Accused hedge fund fraudster Arthur Nadel’s lawyers want to get paid. Nadel’s clients want a judge to say, “not so fast.”
Todd Foster and Barry Cohen have asked a federal judge in Tampa, Fla., to release some of Nadel’s assets to cover the $93,000 in legal bills he’s incurred since his arrest last month. But the Securities and Exchange Commission, which is suing Nadel, and 22 Nadel clients have asked U.S. District Judge Richard Lazzara to reject Foster and Cohen’s request, arguing that any money Nadel made over the past six years is tainted and belongs to his victims.
“Nadel’s counsel fails to offer any evidence to show that the sources contain untainted assets,” Morgan Bentley, a Sarasota, Fla., lawyer representing Nadel’s clients, said. The SEC and the court-appointed receiver in the case agree.
“The source of Nadel and Mrs. Nadel’s income during the period was Nadel’s scheme,” according to receiver Burton Wiand.
Wiand is also busy building the kitty of frozen Nadel assets: The latest addition is Nadel’s wife’s Sarasota flower show, to which Nadel allegedly transferred more than $770,000. Wiand said all of that money is from ill-gotten gains.
Nadel is awaiting trial in New York on charges that he defrauded investors of more than $300 million. He remains in custody, unable to post a $10 million bond.