Arthur Nadel's attorneys lose bid to free funds for defense

TAMPA - Attorneys for accused Sarasota financier Arthur G. Nadel today failed to convince a federal judge to unfreeze about $250,000 to pay them for helping represent Nadel in an alleged $397 million fraud.

Attorneys from Barry Cohen's Tampa law firm said Nadel's wife, Peg, had money for their fees that she was paid for selling real estate, had earned or received in alimony before she married Nadel in 2001. After the wedding, he said, she commingled her money with Nadel's and deposited it into his now-frozen funds, Scoop Capital and Scoop Management.

Cohen's firm represents Nadel, 76, in a limited way in New York, where he faces one count of federal securities fraud and one count of wire fraud alleging he swindled more than 100 investors nationwide. He is jailed in New York in lieu of $5 million bail and faces up to 20 years in prison on each count.

Defense attorney Todd Foster said Cohen's firm has been talking with federal prosecutors in New York and hopes to resolve the criminal case in the next several weeks. That would mean Nadel could better turn his attention to the U.S. Securities and Exchange Commission case freezing Scoop's assets.

"He's not going to be able to do it by himself," Foster told U.S. District Judge Richard Lazzara this morning. "He needs a lawyer. Judge, he wants to cooperate."

So far, Cohen's firm has piled up $93,185 in fees and costs, according to court pleadings. That's based on a discounted rate of $300 per hour for the attorneys on the case as well as reduced rates for paralegals and investigators. Foster said the proposed attorney's fees were less than what's being paid to the receiver in the case and is a fraction of the firm's usual rate, which he declined to disclose.

But an attorney for the SEC said there was no reason Nadel should pay his defense team with whatever money is left from the investors he defrauded.

Lazzara said it would be a "gross abuse of my discretion" to lift the freeze on assets, which are millions of dollars less than the least amount of money that authorities say Nadel could be liable to repay. He also said he would have liked to hear from Mrs. Nadel, who has her own lawyer and was not present at the hearing, about her money.

After the hearing, Foster said he didn't know whether Cohen's firm would appeal the ruling or what it would decide about continuing to represent Nadel.

If necessary, Lazzara said, Nadel could be represented by court-appointed counsel.

"I recognize that Mr. Nadel finds himself in a very difficult position in both the civil side of the justice system and the criminal side of the justice system," Lazzara said. But he noted that he often tells defendants that he did not bring them to his courtroom. "It's your own action that brings you to this court."

Richard Danielson, Times staff writer

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Comments

[Mike]

Nadel needs to STAY in jail. He has $$$$ for bigtime lawyers, instead he should be paying back those that he bilked. He will get his day in court, but until then jail is a good place for him.