FBI joins search for missing Florida money manager

By Michael Peltier

TALLAHASSEE (Reuters) - A Florida investment manager who disappeared with what could be hundreds of millions of dollars of other people's money remained missing on Sunday, as the investigation into his dealings widened.

The FBI and the U.S. Securities and Exchange Commission have joined the search and investigation for Arthur Nadel, president of Scoop Management Inc, whose reported disappearance Wednesday was followed two days later by complaints from investors who said that funds invested by and through Nadel had disappeared along with him.

Sarasota police said the investigation began on Friday and federal agencies were informed after they received complaints from at least five possible victims, many of whom appeared to have lost more than $500,000.

"What has allegedly gone on also includes federal and other regulatory violations," Capt. William Spitler, spokesman for the Sarasota Police Department, said. "That's why it was important for us to get all the agencies together."

Nadel, 75, left a note for his family that was characterized by a local newspaper as a suicide note.

Police would not disclose its contents but said his family believed he was "distraught" at the time of his disappearance.

Nadel's car was found Thursday afternoon in the parking lot of the Sarasota-Bradenton International Airport. On Saturday, an associate told Reuters that it was believed Nadel was still alive.

On Sunday, Sarasota County Sheriff's Office spokesman Lt. Chuck Lesaltato said the investigation was ongoing and the department could not comment on whether Nadel had left the state or the country. The sheriff's office and the FBI are conducting the missing persons portion of the investigation.

Nadel and his wife Peg were prominent philanthropists and socialites in Sarasota, an upscale community south of Tampa, Florida. The couple was involved in many community organizations including Habitat for Humanity.

Investors can do little but wait to find out what happened to the funds they entrusted with Nadel and companies he associated with.

The YMCA Foundation of Sarasota has about $1.1 million invested in securities handled by Nadel.

"We're like everyone else," YMCA Foundation of Sarasota President Karin Gustafson said. "We're just reading about what's going on and waiting until they find him."

Gustafson said the nonprofit agency invested in a fund managed by Valhalla Management Inc based on the recommendation of Neil Moody, Valhalla founder and Nadel associate who was an executive on the foundation's board of directors.

Moody resigned after news broke on Friday that the funds were gone.

"We based our decision on our trust in Mr. Moody," Gustafson said. "He guaranteed us personally a 10 percent return if the fund did not perform."