Sarasota's Art Nadel is Manhattan jailmate to swindler king Bernard Madoff

Confessed swindler Bernard Madoff won't be the only money manager in baggy brown scrubs at the Metropolitan Correctional Center. For several weeks, the federal jail in lower Manhattan has also been home to Sarasota's Arthur Nadel.

In what has been called a "mini-Madoff' scandal, the 76-year-old Nadel is accused of bilking investors of up to $300 million. But until Thursday, when a federal judge remanded Madoff to jail, the two men had been treated very differently, even though both are being prosecuted by the same U.S. Attorney's Office in New York.

After his Dec. 11 arrest in a $65-billion Ponzi scheme, Madoff, 70, was released on bail and allowed to remain in his $7-million Park Avenue penthouse because he was able to pay for 24-hour private security guards and electronic and video surveillance.

Nadel went to jail immediately after turning himself in to the FBI in mid January and has been in custody since. That's because a federal judge froze his assets, leaving him unable to post the required $1-million cash bond or hire private guards at his $320,000 Sarasota home.

Nadel's attorney, Todd Foster of Tampa, said prosecutors "asked if we were in position to provide the same sort of conditions (as Madoff) and I said, 'No.'

"We argued that it's unfair to permit people to be released just because they can afford $80,000 a month to turn their homes into private jails.''

Although Nadel's operations were based in Sarasota, he is being prosecuted on securities and wire fraud charges in his native New York because he allegedly used a New York brokerage firm to wire money to secret accounts. Nadel also faces a lawsuit by the Securities and Exchange Commission, which says he grossly exaggerated the value of his hedge funds.

In the SEC case, a federal judge agreed to release $20,000 to Nadel's wife, Peg, for living expenses and her own attorney fees. But other assets remain frozen, meaning Nadel has been unable to pay Foster's firm for several court appearances, and he might soon be without his lawyer.

"Certainly Mr. Nadel's need for legal assistance is much greater than that of his wife,'' Foster wrote in a motion this week asking for payment of "reasonable" attorney fees.

Given their ages, Nadel and Madoff could remain behind bars for the rest of their lives. Madoff, scheduled to be sentenced in June, faces 150 years in prison, while Nadel, who has heart and prostrate problems, could get a maximum of 40 years if convicted.

At the Manhattan corrections center, located between a church and the federal courthouse, Nadel was assigned to the same kind of small cell where Madoff will likely spend at least his first few days. At 71/2 feet by 8 feet, each cell is about the size of a walk-in closet and is equipped with a toilet and sink.

Inmates — who more commonly include terrorists and reputed mobsters — get up at 6 a.m. and must be in bed by 11 p.m. During the day, they can watch TV, play ping-pong, work on their cases in a legal library or volunteer for janitorial duty.

On alternate days, inmates are allowed on the caged roof, where they can play basketball. For court dates, they are shackled and escorted by deputy marshals through an underground tunnel.

The facility allots three hours a week for visits by relatives or lawyers, though Nadel's family hasn't been to see him because they can't afford it, Foster says.

Few of Nadel's 100-plus investors are troubled that he has been locked up longer than Madoff, even though the latter bilked far more people out of far more money.

"I don't think he (Nadel) should ever see the light of day,'' says Michael Sullivan, an Illinois entrepreneur who lost more than $1.5 million. "It's so incomprehensible to believe these things are happening.''

Information from the Associated Press was used in this report. Susan Taylor Martin can be contacted at susan@sptimes.com.

Sarasota's Art Nadel is Manhattan jailmate to swindler king Bernard Madoff 03/12/09 [Last modified: Friday, March 13, 2009 7:46am]

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