Nadel Says Receiver Has No Right To His Home

Aug 14 2009 | 12:51pm ET

Accused hedge fund fraudster Arthur Nadel is doing what he can to keep his wife from losing their home.

Peg Nadel last month wrote a letter to the judge overseeing the civil fraud case against her husband “pleading” to “please let me keep my home.” Nadel himself has now done the same. But instead of the self-pitying tack taken by his wife, Nadel, a disbarred lawyer, went in for the legalese.

According to the seven-page letter, hand-written from Nadel’s Manhattan jail cell, the Scoop Management chief says receiver Burton Wiand has no right to the Sarasota, Fla., home or his wife’s share in a rental property nearby.

Wiand has seized the Fruitville, Fla., rental house and is trying to get his hands on the Sarasota home in his effort to recoup the $400 million Nadel allegedly defrauded from clients in his six hedge funds. But Nadel argues that it is unfair to punish his wife, who has not been charged with any wrongdoing in the case.

“Peg Nadel is not even a party in a strict jurisdictional sense, and there has been no claim of wrongdoing against her,” he wrote. What's more, he wrote, he and his wife both properties before prosecutors and the Securities and Exchange Commission allege he began his fraud.

Wiand, of course, is not just focused on the Nadel properties, and has kept himself busy on many other fronts. This week, he won U.S. District Judge Richard Lazzara’s approval to take to join a proposed class-action against the law firm that helped Nadel write the prospectuses for his hedge funds.

Lazzara gave Wiand the go-ahead to hire the law firm of Johnson Pope Boker Ruppel & Burns, which is leading the lawsuit against Nadel’s lawyers, Holland & Knight.

“The receiver believes pursuing these claims on a contingency basis would be beneficial to the receivership,” Wiand wrote.

Lazzara has also recently added Home Front Homes, a construction company owned by Nadel, to Wiand’s list of liquidatable properties.

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