Nadel Accountant No CPA

Jan 26 2009 | 2:10am ET

While his apparently phony suicide note is a page out of Samuel Israel’s playbook, one aspect of missing hedge fund manager Arthur Nadel’s case seems to be pure Bernard Madoff.

Nadel, the Florida hedge fund manager who disappeared on Jan. 14 and has since been charged by the Securities and Exchange Commission with fraud, apparently used an unlicensed accountant to audit his hedge funds. Michael Zucker, who allowed his CPA license to lapse in 1990, has called himself the “internal accountant” for Nadel’s six funds, and pronounced himself “blindsided” by Nadel’s disappearance. It was Zucker who said that Nadel fled the week his firm was due to make $50 million in payments to his investors.

A 2003 prospectus for the Viking IRA Fund referred to him as “Michael Zucker, CPA.” But Zucker is not a certified accountant, and got in trouble for claiming such in 1999, when the Florida Department of Business and Professional Regulation ordered him to stop his “unlicensed and illegal” practice of serving as a CPA.

A 2006 prospectus for another Nadel hedge fund, Valhalla Investment Partners, made Zucker’s position clearer: “Michael Zucker, who is neither a certified nor public accountant, serves as the partnership’s accountant.”

Madoff, charged in a Ponzi scheme more than 100 times the size of Nadel’s, also used an allegedly fishy accountant: Friehling & Horowitz, the suburban New York firm that audited Madoff’s investment advisory business, had told the American Institute of Certified Public Accountants that it has not conducted an audit for 15 years. But it was listed on Bernard L. Madoff Investment Securities’ state of financial condition as the auditor.


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