BREAKING NEWS: SEC Charges Nadel With Fraud

Breaking News 2:24 p.m. EST (U.S.A.). The Securities & Exchange Commission has just accused missing fund manager Arthur Nadel of fraud.

“Nadel provided false and misleading information for dissemination to investors about the Funds’ historical returns and falsely overstated the value of investments in the Funds by approximately $300 million,” the SEC said. “In contrast, the Funds appear to have total assets of less than $1 million.”

Nadel has been missing since Jan. 14. The Sarasota Herald-Tribune reported today that he was believed to have been in Louisiana in recent days and told family members in a suicide note that he believed people might kill him.

SEC investigators also allege that Nadel recently moved $1.25 million into a secret account.

A judge today granted  a temporary restraining order, an asset freeze, and preliminary injunction against Nadel and preliminary injunctions and asset freezes against Scoop Capital and Scoop Management.

“In addition, the complaint seeks permanent injunctions, disgorgement plus prejudgment interest, and civil money penalties against all the defendants,” the SEC said. “Without admitting or denying the allegations of the complaint, defendants Scoop Capital and Scoop Management consented to the entry of, among other things, preliminary injunctions, asset freezes, and the appointment of a Receiver.”

The complaint also names as relief defendants two investment management companies, Valhalla Management, Inc. and Viking Management, LLC, and the six Funds, Scoop Real Estate, L.P., Valhalla Investment Partners, L.P., Victory IRA Fund, Ltd., Victory Fund, Ltd, Viking IRA Fund, LLC, and Viking Fund, LLC. The complaint seeks disgorgement plus prejudgment interest against each of the relief defendants.

Nadel simply doctored client statements, pulling numbers from thin air, the SEC said.

“[O]ne e investor from Virginia who invested in the Victory IRA Fund received a statement for October 2008 indicating his investment was valued at $599,551.55, and a November 2008 statement indicating his investment was valued at $602,965.39,” the SEC said in its complaint.

“This same investor made a second investment in Victory IRA Fund through another account and
subsequently received an October 2008 statement indicating this investment was valucd at
$172,354.07, and a November 2008 statement indicating this investment was valued at
$1 73,335.45.

“These statements were false because the total value of the entire Victory IRA Fund’s holdings was only $2,938.86 at the end of October and November 2008,” the SEC said.

Read the SEC complaint.

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5 Responses to “BREAKING NEWS: SEC Charges Nadel With Fraud”

  1. Another one here:
    http://sec.gov/litigation/litreleases/2009/lr20857.htm
    Receiver Appointed And Assets Frozen In “Hedge Fund” Ponzi Scheme

    On January 20, 2009, U.S. District Judge Sam R. Cummings, for the Northern District of Texas, Lubbock Division, appointed a receiver and froze the assets of a former bail bondsman who is purportedly managing a hedge fund worth at least $45 million on behalf of 31 individual investors. Defendant Rod Cameron Stringer, of Lamesa, Texas, claims that his stock trading strategy has generated annual returns as high as 61%, and total returns in excess of 600%. In truth, the Commission’s complaint alleges that Stringer has been operating a fraudulent scheme since at least 2001, during which he has misappropriated millions of dollars of investor funds to support an extremely lavish lifestyle and to make Ponzi payments to earlier investors with new investor funds. Many of Stringer’s investors are elderly.

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  2. Thanks, Tony. It’s been a busy Ponzi day.

    Regards,

    Patrick

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  3. Busy, busy, busy!
    http://sandiego.fbi.gov/dojpressrel/pressrel09/sd012009a.htm

    United States Attorney Karen P. Hewitt announced that Donald Manning pled guilty today to conspiracy and wire fraud charges in U.S. District Court in San Diego before the Honorable Barry Ted Moskowitz. According to Assistant United States Attorneys William Cole and John Owens, who are prosecuting the case, Manning was the President of a Ponzi scheme called the “Brixon Group.” Along with coconspirators Joseph Wayne McCool and Cameron Campbell, Manning recruited retirees and members of his own family to invest millions of dollars in the Brixon Group. Manning told investors that the Brixon Group guaranteed large, guaranteed returns and that the investments were risk free. Manning also told investors that
    part of their investment would go toward humanitarian efforts overseas and that co-defendant McCool was a banking expert who, prior to working with Brixon, had successfully managed a large private trust in Europe. As part of his guilty plea, Manning admitted that he and his coconspirators, in fact, intentionally concealed from investors that most of the money invested in Brixon would not be placed into investments and that new funds received from investors would be used to make payments to earlier investors. Manning further admitted that, through the Brixon scheme, he and his coconspirators converted much of the investors’ money to their own personal use.

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  4. Thanks, Tony. I hadn’t heard of Brixon Group.

    Yes. Busy. :-)

    Patrick

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