Arthur Nadel's Lawyers Haven't Been Paid, Could Quit CaseMar 17, 2009 | Parker Waichman LLP
The lawyers for accused Florida Ponzi schemer Arthur Nadel are threatening to quit. According to the HeraldTribune.com, Nadel owes his attorneys $93 million for their services thus far. The law firm representing Nadel in his criminal case has asked a judge to unfreeze some of the alleged swindler's assets so that that it can be paid. If the judge does not agree, the law firm could drop Nadel as a client.
Nadel was president of Scoop Management, which managed six private investment funds. The funds managed by Scoop included Viking IRA, Valhalla Investment Partners LP, Viking, Victory, Victory IRA and Scoop Real Estate. Viking IRA, Valhalla and Viking funds were managed by Nadel under contract with his partners, Neil and Chris Moody.
Nadel disappeared on January 14, a day before he was to deliver a $50 million payout to investors. He left his family a purported suicide note, but it was always suspected that Nadel was alive and on the run.
Nadel turned himself in to the FBI in Tampa two weeks later. His was charged with one count each of securities fraud and wire fraud, and his case was moved to federal court in Manhattan. Nadel is in jail, having been unable to meet the conditions of a $5 million bond. If convicted, Nadel could face a maximum of 20 years in prison on each charge.
As if that weren't enough, Nadel also faces civil fraud charges by the U.S. Securities and Exchange Commission (SEC) in Tampa.
Nadel's attorneys have been representing him in his criminal case since his arrest, and according to the HeraldTribune.com, he also wants them to take on his SEC case. But because his assets are frozen, the law firm has not been paid. However, Nadel's wife did assign to the law firm a note and mortgage with a $124,637 balance for a Sarasota condo, HeraldTribune.com said.
In a court filing, his attorneys offered to represent Nadel for a "deeply discounted" rate. U.S. Court Judge Richard Lazzara is being asked to release some of Nadel's frozen assets so he can pay his legal fees. One of the attorneys working on Nadel's case told the HeraldTribune.com that if the judge does not agree to unfreeze some assets, it could "force a re-evaluation of our position here".
According to HeraldTribune.com, the trustee charged with liquidating Nadel's assets and distributing funds to his investors is opposed to the move.