Nadel’s Moody Plot thickens: Who’s Holding Out on Who?
In a follow up to our previous post regarding the Arthur Nadel fraud, more news is being released surrounding the role of the father-son team of the Moody’s.
To refresh memories, the Wall St. Journal reported that Nadel said he acted as a trader for three other funds run by Neil V. Moody and his son, Christopher D. Moody, during the period he committed his fraud. The Moody’s have agreed to be barred from associating with any investment adviser for five years as part of a consent agreement with the SEC. They didn’t admit or deny wrongdoing as part of that agreement. “Neil adamantly denies any knowledge that this was a Ponzi scheme,” said James Felman, a lawyer for Neil Moody.
Now it is being reported that while son Chris Moody has cooperated, receiver Burton Wiand says his father, Neil, refuses to go along — even insisting that he should keep cash and property he acquired from the Ponzi scheme.
Wiand, the man appointed to try to recover money for defrauded investors, outlines vastly different approaches taken by the Moodys in his fifth interim report filed Wednesday in federal court.
The Moody’s received $42 million in fees from the six hedge funds they operated with Arthur Nadel in downtown Sarasota.
The Moodys in January settled civil fraud charges brought by the Securities and Exchange Commission. In that agreement, they consented to give up all “ill-gotten gains” from the scheme.
Wiand says Chris Moody has “cooperated fully” in turning over his assets. In January Moody even gave Wiand power of attorney to help transfer those assets.
“Neil Moody, on the other hand, has not cooperated with the receiver,” Wiand said.
“Neil Moody has taken the position that he would like to maintain some of the assets he owns although they were purchased with misappropriated funds,” he said.
Moody is trying to hold on to bank and brokerage accounts, personal property, real estate and some corporate interests, he said.
Wiand has already seized Moody’s seventh-floor bayfront condo in La Bellesara, a lavish three-bedroom, two-bath unit he bought in 2006 for $2.16 million.
The receiver also has sued Moody and wife Sharon over $28.3 million in profits and redemptions they took from the funds.
Taken earlier from the Moodys was $675,000 in jewelry they owned through their former part-ownership in the Queen’s Wreath Jewels store on St. Armands Key.
From Chris Moody, Wiand said he has recovered cars and a boat, two rental properties and an interest in a third, bank and brokerage accounts and various corporate interests. The receiver will detail those assets in his next report.
The receiver has filed more than 120 lawsuits to recover $32 million in so-called “false profits” from hedge-fund investors. That represents profits they took out that exceeded their actual investments.
It will be interesting to see if the Moody’s will be able to hold onto anything or if investors will be able to recoup their Nadel losses from him.
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