Original subtitles

In this episode of American Greed, he's called the Wizard of Sarasota. He was

literally the man behind the door.

Arthur Nadel conjures a $330 million hedge fund that's all hocus pocus.

He was the number one subject in the disappearance of hundreds of millions of

dollars. Nadel is charged with running what's been described as a mini Madoff

scheme.

In the blink of an eye, Nadel disappears without a trace, leaving clients

without their life savings.

You just question, how are you going to make it happen?

January 14, 2009,

Sarasota, Florida.

The day begins like any other for 76 -year -old hedge fund manager Arthur

He packs his briefcase, loads into his late model Subaru, and heads off to

When he left for the office that morning, his wife had no reason to

anything was wrong.

However, when he didn't show up at his regular time at the office before the

start of the trading day, people began looking for him.

Nadel's family panics and calls police.

Soon, word of his disappearance makes headlines.

CNBC has confirmed that Florida money manager Art Nadel is missing.

Not only has Nadel vanished.

But it seems $330 million of his client's money has disappeared right

him.

You had a lot of people that wanted more answers, and it's not that we didn't

want to give it to him. We didn't know either.

In a few short days, a nationwide manhunt is underway for Nadel and the

he managed.

We didn't know if he was going to commit suicide, where he was, what happened.

We knew nothing.

Arthur Nadel is born in New York City at the height of the Great Depression.

New Year's Day, 1933.

He had a very difficult life as a child, didn't have his father's love, you

know, all that kind of thing.

He's not only smart, but he's also a talented musician.

He was initially a jazz piano player in New York, put himself through NYU and

NYU Law School, and then after a short period of time, he became a lawyer.

By the late 1970s, he's advising clients on various real estate and security

investments.

And with his private life in shambles, having already been divorced, Nadel is

desperate for success.

In 1978, Nadel represents a client who's selling property to a buyer for $50

,000.

He had put some money for his client in escrow, as required by law.

And at some point, that client claimed to be in some kind of trouble, possibly

with loan sharks, and needed access to that money.

But that money isn't Nadel's to take.

And in 1980, when the deal falls through, the buyer asks to get his money

escrow. It appears that Nadel had withdrawn nearly all of it, leaving only

$152 in the account.

Nadel's defense was that he gave the money to help him out.

A year later, Nadel manages to repay the buyer with interest.

But not before the New York State Bar Association gets wind of the incident.

Finally, on March 11, 1982, Arthur Nadel is disbarred for deceit,

misrepresentation, dishonesty, and fraud.

Certainly, misappropriating money in an escrow account is one of the most

serious charges a lawyer could face.

For the next few years, Nadel tries to leave his past behind.

He relocates to Sarasota, Florida, where he sets out to become a mover and a

shaker.

He bummed around looking for something to do, looking for a deal to make. There

are a lot of people here looking for deals to make.

His first bet is on a downtown landmark.

The Miramar Hotel was in downtown Sarasota, built, I believe, back in the

30s. It had become decrepit and run down, vacant, of course, and he and a

partner had a plan of restoring it.

Said they had the money to restore it to its old grandeur and glory.

Nadel believes that the Miramar project can catapult him to a whole new social

strata. That was a time when people were trying to save a lot of these buildings

that had become vacant and run down.

He tried and tried and tried to get the money to renovate and rebuild that and

failed. That was his first failure here.

In 1987, he reportedly embarks on yet another losing venture with his third

wife, artist Virginia Hoffman.

It was a consignment gallery is basically what it was.

The artists would bring in their work, they would display the work, and then

when it was sold, they were supposed to get the money back.

But what happened was art took the money for some of the items, and the artists

were not paid for their work.

Nate Allen Hoffman divorced in 1991, and it's not long before he marries for a

fourth time.

He was at a really, another one of his low points in his life.

This marriage also fails.

And after three years, they have an acrimonious divorce.

The court records of this divorce really showed Art was unemployable. He

couldn't get a job, even as a piano player anymore. He'd lost all his

credibility in town.

Doubt and out, again.

Nadel argues that with no job, he can't afford to pay the $68 ,000 divorce

settlement. He even fights to hold on to their garden statue.

It's pathetic, but I think that it goes along with not paying the artist. You

don't pay the artist in the previous marriage. Now you're in this marriage

you're fighting over the garden ornaments. It's very illustrative of

of personality we're talking about.

But as he's done so often in the past, Nadel dusts himself off and begins

working his magic once again.

In 1997, he meets 62 -year -old Peg Quisenberry, a regular in Sarasota's

philanthropic circles.

Peg was an ex -Vogue model, tall, very attractive, a very lovely woman.

They certainly looked physically like an odd match.

I don't know why women were attracted to him, but he got five of them.

He must have had something.

With her connections and his hustle, they start a day trading club.

All over America, little old ladies and retirees and school teachers were

getting together and reading finance manuals about how to beat the market and

then pooling their money together to form these investment clubs. This was

on everywhere. This was like a sociological phenomenon.

The Nadel's Investment Club quickly becomes a hit.

Suddenly it went from not even a mom and pop, it was just some friends having

drinks and deciding how they're going to invest, to a business, a big business,

a multi -million dollar business.

When American Greed returns,

Nadel tries to leave his shady past behind to strike it rich.

But will he finally find his place in the sun?

No one checked into Art Nadel's background.

Anyone could have found out he was a disbarred attorney. It doesn't take much

work to do that.

Sarasota, Florida.

It's the second home to some of the country's elite.

It's also known as the state's cultural coast.

Very popular spot for retirees. Most of them are affluent retirees, bringing a

lot of wealth into the community, which helps support some of those activities

on the cultural side.

By 1997, 64 -year -old day trader Arthur Nadel has come to be known for his

successful investment club.

It's only natural, then, that Nadel would consider day trading full -time.

His club was achieving these great results, and over time they began

others. Through the groups that he was a member of, through friends and family,

word spread that Nadel had formed a fund.

Nadel calls his new venture Scoop Management, and he opens a storefront

on Main Street.

Soon, Nadel meets Neil Moody, a 30 -year Wall Street veteran who worked for

financial giants Kidder Peabody and Payne Webber.

Moody was much more of a tall, handsome, country club kind of guy.

If he talked to you, you kind of believed him because he had all the

he was a player.

He's been successful at raising money pretty much at every turn, and that's

he's good at. That's his gift.

With Moody as his rainmaker, Nadel's little business begins attracting big

money.

And in 1999, Moody opens Valhalla, the first fund under the Scoop umbrella.

At that point, it was night and day. One day it's just us, and the next day it's

Neil and Art, and they're off to the races.

The law firm of Holland and Knight prepares an offering memorandum for

If you want to avoid registering security, then you can do a private

memorandum. And it goes to every investor, and it lays out what the

the fund is, what the term is, if there's going to be a term, how you get

how you get out.

The memorandum names Neil Moody and his son Chris as the managing members of the

fund.

But it leaves out one crucial bit of information, that Arthur Nadel, a

attorney, will be making every last trade.

which might scare off potential investors who drop $100 ,000 to get into

fund.

Nadel's trading strategy, however, puts them at ease.

His funds traded in the QQQs, the NASDAQ index that tracked technology stocks.

It was a simple approach. He told investors that he liquidated at night,

he wasn't invested overnight, and that he would trade in and out of the QQQs

throughout the day.

Soon, Nadel begins hiring inexperienced administrative staff, like

doe -eyed 28 -year -old Shelly Bell.

We were all new to the business.

None of us knew anything about investments or trading or financials or

like that.

Bell grew up in Sarasota and worked as a bookkeeper for her family's cabinetry

business.

I've always just had a knack for numbers.

I've always been very good at crunching numbers, analyzing them, figuring things

out. It's kind of like an investigator thing in me to make sure everything

balances and trying to find where the problem is.

But Bell doesn't know what she's getting herself into.

You see NASDAQ and stock trading ticker symbols and everything else, but I had

no idea what it meant.

So I thought, you know, here's another opportunity to get into an industry that

seemed to be intriguing to me.

Nadel devises a workflow that purposely keeps her in the dark.

Nadel kept a very tight rein on the brokerage account statements.

They came in through the mail.

and everyone in the office understood that they were going to be given

to Mr. Nadell.

When those statements came in, we just put them in Art's inbox.

No one thought, let's open it, let's analyze it, let's look at it.

The volume was so large that it would be easier if Art just summarized it for me

and gave me the synopsis of the trading activity, and I would just put that

number in the program.

In 1999, Nadel reports gains of about $959 ,000,

a 36 % return.

He'd be in there for the entire trading day, and he would come out from time to

time and say, here's my report, and they would just come from him. There would

be no corroboration, there would be no backup, there would be no one saying,

did you arrive at these figures?

But the actual gains are only $36 ,000.

$923 ,000 less than what Nadell had reported.

Nadell's trading would be personally entered by Mr. Nadell onto a spreadsheet

using pencil and paper. The numbers on that spreadsheet were completely

fabricated.

When American greed returns, the technology bubble bursts, and the tech

NASDAQ loses more than half of its value.

But Nadell's hedge fund seems to be on a roll.

I think the investors may have just thought they found the goose that could

the golden egg for them.

In late 2000, Sarasota, Florida, fund manager Arthur Nadel continues to

unbelievable returns.

despite the NASDAQ crash.

But in reality, Nadel loses a whopping 91%, though he stealthily reports a

55 % gain.

I felt very fortunate to have this opportunity to work for someone that had

an amazing ability, saw a desire and a dream to open a business like this, and

became so successful in doing it, he made it look very easy.

Nadell's partner, Neil Moody, brings in a range of clients, from institutional

investors to regular folk looking to grow their life savings.

Neil was able to take a picture that was painted by Art Nadell and turn it

around to anybody who would listen and say, isn't this fantastic?

In 2001 and 2002, years when the S &P 500 index is down double digits,

Nadel says the Valhalla Fund's returns are more than 19 and 21 percent,

respectively.

The returns were terrific. People weren't making money on Wall Street. But

hedge funds were all making money for folks, and the investors loved it.

These improbable numbers reach Don Rowe, publisher of the popular Wall Street

Digest newsletter.

Rowe publishes a rave review of what he calls the Nadel Moody Funds. He called

them America's best money manager. He said their profits were so much better

their techniques so much more performing than others.

He urged his clients to invest in them, and many of them did.

Aerospace engineer Tony Hagar reads the digest.

And decides to invest $100 ,000.

That was the real trigger that convinced me to invest in the Nadel Fund.

And his reason to invest?

I was an older father with a young family, so my interest was really in

to understand what I might be able to do to secure my future more financially,

make it more solid.

I don't think I would have done that at all if it hadn't been.

for that Wall Street Digest.

You see somebody say, this is the best fund I've ever seen. Do you ever check

out that author?

No. And so people did the same thing with Don Rowe. Here's a guy who's been

writing about these things for decades and knows what he's doing and says it's

the best fund. This gives me reassurance.

But Rowe's newsletter is not an objective source.

Its fine print says it's really an advertorial.

He had a huge conflict of interest because he was being paid for getting

to invest in the funds.

But Hagar is so pleased with what he sees on his statements that he plans to

invest his entire life savings, $894 ,000.

Maybe it's just naivete. You know, you're brought up to be trusting people.

My discussions with some of the people there, I had a good feeling about it.

By 2004, Nadel and Moody have opened six funds, traded by Nadel under the Scoop

umbrella.

Nadel is listed as the managing member of Scoop Real Estate, Victory, and the

Victory IRA funds.

Neil Moody brings in his son Chris to co -manage the Viking, Viking IRA, and

Valhalla Fund.

I knew Chris had a financial background. I knew he was educated.

So I thought this was a great opportunity to have someone in the

an education and that could maybe assist the rest of us in some due diligence.

At years in, Nadel claims the six funds averaged 33 % returns.

But really...

He makes about a third of that, still a respectable 14%. The next year, in 2005,

Nadel reports a 28 % average return across the funds, numbers he magically

arrives at using his own imagination.

The problem was is that no one ever went back and said, show me the backup, show

me the trades, show me the accounts where you made... this trade and it made

this much money, and then you made this trade and it made this much money, and

this is how you got to that number at the bottom.

Even skeptics like Sarasota doctor Brad Lerner eventually invest with Neil

Moody. I wouldn't consider myself a savvy investor, but I didn't think of

as a naive investor either.

It takes Moody five years to sell the doctor on his funds.

I found it hard to believe that anybody could get the kind of returns that he

was getting compared to the market, which is why it took me a long time

finally invested with him.

In all, Lerner pours more than $500 ,000 into the fund.

This was all retirement money, so my goal was to just let it grow as much as

could grow so that one day when I retire, there would be a significant sum

money there.

Arthur Nadel's magic touch keeps investors happy.

But an unprecedented crash is just around the corner.

When American Greed returns, Nadel's carefully crafted illusions are no match

for the harsh reality of the market.

The minute the calls start and they say, I want my money, if the number of calls

saying I want my money exceed the number of calls saying I want to invest,

you're done.

By 2005, Arthur Nadel, the Wizard of Sarasota, seems to defy market odds,

conjuring outsized returns even in down markets.

Though actually investing clients' money, Nadel grossly overstates the

performance of his $275 million fund.

And he uses new investor money to cover his incompetence.

Still, Nadel and his partners, Neil and Chris Moody, are compensated based on

the fund's report. Reported success.

They had an annual percentage management fee, and then they received another

larger percentage of the annual profits.

In their first six years in business, together Nadel and the Moody's pay

themselves upwards of $35 million.

But they're not the only beneficiaries of Nadel's purported success.

The fund also rewards its administrative staff with six -figure salaries and big

bonuses.

Three or four hundred thousand dollars for a bookkeeper is a lot of money.

For the first five or six years, this was probably the best place I could

I could ever work for.

I called Peg Mama Peg, and I called Art Master Art, because he just, there

wasn't anything that man couldn't do.

He was an amazing person.

Or so I thought.

With his newfound wealth, Nadel becomes a fixture in Sarasota's charity scene.

They would go to a not -for -profit and they would say, I'm going to give you

$250 ,000, but I'd like you to keep that $250 ,000 in our management

firm. Well, that means that the money didn't actually change hands.

And though he lives modestly in his $250 ,000 home, Nadell spends heavily on

other business ventures.

Art invested in a lot of businesses around town and out of state.

The Venice Jet Center, he bought airplanes and helicopters here and in

where he had another jet center operation.

He had purchased a large development in North Carolina that he wanted to

develop, about 400 acres.

and other small businesses that he was putting money into.

Nadel's trading was a losing proposition. His investments in real

generally losing propositions, and he was not making money.

In 2006, Nadel reports a gain of about $50 million, but he actually loses

about $18 million, a $68 million discrepancy that he works hard to cover

He bridges the gap with new money from new investors.

And by 2008, with about $330 million under management, Scoop appears

to be flush with cash.

The lifeblood of any Ponzi scheme is the inflow of new money to pay off existing

investors. As long as that new money was coming in from new investors, existing

investors were being paid off and satisfied.

But the market takes a dramatic turn for the worse, knocking Nadel for a loop.

He was trying not to meet with investors who might come in just to chat and say

how things are going.

I think the pressure was definitely building. He knew it was collapsing.

Nadel has been losing around $20 million a year since 2001, and his losses are

just now starting to catch up with him.

The story Mr.

Nadel told himself year after year was, I really am a wizard.

I am a great trader. If I can just keep doing this, I will make all the

money back.

I didn't notice Art panicking. I didn't notice him retracting.

Even Neil and Chris Moody, Nadel's partners, claim they have no idea of

happening. You would have to be blind or stupid not to have seen that there were

major issues happening.

And I think they themselves would admit they were starting to ask the questions.

That September, Nadel and the Moody's send investors letters to bolster

confidence in the funds.

One thing I noticed about the performance of the funds, they were not

well. And I had the same sense about the market in general.

The markets were not yielding as much as they had been in the past.

That didn't particularly surprise me. It just seemed reasonable.

Incredibly, investor statements also continue to show gains, despite the

decline in the market.

It showed my value being approximately $730 ,000.

So it was my belief that my $500 ,000 at that point was worth $730 ,000.

Not bad.

Since 1999, the Moody's have left Nadal to his own devices.

But by October 2008, with the market tanking, they realized they need

independent confirmation of Nadal's trading performance.

There had never been, all those years, an independent audit of these hedge

funds. Investors apparently hadn't asked for them.

But they were pushing for one now.

But Nadel is adamantly opposed to an audit that could uncloak the tricks of

trades. It was a bad day.

He didn't see a reason why he didn't want it. He didn't want to think of it

hear about it.

And he ended that conversation.

The fact that he didn't get him back right away should have been a major red

flag for the Moody's. It should have been, whoa, stop everything, hold the

presses, do not pass go.

I want him right now.

And if I don't get them, I want to know why.

Next on American Greed, Nadell's investors panic and there's a run on his

It was a situation that kind of snowballed on him.

But where is Art Nadell?

His green Subaru station wagon was left at the Sarasota airport and his

whereabouts was unknown to the people closest to him.

By December 2008, the economy is thrust into a recession.

The largest Ponzi scheme in American history is revealed.

Bernie Madoff will learn his fate tomorrow for running an elaborate Ponzi

that defrauded investors of $65 billion.

News of Madoff's fraud makes headlines in Sarasota, Florida, triggering a wave

of panic.

And Arthur Nadel's clients line up to get their money back, requesting some

million in redemptions, which are due January 15, 2009.

That was the crack that opened the dam. They simply didn't have that money to

make the redemptions.

Arthur Nadel reluctantly agrees to an audit.

And on January 14,

The 76 -year -old wakes up knowing he owes investors $50 million the next day.

It was a situation that kind of snowballed on him. His trading was not

in gains. However, he was reporting positive returns to investors.

And in order to maintain the gig, he had to continue to report positive returns

to generate additional inflow of new invested money.

Instead of dragging himself into the office, Nadel writes his family a

note and leaves town.

His green Subaru station wagon was left at the Sarasota airport, and his

whereabouts was unknown to the people closest to him.

I called in to let them know I was on the way, and the receptionist told me

Peg was kind of in a state of panic because Art had not been in.

She was calling hospitals. She was calling the police.

She didn't know where he was.

Later that afternoon, Nadel's wife, Peg, makes a fateful announcement.

We all met in the conference room, and Peg had told us that she got a phone

from Art that afternoon telling her to go home. There was a note for her there

and informed us that all the money was gone, and Art has disappeared.

And we were all just in a state of disbelief.

Even Nadel's partners, Neal and Chris Moody, say they don't know the extent of

the damage.

Somebody had to give us authority to access the accounts because the only

that was on there was Arts.

So even Chris and Neal were struggling with, what's in here? We need to know.

He's gone. We need answers.

Bell returns to Scoop the next day, hoping to find some answers.

We went into Art's office to try and find the statements, and there was

in there.

I went into the shredder, and I could tell that there were documents that he

written because I recognized his handwriting.

Bell bags up the shredded papers and takes them home. She methodically pieces

them together with thumbtacks and tape.

one shred at a time.

I just think about the night I put these all together, not knowing the content,

just matching up each line, and then as it all came out, reading it was like I

was in a nightmare, I was in a dream.

There's no way this is actually what I'm reading.

There's no way this is actually happening right now.

After hours of painstaking work, by dawn, Bell has pieced the documents

together, and she makes a shocking revelation.

The documents are rough drafts of two letters written by Nadal, one to

and one to his wife, Peg.

If you want to survive this mess, what follows is for your eyes only. I

suggest that you destroy it after reading. Try to find a lawyer right

The avenues to money for you will likely be blocked soon. You must use the

trust, yours, to your benefit as much and as soon as possible.

Soon, calls from investors looking for their redemption start to pour in.

They were screaming. They were crying. We had people come to the office

threatening us. I can't blame them. You know, they're angry.

We were angry.

Dr. Brad Lerner says Neil Moody and his wife Sharon break the news to him in

person at his office.

We came into my office and behind closed doors.

Mr. Moody told me directly, face -to -face, that his partner, Nadel, had

disappeared, that the value of all the funds was zero, and that my investment

was gone.

I was startled. I was shaken.

I was angry.

I was shocked.

Lerner says before Moody leaves the office, he asks him for a favor.

Neil showed me this magnificent diamond ring that Sharon was wearing. I've never

seen anything like that in my life.

Two seconds after telling me my retirement money was gone, they had the

ask if I would like to buy that ring, that they were short in cash.

I only wish now I had taken the ring as collateral, but I didn't.

Lerner calls local police and the FBI before turning to John Hilscher, a

at the Sarasota Herald -Tribune.

It was leading news here, and within a few days, it was news across the

Tony Hager's wife spots the headline in their local paper the next day.

I couldn't believe it. I thought, oh, there's something wrong here.

We'll get the money back if, you know, okay, there's something screwed here,

it shouldn't be a problem.

Hager calls Scoop, expecting to be reassured.

I called this one individual and talked to him on the phone. He was in tears.

He said that basically everything's gone.

I got dizzy when that happened, and I told my wife, and we broke down.

Hager loses his entire life savings of $578 ,000.

You realize that you're 68 years old. You have a daughter who's in college or

just graduated from college.

You have a son that you have to put through college. You have a mortgage

you have to pay for.

Your wife is not in particularly best of health.

And so you... Sorry.

You just question, how are you going to make it happen?

Up next, the one -time wizard of Sarasota has magically disappeared,

great mystery in his wake.

He realized it's over.

He decided to run and leave the rest of us to explain for you.

He's a coward.

I still don't fully understand why I did what I did, because it is totally

unlike me.

I'll spend the rest of my remaining few years trying to find the answer to how

that irresistible delusion took hold of me.

By January 18, 2009, the FBI and the SEC have joined the investigation.

into hedge fund manager Arthur Nadel.

Within days, the feds cordoned off his Main Street, Sarasota office.

The office was a crime scene. No one was allowed in. No one was allowed to touch

anything, move anything, do anything.

FBI agents think they're on to Nadel when they track his cell phone to

Louisiana.

His cell phone was pinged in Louisiana.

near New Orleans, apparently through a conversation with Peg Nadel.

After that, the cell phone went silent.

Agents worked feverishly to find him.

In the meantime, the SEC freezes Nadel's assets, and they uncover shocking

financial fraud.

From the inception of the first fund through 2008, Nadel paid himself and his

partners, Neal and Chris Moody, more than $97 million in fees.

Payments the funds could never support.

Clearly, you couldn't maintain an investment fund losing that kind of

especially when you're paying yourself and your partners very high commissions

and fees.

Finally, on January 27, 2009, nearly two weeks after his disappearance,

Arthur Nadel turns himself in to the FBI in Tampa.

Nadel tells Special Agent Mark Munster that he was on vacation in Louisiana,

Texas, and California.

He appears somewhat relieved when he surrendered that this manhunt that had

taken place over a couple of weeks was finally over.

The 76 -year -old faces six counts of securities fraud, one count of mail

and eight counts of wire fraud.

All carry maximum sentences of 20 years in prison.

The judge also puts the scoop funds into receivership.

Attorney Burton Wyant is the receiver working to recoup the cash.

But that involves contentious clawbacks.

And here's how it works.

If you put $100 ,000 in and you took $130 ,000 out, I will sue you for $30

Wyand takes a hard line to get the money back, going after any recipient of

Nadel's false profits.

If Art Nadel gave $300 ,000 to Catholic Charities, Wyand wants that back from

Catholic Charities.

If he gave $250 ,000 to the YMCA or the Sarasota Opera, he wants that money

back.

In February 2009, the cases moved to New York.

where Nadel pleads guilty to a 15 -count indictment.

Nadel, who suffers from a heart ailment, is sentenced to 14 years in a North

Carolina federal prison, the same prison where Bernie Madoff will spend the rest

of his life.

Some people feel like it should have been longer, but given his age, it's

effectively he will never get out of prison. And so, you know, how much more

you sentence a guy?

But that hasn't happened for Chris and Neil Moody.

The Moody's, Nadel's partners, maintain they had no prior knowledge of the

scheme.

I don't think anybody could be that deeply involved for that many years and

be that blind.

The Moody's have settled a civil complaint filed by the SEC.

The father and son have not been criminally charged.

They were making millions of dollars in compensation from these funds. What did

they do to justify those millions of dollars that they took?

Apparently watching out for their clients' money was not one of them.

To some of Nadel's investors and employees, his disbarment years earlier

comes as a major surprise.

People don't give their money to people who are piano players who have been

disbarred. They just don't.

Litigation is pending against Holland & Knight, the law firm that drafted the

private placement memorandums that make no mention of Nadel or his disbarment.

Sarasota attorney Morgan Bentley represents 36 clients who were defrauded

Nadel.

If this type of litigation were to succeed, it would put enormous pressure

the lawyers preparing private placement memorandums.

which up until this point have been able to say, I don't have an independent

duty to investigate.

There are people who never met Art Nadel, who only knew Chris and Neil

only invested with Chris and Neil Moody, only ever heard from Chris and Neil

Moody, and would not know Art Nadel if he came in and slapped him in the face.

Holland and Knight issued a statement saying the firm is, quote, vigorously

defending itself in court.

against unfounded allegations that it is at fault for Arthur Nadel's fraud.

In all, Nadel swindled some 390 investors, many of whom may

never recover.

The net that I lost amounted to $578 ,000, give or take. I have

to work the rest of my life until I, you know, until the end.

Could I have done better due diligence and research?

Sure. But when I get on an airplane, I trust the pilot knows how to fly and I

don't check his credentials.

And when I invest, I trusted in Neil Moody as a person and I left it at that.

The ripple effect of the crime can still be felt in Sarasota today.

If you have 390 people who were supporting all these not -for -profits

were wiped out, those donations...

They were gone.

In an ironic twist, a seeing -eye dog organization now occupies the main

offices of Scoop.

The blind leading the blind.

If enough people assume it's all okay, that it will all work out, then this is

what happens.

It wouldn't have taken much for anyone at the fund to have discovered that

wasn't $350 million in the account. There was merely a few hundred thousand

dollars by simply making a phone call.

And though Shelly Bell understands victims' anger, she says she's also a

She says she lost $300 ,000 and now her house is in foreclosure.

It's just about starting over, you know, trying to...

figure out what I can do now to at least get to a place financially where I can

just be comfortable.

From prison, Nadel maintains that he did not set out to create a Ponzi scheme,

that his crime was not a crime of greed.

Rather, it was a crime of pride.

I think the best lesson that I learned from this is that pride in the hands of

stubborn person.

is a much more powerful and dangerous motivator than greed.

On April 17, 2012, while serving his sentence at Butner Federal Correctional

Complex, Arthur Nadel dies.

He was 80 years old.