Published Friday, February 26, 2010

Man behind Tradewind LLC admits to $162 million fraud

The Newnan Times-Herald

A year after his company was forced into receivership, the man behind Tradewind LLC has admitted to a $162 million fraud.

Arthur Nadel, a Florida hedge fund manager with Newnan connections who disappeared a little over a year ago just as he was due to pay investors $50 million, surrendered to authorities in January 2009.

The New York Daily News reported this week that the 77-year-old hedge fund manager "who got a kick out of being called a mini-Madoff" pleaded guilty Wednesday to bilking investors out of millions of dollars.

Nadel said he is now filled with "regret and sorrow... more and more every day" for the grief he caused his family and former investors, the New York Daily News reported.

"I will carry this burden with me every day for the rest of my life," Nadel said in Manhattan Federal Court as he pleaded guilty to securities, mail and wire fraud.

The Florida trader confessed he carried out a more modest version of Bernie Madoff's massive ripoff -- lying about how much was invested in six funds and grossly exaggerating returns so he could skim inflated fees and bonuses.

U.S. District Judge Richard Lazzara in Tampa ordered two of Arthur Nadel's businesses, Venice Jet Center LLC and Tradewind LLC, into receivership following his disappearance a year ago. Tampa lawyer Burton Wiand, who was appointed by the judge as receiver for Nadel's funds, said in a court filing that the businesses were bought with fraudulently obtained money.

Tradewind owns and controls at least five aircraft and owns airport hangars at the Newnan-Coweta County Airport.

The Coweta County Airport Authority formerly had a business agreement with Tradewind LLC for a 20-acre plot of land at the airport, but the agreement was nixed in July 2007.

Arthur Nadel's son, Chris Nadel, operated Tradewind LLC and was involved in intensive discussions with the Airport Authority when the partnership was proposed. The deal soured as the parties fell into dispute over whether Tradewind LLC should be allowed to sell fuel at Newnan-Coweta Airport.

Tradewind first issued a proposal in January 2007 requesting the right to sell fuel and be a private Fixed Based Operator at Newnan-Coweta Airport. The real estate company issued a second proposal in April 2007. The authority denied both proposals.

"Tradewind's business plan is speculative and risky," said Newnan attorney Nathan Lee at the time.

Newnan attorney George Rosenzweig represented Tradewind at the time and argued Tradewind had invested $2 million on the west side of the airport.

The Securities and Exchange Commission won a court order last year freezing Nadel's assets.

Nadel disappeared Jan. 14, 2009, after telling his wife in a note that he felt guilty. He also threatened to kill himself, according to the Sarasota County Sheriff's Office. Police found his green Subaru the next day in an airport parking lot.

The SEC said Nadel's funds appeared to have assets totaling less than $1 million, while he claimed in sales materials for three of the funds that they had about $342 million in assets as of Nov. 30, 2008.

The materials also boasted of monthly returns of 11 to 12 percent for several of the funds last year, when they actually had negative results.

An investor in one fund received an account statement for November indicating her investment was worth almost $420,000. In reality, the entire fund had less than $100,000, according to the SEC.

The New York Daily News reports that prosecutors want Nadel to forfeit his ill-gotten wealth -- homes, a 420-acre property in North Carolina, and land in Georgia, five airplanes, a helicopter, and a 31-airplane hangar at the Newnan-Coweta County Airport.