In mid-January, Sarasota was rocked by the revelation that Scoop hedge fund manager Art Nadel had disappeared, along with most of the $350 million in his funds. If that weren’t dramatic enough, Nadel had left his wife, Peg, a note hinting that he planned to commit suicide.
For the next 10 days, a media storm thundered across the country, as everyone from CNN to NBC’s Brian Williams followed the hunt for "Sarasota’s mini-Madoff." Victims—who included many local charities as well as individual investors—saw their names in newspapers around the country, and some were besieged by the media. During a week of daily calls from Good Morning America, for example, Sarasota artist Virginia Hoffman, who was married to Nadel years ago, even had a FOX TV news truck staked out in her driveway.
Nadel finally turned himself in to the authorities in Tampa; now, six months later, after pleading not guilty, he awaits trial in the same New York jail that has housed Bernie Madoff, while federal investigators and attorneys swarm all over the case. By now we’ve learned that Nadel had been disbarred as a lawyer years ago in New York, and that his partners, who included Peg and former stockbroker Neil Moody and his son, Chris, insist they had no idea the funds were in trouble and that Nadel had acted alone.
Whether or not that’s true, many questions remain. What were the partners really like, and how did they operate? Even more perplexing, why did so many smart, successful people entrust their money to a high-risk, unaudited hedge fund that was run by a single trader and charged massive management fees? (Authorities estimate that the partners had paid themselves close to $100 million over the years.) And what is happening to the victims, from the charities that counted on funds that disappeared or pledges that will never materialize, to the more than 300 investors?
In "Scam," Leslie Glass answers those questions, weaving a complex and compelling tale in which money, greed and social climbing all play starring roles. If ever a writer and her story were a perfect fit, this is the moment. Glass has written 14 novels, including a best-selling crime series, and she both covers and is a part of the Sarasota social world the Scoop partners inhabited. A philanthropist herself, she’s served on not-for-profit boards such as the Asolo Rep and the Reading Festival and chaired major events. As our "Social Detective," she writes about the players and parties during the social season. And she just happened to be researching a book about Ponzi schemes when this story broke.
Sarasota may be cultured and cosmopolitan, but we’re still very much a small town, and that’s especially true of the society world here, where several hundred people attend many of the same glittering black-tie galas, give to each other’s favorite charities, and support each other’s investment and business interests as well. Nadel and his partners were at the very center of that social world, admired for their wealth and respected for their generosity, as they showered millions—"of my money," as one angry investor, who lost not only his own funds but those in his grandchildren’s trust funds, recently described it to us—on worthy local causes.
Glass shows us how that world, which she knows so well, really works, and she also persuaded some prominent inhabitants of it to talk to her about why they invested—and how much they lost. Some put in only the required $100,000 minimum—"play money," they told Glass—but others invested everything they had. One unfortunate woman, Glass told us, actually had $6 million in the Nadel fund and took about half of that out late in 2008 to invest in a different fund. That fund failed at the beginning of January—just a few weeks before she lost all of her money remaining with Nadel.
Glass talked to an elderly widow whose husband had left her well-provided and now is destitute and bewildered. Others shared the pain of seeing appraisers paw through their possessions, or putting their houses on the market in the midst of the current real estate slump. Not every investor was rich—some middle-class professionals lost their life savings, too. One small businessman, who did not want his name used, confided that he had put most of his profits into the fund for years. Now he and his wife, who recently became disabled, have gone from having a comfortable future to being unable to pay their monthly living expenses.
Attorney Morgan Bentley, who is representing some of the victims, says it’s hard for people to grasp the enormity of losses like those. "If you’re mugged—which is a terrible thing—you can eventually recover and put that in the past," he says. But many of these victims will never recover, and they’ve lost not only their money but their entire way of life.
There’s much more to read in this issue, including Kay Kipling’s much-awaited annual theater awards. Kipling attends close to 60 productions every season and reviews many of them on our Web site, sarasotamagazine.com. At the end of the season, she gets out her pile of programs, covered with spidery notes scrawled in the dark, and spends several weeks reliving and reassessing every play. Calm and composed, Kay rarely complains about anything (unlike those of us who whine and worry as every deadline looms), but we’ve learned not to intrude upon her during the incubation of this story. Once again, she’s pulled it all together triumphantly, with a piece that re-creates the season’s most magical onstage moments and as always, makes me wish I’d been there to see more of them myself.
And we’re also presenting the grand finale of Bob Plunket’s "Decorating Can Be Murder" mystery series. I can’t tell you how much I hope you’ve been following the adventures of Mr. Timothy Spryke, the former Wisconsin school teacher who has retired to Sarasota to pursue his dream of working as a decorator—a profession Bob has described as, after plastic surgery, our city’s greatest art form.
We editors can’t wait for each new installment. Yes, it’s extremely funny, with all sorts of knowing comments about local characters and customs, but it’s more than that. Bob, a novelist who’s been called the best modern American humorist by the Washington Post, has created a compelling story with living, breathing characters who tug at your heart and stay in your mind. A deceptively simple writer who’s supremely easy to read, he’s a keen observer with the ability to "make you want to read anything he writes," as one longtime fan describes it.
If you’re a fan, you’re invited to join us at the wrap-up "Decorating Can be Murder" party on July 10, at Home Resource at 741 Central Ave. (And to enter our "Decorating Can Be Murder" trivia contest, see ad at left.) For just $15, you’ll get light fare, drinks and live entertainment featuring Plunket and some of the locals, such as actor Cliff Roles and man-about-town Matt Orr, featured in the story. We think it will be the coolest night of the long, hot summer, and the proceeds will go to Mr. Spryke’s favorite cause—the scholarship programs of the Sarasota chapter of the American Society of Interior Designers. The fun starts at 6 p.m. and space is limited, so be sure to reserve at (941) 358-7737.