NEW YORK (Reuters) - Arthur Nadel, a fund manager whose $168 million fraud was one of several that collapsed in the declining economy and left hundreds of investors without their money, was sentenced to 14 years in prison on Thursday.
Nadel, 77, dubbed “mini-Madoff” in his home state of Florida after epic swindler Bernard Madoff, was excoriated as “evil” and “a loser” by one of his victims during the sentencing proceeding in U.S. District Court in New York.
“Arthur, you are an evil person,” said businessman Michael Sullivan of Barrington Hills, Illinois.
“I assume you are a narcissistic psychopath” and “just a weak child seething with anger and loathing” who had “little success in life until you founded your fraudulent funds.”
Judge John Koeltl rejected as too long U.S. prosecutors’ requested sentence of between 19-1/2 years and 24 years, citing Nadel’s age and a heart ailment.
But Koeltl said Nadel orchestrated a “massive fraud” on investors, “many elderly and who lost the fruits of their lives,” adding that “it caused financial difficulties to the victims and those close to them.”
The Sarasota-based fund manager obtained more than $300 million from investors across the United States in managing six different funds, stealing about $168 million between January 1999 and January 2009.
Nadel pleaded guilty in February to running a Ponzi scheme, one in which early investors are paid with money from new clients.
Looking thin and frail with one of his sons present in the back of the court, Nadel stood in prison garb and told the judge that he had read letters submitted to Koeltl by many of his 390 victims.
“Their anger and outrage became mine at myself,” Nadel said. “I blame only myself for my acts.”
His court-appointed lawyer had asked the judge to imprison Nadel for just five years, given his life expectancy, so that he would not die in prison.
The scheme crashed with the declining economy in 2008 when more investors demanded redemptions, similar to the fate of New York financier Madoff’s unprecedented multibillion-dollar investment fraud. Nadel disappeared for two weeks after his fraud was revealed in January 2009. He has been jailed since then and denied bail.
Madoff, 72, who also had many investors in Florida, was arrested in December 2008 and is serving a 150-year prison term after pleading guilty in March of 2009.
The case is USA v Nadel, U.S. District Court for the Southern District of New York, No. 09-433.
Reporting by Grant McCool; Editing by Tim Dobbyn, Gary Hill