its search for him. The FBI is now in charge.
Here's my favorite tidbit on Nadel. He was named "America's Top Ranked Money Manager" in the 2003 headline in The Wall Street Digest, an investment newsletter, according to a Reuters story. Some burned investors, like 68-year-old Tony Hagar, say they were drawn to his funds by The Wall Street Digest and the upbeat report by its editor, Donald Rowe, and now question how much due diligence the investment newsletter industry conducts, Reuters reports.
Susan Martin's report in the St. Petersburg Times answers that question. Not enough.
-- Robert Trigaux, Times Business Columnist