A Florida hedge fund manager who worried he'd be labeled a "mini-Madoff" after cheating investors of more than $168 million was sentenced Thursday to 14 years in prison by a judge who agreed to recommend he serve the time at the same prison as Ponzi king Bernard Madoff.
U.S. District Judge John Koeltl also ordered 77-year-old Arthur Nadel to forfeit $162 million, though it is not expected that he has more than a few million dollars in assets.
Nadel, of Sarasota, Fla., went on a two-week, cross-country trip before he surrendered and has been in a federal jail since his arrest in early 2009. He pleaded guilty to securities fraud earlier this year. Prosecutors said 390 clients had invested nearly $400 million with him.
Koeltl rejected requests by Nadel's lawyer that Nadel be sentenced to as little as six years in prison, calling the decade-long crime "a massive fraud perpetrated on vulnerable victims."
The judge noted that Nadel had a heart condition and other ailments, but he said many of the victims were elderly and had suffered physically and mentally as a result of their losses.
One victim, Michael Sullivan of Barrington Hills, Ill., told the judge many victims had told him they thought their lives had been shortened as a result of the pain caused by Nadel. Sullivan said afterward that he wished the sentence had been even more severe.
Nadel said he hoped to one day be free again so he could see his family.
"I've thrown away everything worth living for," he told Koeltl. He said he repeatedly read the more than 100 letters written by victims, hearing their "anger and outrage" and turning it on himself.
"I spend most of my time in examination of my life, not to excuse, but to understand," he said.
Assistant U.S. Attorney Reed M. Brodsky had urged Koeltl to sentence Nadel to 20 to 25 years in prison, saying many victims lost their entire savings. The government has said Nadel defrauded investors by falsely claiming he was a successful attorney and trader, only to spend millions of their dollars on a lavish lifestyle.
Brodsky said Nadel did not seem contrite when he was first arrested, and told the FBI he had been on vacation. Nadel visited Texas and California before returning to Florida.
Letters Nadel sent to family members while on the run showed he was reading newspaper accounts of his conduct and disappearance.
In one letter, Nadel wrote that if "this works out, you can also find me a literary agent," before signing it "The 'disappeared' Art."
In the same letter, Nadel wrote that he appreciated nice things his relatives said about him, adding: "I really anticipated that the press would call me 'mini-Madoff,' honest."
Then he wrote: "My story is pretty sad considering the reasonable alternatives I had."
Madoff, 72, is serving a 150-year sentence for cheating thousands of investors out of billions of dollars. He pleaded guilty to fraud charges last year.
Nadel's lawyer, Mark Gombiner, asked that Nadel be assigned to the Butner Federal Correctional Complex near Raleigh, N.C., where Madoff is housed. The judge agreed.