NEW YORK (Reuters) - Arthur Nadel, a former Florida fund manager dubbed a “mini-Madoff” for defrauding investors out of $168 million, has died in prison at the age of 80, a spokeswoman for the Federal Bureau of Prisons said on Tuesday.
Spokeswoman Traci Billingsley said Nadel died on Monday. She had no further details. Nadel was in poor health when he was sentenced to serve 14 years in prison in October 2010 after he pleaded guilty in Manhattan federal court in February that year.
Nadel was incarcerated in the same Butner, North Carolina, prison as Bernard Madoff, 73, the epic swindler who is serving a 150-year sentence for running a decades-long multibillion-dollar Ponzi scheme. A Ponzi scheme is one in which early investors are paid with the money of new clients.
Mark Gombiner, the court-appointed lawyer who represented Nadel at sentencing in Manhattan federal court, confirmed Nadel’s death.
“Dying in jail is a very cold and lonely way for anyone to leave this life, but Mr Nadel made some mistakes,” Gombiner said. “He did accept responsibility and he did face his punishment with dignity.”
Nadel, of Sarasota, Florida, admitted to running a Ponzi scheme between January 1999 and January 2009, claiming to investors that he was an attorney and a successful trader. Prosecutors said Nadel used client money to support his lifestyle and to invest in real estate and his wife’s flower shop.
The scheme crashed with the declining economy in 2008 when more investors demanded redemptions, similar to the fate of Madoff. Madoff pleaded guilty in March 2009.
According to court papers, Nadel’s partners insisted on an independent auditor for the funds following Madoff’s arrest in December 2008. One was hired on January 13, 2009 and the next day, Nadel fled. The fund manager disappeared for two weeks before his arrest.
Editing by Andre Grenon