Nadel's bling, art, property on the block

When Sarasota hedge fund manager Arthur Nadel went on the lam for two weeks before his arrest, he drove off in a 2006 Subaru with leather interior.

He left behind an office decorated with art that included a picture of sad clown Emmett Kelly reading the Wall Street Journal - perhaps symbolic of the 400 victims who lost $168 million because of their investments in what turned out to be Nadel's Ponzi scheme.

Now authorities are selling Nadel's belongings, including the getaway car and that signed print, to help compensate those victims.

Burton Wiand, the court-appointed receiver, has the task of finding Nadel's assets so that the money can be distributed to those who lost their investments with Nadel and Neil and Christopher Moody. The father and son shared an office with Nadel and ran a fund Nadel advised.

Nadel pleaded guilty in New York last month to federal fraud charges, and Wiand traveled to meet the 77-year-old in jail last week. Wiand said Nadel agreed to help him find assets, but was prevented by his lawyers from doing so until his case was resolved.

"I was able to talk to him, and he seemed to be open in our conversations," Wiand said.

As Wiand continues searching for assets, he is also selling jewels, including a flawless 7-carat diamond ring, and more than $1 million worth of bling designed by Michael Beaudry, described by the Los Angeles Times as jeweler to the stars, whose work has adorned Beyonce, Katherine Heigl and "Gossip Girl" Michelle Trachtenberg.

The Beaudry jewelry was purchased by the Moodys as a business investment. Wiand also is selling some decidedly less-valuable pieces worn by Nadel's wife, Peg. There's a pendant that was appraised in 2004 at $4,400 and earrings said to be worth $2,485.

Wiand also is selling a painting by Jack Leland Bailey that hung in the Nadels' home and was valued at $75,000 when it was purchased in 2006. The appraisal says the painting depicts "humanistic pathos."

Wiand will auction the Subaru on eBay on Tuesday, hoping the "getaway car" label will bring in extra money for victims.

"It's a piece of history," he said. "It adds a little entertainment value."

The eBay strategy was successful before. A pink Jeep that Wiand calls the Barbie Jeep, which was owned by the wife of one of the Moodys, was valued at $4,000. On eBay, it fetched $7,800.

Morgan Bentley, a lawyer representing 36 victims of Nadel and the Moodys, said Wiand's marketing idea for the Subaru is "very clever." He supports anything that brings in more money for the victims.

But Bentley said he wishes Wiand was doing more to recover assets. For example, he said, the receiver has gone after only half of the people who profited from the Ponzi scheme.

Wiand said he has been "very aggressive" going after profiteers; he said he has agreements for people to repay $7 million, as well as lawsuits seeking about $63 million more.

"We will continue to pursue that aggressively," he said.

Also, Wiand has sued Holland & Knight over the law firm's representation of some of the investment funds, alleging that the firm failed to properly investigate Nadel to protect the legal interests of the funds.

In addition to being a newly minted used-car and jewelry salesman, Wiand is also in the real estate business, selling off properties ranging from a $2 million waterfront condominium to a land preserve in North Carolina. There's also a Starbucks in Mississippi, a condo in Ohio, a Georgia Shell station, five acres off Fruitville Road and a florist in Sarasota.

"The Nadels were not very good business people," Wiand said.

Mr. Florist was purchased for $1.2 million and run by Peg Nadel.

"It never was successful," said Wiand, adding that the shop is being operated by the former owner until a buyer can be found for the property, which still has $500,000 in debt.

Peg Nadel lives in the couple's Sarasota home, valued at $283,000, with $100,000 owed against it. When Arthur Nadel entered into a plea deal, federal prosecutors agreed not to go after his home, Wiand said.

"I have not agreed to that," he added, leaving open the possibility that the house will also be seized and sold to compensate victims.

Information about purchasing assets can be found at www.nadel receivership.com.

Wiand said he expects to begin filing documents establishing the claims procedure for investors. After claims are approved by the court, proceeds will be distributed based on the percentage of the total amount of claims.

Reporter Elaine Silvestrini can be reached at (813) 259-7837.