Securities and Exchange Commission v. Nadel et al

Filing 1020

Unopposed MOTION for miscellaneous relief, specifically PERMISSION TO PROSECUTE LIMITED CROSS-APPEAL by Burton W. Wiand. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C)(Morello, Gianluca)

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

BURTON W. WIAND, as Receiver for
VALHALLA INVESTMENT PARTNERS,
L.P.; VIKING FUND, LLC; VIKING IRA
FUND, LLC; VICTORY FUND, LTD.;
VICTORY IRA FUND, LTD., AND
SCOOP REAL ESTATE, L.P.,
Plaintiff,
v.

Case No. 8:10-CV-166-T-17MAP

BRIAN L. MEEKER, as Trustee for the
BRIAN L. MEEKER TRUST dtd 12/06/1991,
Defendants.
_______________________________________/
REPORT AND RECOMMENDATION
This is one of many cases in this division emanating from a Securities Exchange Commission
enforcement action aimed at dealing with the aftermath of a massive ponzi scheme perpetrated by
Arthur Nadel, a hedge fund manager. See S.E.C. v. Arthur Nadel, et al., Case No. 8:09-cv-87-T26TBM. After the SEC’s action and the appointment of Burton Wiand as the Receiver, Nadel pled
guilty in the Southern District of New York to a fifteen count indictment charging him with
securities fraud, mail fraud, and wire fraud surrounding the events precipitating the enforcement
action. The Receiver has sued numerous hedge fund investors, including Brian L. Meeker
(“Meeker”), seeking to claw back “false profits” under two theories grounded on the same illegal
scheme the indictment tracks: avoidance of fraudulent transfers under Florida’s Uniform Fraudulent
Transfer Act, Fla. Stat. §§ 726.101,et seq. (“FUFTA”), and unjust enrichment.1 Currently, the
1

These types of cases are often called “clawback” actions.

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Receiver moves for summary judgment on a precise but critical issue to the determination of this
action – Nadel operated the hedge funds as a ponzi scheme during the distributions of “false profits”
to Meeker (see docs. 59, 90). After considering Meeker’s responses (docs. 89, 120) and the
summary judgment record, I find that no material dispute of facts exists and recommend the
Receiver’s motion for summary judgment be granted.2 I also recommend Meeker’s motion for
summary judgment regarding the statute of limitations (doc. 93) be denied, and the Receiver’s
motion to strike expert McFarland (doc. 99) be denied.
A. Standard of review
Motions for summary judgment should only be granted when the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, show there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of
law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A court, however,
may only consider “that evidence which can be reduced to an admissible form.” Rowell v. BellSouth
2

The procedural posture of the Receiver’s summary judgment motions warrants an
explanation. This Court convened early Rule 16 conferences in almost all of the more than 150
clawback cases and often grouped several cases at a time for such conferences in order to
facilitate conversations and cooperation among counsel. To a degree, that effort proved efficient
as many cases settled and many defendants shared common resources. Based on discussions
with the parties at those conferences, the Court agreed to stagger the summary judgments.
Initially, the Receiver would file a motion for partial summary judgment on the liability issue, as
the Receiver did here (see doc. 59). That motion sought a finding as a matter of law that Nadel
operated a Ponzi scheme from the inception. Dependent on the ruling, the Receiver would file
another summary judgment motion on damages (i.e., the demand for false profits). Given the
number of cases pending, this bifurcated process, in hindsight, turned out to be too unwieldy.
With case-management deadlines pressing, the Receiver filed another motion for summary
judgment (doc. 90). Unlike the first, this one sought a summary judgment ruling on liability and
damages. The upshot of all this is that the two motions merge for decisional purposes, and the
Court has considered Meeker’s responses to the motions. As with all the dispositive motions in
this case and the other clawback cases, the district judge has referred them to me for reports and
recommendations.
2

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Corp., 433 F.3d 794, 799 (11th Cir. 2005). The existence of some factual disputes between the
litigants will not defeat an otherwise properly supported summary judgment motion; “the
requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986)(emphasis in original). The substantive law applicable to the claimed causes
of action will identify which facts are material. Id. In considering the evidence, the court resolves
all reasonable doubts about the facts in favor of the non-moving party and draws all justifiable
inferences in its favor. Hickson Corp. v. Northern Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th
Cir. 2004). While the court does not weigh the evidence or make findings of fact, see Anderson, 477
U.S. at 249-50, “[w]hen opposing parties tell two different stories, one of which is blatantly
contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that
version of the facts for ruling on a motion for summary judgment.” Scott v. Harris, 550 U.S. 372,
380 (2007).
B. Background
This case is one of numerous clawback actions the Receiver has filed in this division. With
a few exceptions, all the complaints are alike in their recitals about Nadel, his conduct, and the
Receiver’s causes of action against a defendant. Any differences are due to the peculiarities of the
defendant and the dates and the amounts of the specific distributions made to a defendant. Here, for
example, the Receiver alleges Meeker received distributions from January 3, 2006 through
September 11, 2007, totaling $645,641.67 in false profits. See complaint (doc. 1, ex. A); Yip Decl.
¶ 3, September 27, 2012 (doc. 91).3 In a number of cases, including this one, the Receiver has
3

Per the complaint, Meeker invested in Viking Fund. Viking Fund is a Delaware
Limited Liability Company formed in March 2001, and its managing member was Viking
Management. Viking Management retained Nadel and Scoop Management as the investment
3

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moved for summary judgment on a discreet factual determination that goes to the heart of his
FUFTA claims – that Nadel operated the hedge funds as a ponzi scheme from their inception.
Frankly, the Receiver frames the factual issue more broadly than required. Instead, the case-specific
questions should be: Did Nadel operate the hedge funds as ponzi scheme when he made the
distributions to Meeker, and if so, is the evidence so one-sided that the Receiver is entitled to
summary judgment on this issue as a matter of law? Before answering those questions, however,
it is helpful to understand the events leading up to the Receiver’s current partial summary judgment
motion and FUFTA’s application to a clawback case like this one.
1. the events leading up to the current motion
Because these clawback cases presented overlapping legal arguments and a core of common,
relevant facts, the Receiver initially filed an omnibus motion for partial summary judgment directed
to a number cases, including Meeker (see doc. 27, ex. A).4 In that motion, the Receiver argued for
the same factual determination he seeks in his current motion before the Court (i.e. Nadel operated
the hedge funds as a ponzi scheme from the earliest hedge fund’s inception (1999)). But the prior
motion differs significantly from the latter one as both sides have added to the summary judgment
record and a new development occurred – Nadel’s death. See Supplement to Receiver’s Renewed
Motion for Partial Summary Judgment, doc. 63.
a. the Receiver’s first partial summary judgment attempt
In the first motion, the Receiver proffered certain items: Nadel’s indictment, Nadel’s plea

advisor, and as investment advisor, Nadel purported to direct and execute the vast majority of
Viking Fund’s investment and trading activities. See complaint, ¶¶ 23-29. See also Wiand Decl.
(doc. 60).
4

The district judge referred these motions to me for reports and recommendations.
4

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transcript and plea agreement letter, the government’s sentencing memorandum, the criminal
judgment, and some of Nadel’s letters and personal memos. Armed with this record, the Receiver
argued that the clawback defendants, including Meeker, should be “precluded from litigating facts
necessarily established” by Nadel’s guilty plea in the Souther District of New York (see doc. 27 at
10). Such a finding would have created the irrefutable presumption of an actual intent to defraud
creditors beginning in 1999, the start date of the ponzi scheme. I interpreted the Receiver’s
argument to be a form of offensive collateral estoppel or some stand-alone doctrine of preclusion
(e.g., doc. 27, at 10 n.3). Many defendants, including Meeker, objected to this novel theory along
two themes: offensive collateral estoppel did not apply to them and they needed to conduct
additional discovery. After considering the Receiver’s omnibus motion and the numerous responses
made by the clawback defendants, I concluded offensive collateral estoppel did not apply. See doc.
52, Omnibus Order dated February 3, 2012.5 Nonetheless, I deferred any consideration of the
motion’s remaining aspects for a number of reasons so that the defendants could conduct further
discovery and the Receiver could supplement the summary judgment record and address my
evidentiary concerns about the then state of the record.6 Id. Despite the fact that I deferred issuing

5

The Receiver continues to make his “preclusive effect” arguments even after my
February 3 Order. I summarize the reasons why I rejected that argument in that Order here.
Offensive collateral estoppel occurs when a plaintiff seeks to foreclose the defendant from
litigating an issue the defendant previously litigated unsuccessfully in an action with another
party. Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 326-27 (1979). Nadel was not a party
to any of the clawback actions, and the defendants obviously were not defendants in Nadel’s
criminal action; accordingly, precluding the clawback defendants from being heard on the factual
matters raised in their respective cases violated due process. Id. at 327 n.7. For these reasons
and those outlined in the February 3 Order, the Receiver’s arguments on this score are not well
taken.
6

I also determined that Nadel’s letters and memos were clearly inadmissible hearsay
under Fed. R. Evid. 804(b)(3) because the Receiver had not shown Nadel to be unavailable as a
5

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a report and recommendation on the Receiver’s initial partial summary judgment, the February 3
Order has distinct, contextual relevance to the current summary judgment record.
b. the February 3 Order
Aside from putting off the consideration of the summary judgment issues until further
discovery could occur, the February 3 Order forewarned the parties, and particularly the clawback
defendants (including Meeker), about two interrelated points I considered important to the
determination of any future summary judgment motion. The first reminded the clawback defendants
about their obligations when responding to a summary judgment motion:
[I]f the moving the moving party makes the required showing, the burden shifts to
the non-moving party to rebut that showing by producing counter-evidence in
admissible form, Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); and the
existence of some factual disputes between the litigants will not defeat an otherwise
properly supported summary judgment motion unless the dispute presents a “genuine
issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)
(emphasis in original).7
The second point underscored the evidentiary significance of Nadel’s criminal proceedings
for summary judgment purposes. In short, while Nadel’s judgment did not carry any preclusive
effect (as the Receiver argued), the clawback defendants could not ignore the summary-judgment
heft of the criminal proceedings and the significant evidentiary hurdle those proceedings posed to
them. My admonitions about this were specific (doc. 52 at 7-9)8:

witness under Fed. R. Evid. 804(a). Because a court evaluating a summary judgment motion
may only consider that evidence which can be reduced to an admissible form, these items were
unacceptable for summary judgment purposes. See Rowell, 433 F.3d at 800.
7

See doc. 52 at 4.

8

For the ease of the reader, the footnotes appearing in the February Order are not copied
in the body of the quoted text but as a newly numbered footnote which identifies the copied
footnote in the Order.
6

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Nadel’s plea transcript, however, is appropriate for summary judgment
consideration either under Fed. R. Evid. 807 or as a declaration or deposition for
purposes of Rule 56(c). In short, the plea transcript carries a heightened standard of
reliability and trustworthiness. See In re Slatkin, 525 F.3d 805, 812 (9th Cir. 2008)
(applying Rule 807’s residual hearsay exception due to proceeding’s reliability);
Scholes v. Lehmann, 56 F.3d 750, 762 (7th Cir. 1995) (a defendant’s admissions in
a guilty plea proceeding and in a plea agreement that is part of the guilty plea carry
“veracity safeguards” exceeding a deposition). The same would be true for Nadel’s
sentencing hearing transcript, although Wiand does not include it with his motion.
Particularly significant is Fed. R. Evid. 803(22)(C)’s application, which
Wiand does not address. That rule, which applies irrespective of the declarant’s
availability, states that evidence of a final judgment of conviction based on a guilty
plea is admissible if the evidence is admitted to prove “any fact essential to the
judgment.” See Scholes v. Lehmann, 56 F.3d at 762 (applying rule in clawback
action at summary judgment stage).9 Of particular evidentiary significance, which
none of the parties mention, is the judgment’s order directing Nadel to pay
$174,930,211.07 in restitution. This figure, which corresponded to the loss
calculation for guideline sentencing purposes, covers losses the fraud victims
incurred from 1999 to 2009.10 So too is the amount Nadel forfeited to the

9

As the Order noted (doc. 52 at n.10):
Per Rule 802(22)’s advisory committee note, “[w]hen the status of a former
judgment is under consideration in subsequent litigation, three possibilities must
be noted: (1) the former judgment is conclusive under the doctrine of res judicata,
either as a bar or a collateral estoppel; or (2) it is admissible in evidence for what
it is worth; or (3) it may be of no effect at all … The rule does not deal with
substantive effect of the judgment as a bar or collateral estoppel. When, however,
the doctrine of res judicata does not apply to make the judgment either a bar or a
collateral estoppel, a choice is presented between the second and third
alternatives. The rule adopts the second for judgments of criminal conviction of
felony grade.”
10

As the Order noted (doc. 52 at n. 11):
From the government’s sentencing memorandum (by its silence on the issue), it
appears that Nadel did not contest the probation officer’s loss calculations as set
out in the presentence report. Fed. R. Crim. P. 32(c)-(f). The presentence report
and any addendum to it serve the same purpose as a pretrial stipulation in a civil
bench trial, with the report setting out the factual and legal backdrop for the
upcoming sentencing hearing and the addendum listing the disputed factual and
legal issues that the court must decide. United States v. Wise, 891 F.2d 970, 972
(11th Cir. 1989). Nadel’s failure to object acknowledged the accuracy of the
7

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government ($162 million).11 Both amounts are dependent on facts essential to their
calculations.
The statutory sentencing scheme enforces the adjudicatory effect to be given
to the restitution order. For example, 18 U.S.C. § 3664(l) provides:
A conviction of a defendant for an offense involving the act giving
rise to an order of restitution shall estop the defendant from denying
the essential allegations of that offense in any subsequent Federal or
State civil proceeding, to the extent consistent with State law, brought
by the victim.12
And per 18 U.S.C. § 3664(m)(1)(B), at the request of a victim named in the
restitution order, the clerk is required to issue an abstract of judgment certifying the
judgment in the victim’s favor as noted therein and thereby allowing the victim to
enforce the judgment as lien on property of the defendant. The upshot of Rule
803(22) is that the Defendants are not looking at a blank summary judgment slate.
The Order’s conclusion again reminded the defendants about their burden-shifting obligations

probation officer’s loss calculation. Of course the sentencing transcript would
clearly speak to this issue as would the forensic accounting proof supporting the
loss calculations.
11

As the Order noted (doc. 52 at n. 12):
Of particular note in criminal forfeitures like Nadel’s is the relation-back doctrine,
which operates retroactively to vest title in the government effective as of the time
of the act giving rise to the forfeiture. United States v. Bailey, 419 F.3d 1208,
1213 (11th Cir. 2005). See also United States v. 92 Buena Vista Ave., 507 U.S.
111, 125 (1993). Wiand does not include the forfeiture order issued by the court
in the Southern District of New York.

12

As the Order noted (doc. 52 at n. 13):
Although I find no cases interpreting the scope of 18 U.S.C. § 3664(l), the
provision simply implements issue preclusion or collateral estoppel principles. By
its strict wording, it plainly would not apply to these clawback actions as they are
not technically suits initiated by a “victim,” despite Wiand’s equitable, fiduciary
obligations to the victims. However, the practical effect of Nadel’s conviction is
that he will not be able to deny essential facts that judgment necessarily
incorporates. Scholes v. Lehmann, 56 F.3d at 762 (when considering summary
judgment motion, a witness should not be permitted by a subsequent affidavit to
retract admissions made in plea agreement).
8

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under the summary judgment scheme: “Nadel’s criminal conviction, and the facts it necessarily
embraces, not to mention the accessible proof available from that prosecution, are convincing
evidentiary hurdles Wiand puts out for the Defendants to meet.” See doc. 52 at 9-10.
c. new evidentiary material and Nadel’s death
The Receiver’s summary judgment papers move for the same factual finding as the original
motion for partial summary judgment but add new evidentiary material including: the criminal
judgment against Nadel on counts one through and fifteen in the indictment, the restitution order
included within that judgment in the amount of $174,930,311.07, the sentencing transcript, the
forfeiture order, and the declaration of forensic accountant Maria Yip. See docs. 73-17; 73-18; 7319; 61 (Yip Decl., March 23, 2012); 67 (Yip Supp Decl., May 11, 2012); 82-1 (Revision to Yip
Decl., July 19, 2012); 91 (Yip Decl., Sept. 27, 2012); 101 (Yip Decl., Oct. 11, 2012). Moreover, in
light of Nadel’s death on April 16, 2012, the previous complaints about Nadel’s personal letters and
memos dissipated. The Receiver now satisfied the unavailability demands of Fed. R. Evid. 804(a),
and Nadel’s statements against interest are appropriate evidentiary considerations for summary
judgment purposes.
2. FUFTA
A vast majority of states have adopted the Uniform Fraudulent Transfer Act (UFTA), an act
“designed to prevent debtors from transferring their property in bad faith before creditors can reach
it.” BMG Music v. Martinez, 74 F.3d 87, 89 (5th Cir. 1996). Federal district and bankruptcy courts
adopt a largely uniform practice allowing receivers to bring suits under UFTA against ponzi scheme
investors to the extent that investors have received payments in excess of the amounts invested and
those payments are avoidable as fraudulent transfers. Donell v. Kowell, 533 F.3d 762, 770 (9th Cir.
9

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2008) (“the policy justification is ratable distribution of remaining assets among all defrauded
investors”). Hence, the innocent “winners” in a ponzi scheme should not be permitted to “enjoy an
advantage over later investors sucked into the ponzi scheme who were not so lucky.” Id. citing In
re United Energy Corp., 944 F.2d 589, 596 (9th Cir. 1991).
Under Florida’s version (“FUFTA”) (see Fla. Stat. § 726.101, et seq.), like other UFTA
schemes, a receiver may proceed under two theories, actual fraud or constructive fraud. See e.g.
Wiand v. Waxenberg, 611 F.Supp. 2d 1299, 1318-19 (M.D. Fla. 2009); In re World Vision
Entertainment, Inc., 275 B.R. 641 (M.D. Fla. 2002). And in count I, the Receiver proceeds under
both of these theories. Under Fla. Stat. §726.105(1)(a), codifying actual fraud, the Receiver claims
the transfers of false profits were fraudulent because Nadel (the debtor) caused the hedge funds to
make the transfers to Meeker as part of a scheme with actual intent to hinder, delay, or defraud
creditors of Nadel, the fund managers and/or the hedge funds.13 As such, the Receiver alleges a
right to repayment of the investors’ commingled principal investment money in an amount
equivalent to Meeker’s false profits from one or more of the hedge funds. The Receiver also
proceeds under Fla. Stat. §§ 726.105(1)(b) and 726.106(1), for constructive fraud.14 See doc. 1, ¶¶

13

The Receiver alleges that in light of the right to repayment, the hedge funds have a
claim against Nadel and consequently are creditors of Nadel under FUFTA; thus, Nadel is a
debtor under FUFTA. For this case, the Receiver contends that the transfers of false profits to
Meeker were inherently fraudulent because they were made as part of Nadel’s scheme. As
representative of the receivership entities (the hedge funds), the Receiver asserts he is entitled to
avoid and recover transfers equal to the amount of false profits that Nadel caused the hedge funds
to make to Meeker, and any other pertinent remedy available under Fla. Stat. §726.108, because
the money was commingled among hedge funds and Nadel used the hedge funds as a single,
continuous scheme. See doc. 1, ¶¶ 105-112.
14

A transfer is fraudulent under a theory of constructive fraud if the transferor does not
receive reasonable value in exchange and the transferor either (1) was engaged or was about to
engage in a business or a transaction for which the remaining assets of the transferor were
10

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109-112.
Where a debtor engages in a ponzi scheme, proof of a ponzi scheme satisfies UFTA’s “actual
intent to hinder, delay, or defraud creditors” requirement. See Donell, supra, 533 F.3d at 770-71
citing Scholes v. Lehmann, 56 F.3d 750 (7th Cir. 1995) (general rule is that to extent innocent
investors received payments in excess of amounts of principal originally invested, payments are
avoidable as fraudulent transfers); Wiand v. Waxenberg, 611 F.Supp.2d 1299, 1312 (M.D. Fla. 2009)
citing In re McCarn’s Allstate Fin. Inc., 326 B.R. 843, 850 (M.D. Fla. 2005) (existence of a ponzi
scheme suffices as a matter of law to prove actual intent to defraud for purposes of Fla. Stat.
§725.105(1)(a)). To prove a ponzi scheme, the Receiver must establish: (1) deposits made by
investors; (2) the Receivership Entities conducted little or no legitimate business operations as
represented to investors; (3) the purported business operations of the Receivership Entities produced
little or no profits or earnings; and (4) the source of payments to investors was from cash infused by
new investors. Waxenberg, supra, at 1312. Here, the Receiver’s motion for summary judgment
adopts this ponzi-scheme method to establish that the monies transferred to Meeker were fraudulent
transfers in violation of §726.105(1)(a).

unreasonably small in relation to the business or transaction; (2) intended to, believed, or
reasonably should have believed that he or she would incur debts beyond his or her ability to pay
them as they became due; or (3) was insolvent at the time of the transfer. See Fla. Stat. §§
726.105(1)(b)(1)-(2) and 726.106(1). The Receiver asserts that the transfers were also fraudulent
under Fla. Stat. § 726.105(1)(b) because Nadel caused the hedge funds to make those transfers
and Nadel, the fund managers, and the hedge funds were engaged or were about to engage in a
business or transaction for which their remaining assets were unreasonably small in relation to
the business or transaction, or Nadel intended that he, the fund managers, and/or the hedge funds
incur, or believed or reasonably should have believed they would incur, debts beyond their ability
to pay as they became due. Finally, the Receiver asserts that the transfers were fraudulent under
Fla. Stat. § 726.106(1) because neither Nadel, the fund managers, nor the hedge funds received a
reasonably equivalent value in exchange for those transfers to Meeker, and Nadel, the fund
managers, and the hedge funds were insolvent at all relevant times. See doc. 1, ¶¶ 110-111.
11

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Although the Receiver points to the start date of Nadel’s scheme as the critical date, the
relevant period is the time of the transfers. In re Old Naples Sec., Inc., 343 B.R. 310, 319 (M.D. Fla.
2006) (examining intent at time transfers made when interpreting Fla. Stat. §726.105(1)(a)); Veigle
v. U.S., 873 F.Supp. 623 (M.D. Fla. 1994) (determining transferor’s intent to defraud at time transfer
made for purposes of Fla. Stat. 726.105(1)(a)); Bay View Estates Corp. v. Southerland, 154 So. 894
(Fla. 1934) (fraud rests upon debtor’s intent at time of the transfer). Hence, whether Nadel operated
the hedge funds as ponzi scheme as early as 1999, as the Receiver proposes, is an unnecessarily
broad question to examine. See doc. 1, ex. A. For Meeker, the relevant time is from January 3,
2006 through September 11, 2007, the beginning and ending dates of its distributions. Accordingly,
if the Receiver’s ponzi-scheme evidence for this period is one-sided (i.e., the evidence of actual
intent to hinder, delay, or defraud creditors is so one-sided), the Receiver is entitled to summary
judgment on the issue. Anderson, 477 U.S. at 255 (when confronted with a summary judgment
motion a court must decide “whether the evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one party must prevail as a matter of law”);
Hickson Corp. v. Northern Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th Cir. 2004) (same).
C. Discussion
With the above principles in mind, the summary judgment record overwhelmingly points to
the fact that Nadel operated the hedge funds as a ponzi scheme by the time Meeker received its first
distribution in January 2006. In sum, the Receiver’s forensic accountant confirms what Nadel
admitted in his criminal proceedings and that court adjudicated. Even when the summary judgment
record is viewed in Meeker’s favor, Meeker offers little to overcome the Receiver’s properly
supported motion.
12

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1. an overview of the scheme
From 1999 through January 2009, Nadel, through Scoop Capital, LLC (“Scoop Capital”) and
Scoop Management, Inc. (“Scoop Management”), along with Christopher Moody and Neil Moody,
through Valhalla Management, Inc. (“Valhalla Management”) and Viking Management, LLC
(“Viking Management”) (Scoop Capital, Scoop Management, Valhalla Management, Viking
Management are collectively the “fund managers”) managed certain hedge funds including Valhalla
Investment Partners, L.P. (“Valhalla Investment”), Viking Fund, LLC (“Viking Fund”), Victory IRA
Fund, LLC (“Viking IRA Fund”), Victory Fund, Ltd. (“Victory Fund”), Victory IRA Fund, LTD
(“Victory IRA Fund”), and Scoop Real Estate, LP (“Scoop Real Estate”). And throughout this
period, Nadel misrepresented the hedge funds’ performance. By defrauding investors through his
control over the fund managers and the hedge funds, Nadel raised over $350 million dollars from
hundreds of investors. While a large majority of hedge fund investors received no distributions of
purported profits, or received distributions in amounts less than their investments, a number of
investors received hedge fund distributions that exceeded their investments.
In late 2008 or early 2009, the house of cards crashed. The SEC filed an emergency action
in this division on January 21, 2009, asking for a wide-ranging temporary injunction freezing
Nadel’s assets, requiring him to provide a sworn accounting, and prohibiting his travel outside the
United States. The district judge quickly granted the request. See Securities and Exchange
Commission v. Arthur Nadel, et al., Case No. 8:09-cv-87-T-26TBM. Coinciding with these events,
a magistrate judge in the Southern District of New York issued a warrant for Nadel’s arrest based
on a complaint charging Nadel with securities fraud and wire fraud. At some point during all this

13

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(and likely before the enforcement order), Nadel fled.15 Eventually, the complaint in the Southern
District ripened into a fifteen-count indictment that charged Nadel with securities fraud (counts one
through six), mail fraud (count seven), and wire fraud (count eight through fifteen). Nadel pleaded
guilty to all the counts, was sentenced to 168 months in confinement, and ordered to pay
$174,930,311.07 in restitution (doc. 60). He died in prison on April 16, 2012.
2. Yip’s analysis
The Receiver submits the analysis of his forensic accountant, Maria M. Yip (“Yip”), to
support his contention that Nadel operated the hedge funds as a ponzi scheme. Yip analyzed records
from 29 bank accounts, 24 brokerage and trading accounts, the hedge funds and fund managers’
books and records, accounting records of the receivership entities, Advent Software investor
accounting system activity, member status reports, tax records for Traders Investment Club and the
receivership entities, and reports prepared by Riverside Financial Group analyzing account activity
for brokerage accounts (“the Nadel documents”).16 Yip opines that from at least December 1999
through January 2009, Nadel through the fund managers managed the hedge funds and grossly
misrepresented their performance, and defrauded investors through his control of the hedge funds

15

All this is in the public record. Nadel was arrested and appeared in this division for
removal proceedings on the Southern District’s warrant. See United States v. Arthur G. Nadel,
Case No. 8:09-MJ-1039-MAP (doc. 5).
16

Affidavits such as Yip’s have routinely been admitted to demonstrate that an enterprise
operated as a ponzi scheme and was consequently insolvent. Stenger v. World Harvest Church,
Inc., 2006 WL 870310, *11 (N.D. Ga. 2006) citing In re Lake Country Invs., 255 B.R. 588, 59596 (Bankr. N.D. Idaho 2000) (expert affidavit sufficient); In re Ramirez Rodriguez, 209 at 431
(expert affidavit sufficient); In re Colonial Realty Co., 209 B.R. 819, 821-22 (Bankr. D. Conn.
1997) (expert affidavit sufficient); In re Taubman, 160 B.R. 964, 976-80 (Bankr. S.D. Ohio
1993) (expert affidavit sufficient); In re Int’l Loan Network, Inc., 160 B.R. 1, 7-10 (Bankr.
D.D.C. 1993) (expert affidavit and prior judicial decisions sufficient).
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(Yip Decl. ¶ 25, March 23, 2012).17 Yip further opines:
Based on our review and analysis of the documents, Nadel in combination with
Christopher Moody and Neil Moody raised at least $327 million from investors
between May 1999 and January 2009. The money was raised in connection with
more than 700 investor accounts. The money was raised as part of a single,
continuous Ponzi scheme. Investors received statements (“Investor Statements”) on
a monthly basis for each of their respective accounts. These Investor Statements
showed purported appreciation and increase in Investor Account balances that were
in fact not true. Providing these fictitious balances not only maintained the investors
“in the dark” about the actual performance of these funds but just as important, it
served as the basis for the Management Fees that the Fund Managers charged to each
of the Investor Accounts.
Yip Decl. ¶¶ 47-50, March 23, 2012; Revision to Yip Decl. ¶8 (revising amount raised from $336
million to $327 million based on further review and analysis), July 19, 2012. Yip’s review of the
financial records and comparison of balance of principal invested by investors according to the K-1s
issued by the hedge funds with the actual balance in the bank, brokerage and trading accounts during
the years 1999 through 2008 revealed that Nadel significantly misrepresented the values in the
investor accounts and the investor accounts had a fraction of the purported balances (Yip Decl. ¶59,
March 23, 2012; Revision to Yip Decl. ¶9, July 19, 2012). She finds, based on a comprehensive
review of the books and records of the hedge funds, that the funds were insolvent as early as 2000
and through and including January 2009 (Yip Decl. ¶82, March 23, 2012; Revision to Yip Decl. ¶10,
July 19, 2012).
Yip states that Nadel, in combination with Christopher Moody and Neil Moody, raised $327
million from investors in connection with more than 700 investor accounts between May 1999 and

17

Yip relied upon a memo/letter of Nadel’s dated on or about February 5, 2009, that he
provided false gains as early as 1998. See Yip Decl n.2, March 23, 2012 (citing U.S. v. Nadel,
U.S. District Court for the Southern District of New York, case no. 1:09-cr-00433-JGK (doc. 716)).
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January 2009. See Yip Decl. ¶¶ 47-48, March 23, 2012; Revisions to Yip Decl. ¶8, July 19, 2012.
Her report indicates that investors received monthly statements for each of their respective accounts
showing purported appreciation and increase in investor account balances that were in fact not true.
Yip Decl. ¶ 50, March 23, 2012. Nadel controlled a number of bank, brokerage, and trading
accounts from July 1999 through January 2009, and he transferred money received from investors
among a number of those accounts. Investor funds were directly deposited into bank accounts
maintained at SouthTrust (later acquired by Wachovia), Bank of America, and Northern Trust, and
funds from these bank accounts were transferred to brokerage accounts for the purpose of investing
the investors’ funds. Yip Decl. ¶¶ 51-53, March 23, 2012. Funds from these brokerage accounts
were transferred back to the Hedge Funds’ respective bank accounts to pay management fees based
on purported account balances, management fees based on purported profits, and redemptions to
investors. Nadel also transferred funds from these brokerage accounts to other accounts he
controlled, including personal bank accounts at Wachovia Bank with names similar to Hedge Fund
accounts. Yip Decl. ¶¶ 55-56, March 23, 2012. According to Yip, “Nadel created these accounts
for two Hedge Funds on whose behalf he did not have authority to act ... [and he] had complete
access and control of the funds deposited into these accounts.” Yip Decl. ¶ 56, March 23, 2012.
Yip further declares that Nadel pooled funds received from investors and deposited into
accounts, commingled these funds with other investors’ money, and transferred the money from
those accounts into other bank, brokerage, and trading accounts in which the money was further
pooled and commingled with other investors’ money. Yip opines that her review revealed that
“Nadel pooled and commingled investors’ monies regardless of with which Hedge Fund the monies
had been invested; that Nadel not only commingled the monies in these accounts, he would also
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transfer funds into the brokerage accounts as necessary in order to have sufficient funds from which
to pay redemptions; and that these funds would be transferred from the Hedge Fund brokerage
account to the Hedge Fund bank account from which the investor would receive his or her
redemption.” Yip Decl. ¶ 58, March 23, 2012.
According to Yip, the balances of the principal invested by investors, as reflected by the K-1s
issued by the Hedge Funds during the years 1999 through 2002, clearly showed that Nadel
significantly misrepresented the values in the investor accounts, which had only a fraction of the
purported balances. Yip Decl. ¶ 59, March 23, 2012; Revisions to Yip Decl. ¶9, July 19, 2012. See
Table comparing balance of principal invested compared to actual account balances; Yip Decl. Ex.
59, March 23, 2012, containing balances purportedly in the accounts for the investors at each quarter
end during the period of January 2003-December 2008. For example, according to Advent’s investor
statements, at the end of the first quarter of 2003 investors had invested a total of $49,363,230 with
Nadel and the hedge funds, when in actuality the total balances in the bank, brokerage and trading
accounts were $19,987,238. And, at the end of the fourth quarter of 2008, investors had invested
a total of $294,512,345 with Nadel and the hedge funds when in actuality the total balances in the
bank, brokerage and trading accounts were $1,338,471. Yip Decl. ¶ 61, March 23, 2012.
Yip concludes that analysis showed that for each quarter between the first quarter of 2003
and the fourth quarter of 2008, the Hedge Funds always had significantly less money in the financial
accounts than the amounts deposited by investors. Yip Decl. ¶ 64, March 23, 2012. Moreover,
Nadel also controlled Traders Investment Club, another investment vehicle purportedly operated
separately from the hedge funds. Yip opines that, similar to the hedge funds, Nadel represented to
investors that he had achieved high rates of return in order to induce investors to invest. Yip Decl.
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¶ 28, March 23, 2012. Yip reviewed Traders’ brokerage statements, Traders’ bank statements, yearly
federal income tax returns, Partners’ Capital Balances statements from Advent and Individual
Account Statements, and concluded that Nadel utilized investor principal to pay new investors, and
in fact, used investor monies from the hedge funds to pay for Traders’ investors’ redemptions. Yip
Decl. ¶¶ 65-72, March 23, 2012. As early as 2003, Traders did not have the assets necessary to pay
the amounts represented as owed to investors, and investor distributions were paid with new investor
funds, often from the Hedge Funds. Yip Decl. ¶ 74, March 23, 2012.
Nadel’s records, according to Yip, show that Nadel lost more than $23 million over the
period of September 1999 through December 2008. Specifically, Scoop Real Estate LP lost
$6,637,880; Valhalla Investment Partners lost $3,114,011; Victory Fund Ltd. And Victory Funds
IRA Fund lost $4,209,134; and Viking Fund LLC and Viking IRA Fund, LLC lost $9,116,715. Yip
Decl. ¶ 78, March 23, 2012. Yip’s review did not reveal any other sources of funding for Nadel’s
hedge funds or fund managers other than a negligible amount from Scoop Real Estate representing
less than 1% of the funds. Yip Decl. ¶ 79, March 23, 2012. After a comprehensive review of the
books and records of the hedge funds that the funds were insolvent as early as 2000 and through and
including January 2009.18 Revisions to Yip Decl. ¶10 Table, July 19, 2012 (reflecting year end
18

Yip defined solvency as “an entity that has sufficient current assets to meet or exceed
current liabilities.” She defined insolvency to the extent that “liabilities exceed the assets of the
entity and its ability to meet these obligations.” The books and records reviewed included bank
statements, check copies, cancelled checks, wire transfer documentation, deposit slip, deposit
confirmations, tax returns filed by the Hedge Funds, QuickBooks records and information
maintained on the Advent system. Yip additionally reviewed correspondence in which Nadel
admitted to: using all of our liquid assets to cover redemptions and withdrawals, nothing is left.”
in a letter to his wife, Peg. The assets were calculated based on detailed analysis of actual
balances in each bank and brokerage accounts as well as other assets recorded by the Hedge
Funds in its QuickBooks records. The liabilities were calculated as the obligations to the
investors for the principal they had invested and liabilities recorded by the Hedge Funds in its
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insolvency for years 2000-2002). See also Revisions to Yip Decl. Ex. 61 (Revised), July 19, 2012
(providing quarterly information reflecting insolvency during period of 2003-2008).
Meeker is one of the investors who experienced a net gain or “false profits.” According to
Yip, Meeker deposited a total of $1,250,000 in Nadel’s scheme. More particularly, Meeker invested
$1,000,000 in December 2003 and $250,000 in December 2004, all in Viking Fund, LLC (“Viking”).
And, according to the Receiver, Meeker received distributions totaling $1,895,641.67: $700,000 in
January 2006, $500,00 in March 2006, $200,000 in January 2007, $200,000 in April 2007, $290,000
in September 2007, and $5,641.67 in September 2007. Hence, these “false profits” amount to
$645,641.67 (the amount received from the scheme in excess of the amounts invested). See Yip
Decl.¶ 3, Sept. 27, 2012. There is no dispute as to whether Meeker received these distributions. See
Morello Decl., ¶5, Meeker’s responses to Receiver’s First Set of Requests for Admissions, Ex. D
and E to Morello Decl.
Yip’s concluding opinions are:
1. In order for Nadel to sustain his investment operations, he required a
continuous infusion of contributions from his investors. The infusion of new funds
into his operation from new and existing investors allowed Nadel to meet the initial
investors’ request for redemptions. With the exception of the de minimus rental
income that was generated, there is no indication of any other sources of income that
Nadel could have used to pay the existing investors.
2. Nadel created the classic Ponzi scheme by paying existing investors with
deposits from new and existing investors. In my opinion, based on the extensive
information that I have reviewed, it is evident that the combination of the actual
losses coupled with the ever growing management fees (based on inflated balances
from purported gains) caused the ultimate collapse of this Ponzi scheme because
there was no way for Nadel to meet the investors’ redemption requests without the
use of new funds from existing investors and funds from new investors.

QuickBooks records. Yip Decl. ¶¶ 80-81, 83-86, March 23, 2012.
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3. Based on my analysis of the information that we reviewed, it is clear that
Nadel operated a Ponzi scheme through Hedge Funds and Fund Managers from at
least May 1999 through January 2009, when the funds collapsed.
4. The Hedge Funds were insolvent as early as 2000 through and including
January 2009, when the funds collapsed.
5. Traders’ raised funds from investors beginning as early as May 1999, paid
out Management Fees on purported profits yet did not have trading activity until July
2003.
6. Similar to the Hedge Funds, Traders also operated as a Ponzi scheme
misrepresenting purported profits to investors and using the monies of new
investments from existing investors or monies from new investors to meet the
redemption of existing investors, in furtherance of Nadel’s Ponzi scheme.
Yip Decl. ¶¶87-92, March 23, 2012. In her revisions to her declaration, Yip further stated that:
Pursuant to a review of bank statements, cancelled checks, wire information, deposit
slips, copies of checks, QuickBooks files, federal tax returns, Advent software
information, and investor files maintained by the Hedge Funds, the investors of the
Hedge Funds and Traders incurred losses in excess of $168 million.
Revision to Yip Decl. ¶12, Ex. B (schedule of gains and losses for each investor account), July 19,
2012.
3. Nadel’s criminal proceedings and admissions
Nadel’s admissions, his plea agreement, his testimony at his plea and sentencing hearings,
and his criminal judgment are persuasive evidence supporting the Receiver’s motion for partial
summary judgment for the reasons I stated in my Order of February 3 and reiterated in Part B.1.b of
this report. Nadel’s guilty plea is appropriate for summary judgment consideration either under Fed.
R. Evid 807 or as a declaration or deposition for purposes of Rule 56(c) and carries a heightened
standard of reliability and trustworthiness. See In re Slatkin, 525 F.3d 805, 812 (9th Cir. 2008)
(applying Rule 807’s residual hearsay exception due to proceeding’s reliability); Scholes v. Lehmann,
56 F.3d 750, 762 (7th Cir. 1995) (a defendant’s admissions in a guilty plea proceeding and in a plea
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agreement that is part of the guilty plea carry “veracity safeguards” exceeding a deposition). See
generally In re Rothstein, 2010 WL 5173796 (S.D. Fla. Dec. 14, 2010) (“[c]riminal plea agreements
are admissible to establish the existence of a Ponzi scheme and a wrongdoer’s fraudulent intent” and
“criminal convictions based on operating a Ponzi scheme establish fraudulent intent for the purposes
of the fraudulent transfer provisions”); LaBella v. Bains, 2012 WL 1976972 (S.D. Cal. May 31,
2012) (granting summary judgment for receiver against multiple defendants where court took
judicial notice of ponzi schemer’s guilty plea agreement and found that he operated a ponzi scheme
with actual intent to defraud creditors under UFTA); In re Madoff, 445 B.R. 206 (S.D. N.Y 2011)
quoting In re Slatkin, supra, 525 F3d at 814 (“A debtor’s admission, through guilty pleas and a plea
agreement admissible under the Federal Rules of Evidence, that he operated a Ponzi scheme with
the actual intent to defraud his creditors conclusively establishes the debtor’s fraudulent intent ... as
a matter of law”); Armstrong v. Collins, 2010 WL 1131158 (S.D. N.Y March 24, 2010 (finding
schemer who defrauded investors ran a ponzi scheme and that the entities involved were never
solvent based on schemer’s testimony, his guilty plea and expert opinion). See also In re McCarn’s
Allstate Finance, Inc., 326 B.R. 843, 851 (M.D. Fla. 2005) (“Even if the information or indictment
did not specifically label the fraud a ‘Ponzi scheme,’ if the allegations in the information establish
that the debtor ran a scheme whereby the debtor intended to defraud the debtor’s creditors, evidence
of a guilty verdict or plea agreement admitting the charges can establish the existence of a Ponzi
scheme.”).
When Nadel entered pleas of guilty to all the indictment’s counts, he acknowledged, under
oath, his understanding of the accusations and that a factual basis supported his pleas. See doc. 6015 at 10. Likewise, in his plea agreement, Nadel acknowledged that he was pleading guilty because
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he was in fact guilty (doc. 60-15). As the Receiver points out, during Nadel’s allocution, Nadel
explained:
Beginning in about 2002 and continuing to January 2009, I engaged in knowingly and
willfully fraudulent activity for the purpose of obtaining money from investors in the
funds and converting the investors; money to my own use. To do so, I fabricated
inflated rates of return from my trading activities and fabricated the net asset value
of each of the funds. Using these fabricated numbers, I repeatedly communicated to
investors and prospective investors that the funds had consistent and extremely
positive performances and rates of return and that the net asset value of each of the
funds was in the tens of millions of dollars. These communications were knowingly
and willfully made false and made for the purpose of inducing investors to invest and
keep their money in the funds.19
See Guilty Plea Transcript, doc. 60-15, at 30. Nadel further stated that he directed his broker to make
certain wire transfers among accounts that he controlled “for the purpose of facilitating and
concealing the scheme to defraud . . . .” Id. at 31.
At the sentencing hearing, Nadel spoke of his “victims” and clearly acknowledged his guilt:
I have had almost two years to think about the victims in my case. I have pictured
myself in their position while visualizing the faces and hearing the voices of those
I knew personally. Recently I read their letters over and over again, until their anger
and outrage became mine at myself. I experienced a steep dissent into regret and
remorse followed by sorrow and self-hatred, into a deep depression. It took great
effort to struggle out of it.
I spend most of my time in examination of my life not to excuse but to try to
understand my harmful past behavior. I blame no one but myself for my acts and
observe that I have been my own worst enemy. In effect, I have thrown away
everything I have lived for: Family, friends, social acceptance, and honor, a sense of
self-worth and accomplishment, all my possessions and, finally, freedom itself.
19

Although Nadel’s sworn statements are obvious evidence that he operated the hedge
funds as a ponzi scheme by the time of the applicable distributions here, Nadel’s temporal
recollection is self-serving and contradicted by the record in the criminal case. For example, the
sentencing-guideline loss calculation dated back to 1999, a fact that Nadel did not object to at his
sentencing proceeding. And at other times discussed infra, Nadel acknowledged he “doctor[ed]”
continuing losses for more than 10 years and that the hedge fund losses could be calculated by
going back to 1998.
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See Sentencing Transcript, doc. 60-18, pp.15:23-16:12. Nadel did not object to the restitution
amount, nor did he object to those victims identified in his presentence report and included in his
judgment. Similarly, when the court advised Nadel of the forfeiture calculation, $162 million, his
counsel represented that he had no objection. See Preliminary Order of Forfeiture (doc. 60-19), and
Sentencing Hearing Transcript (doc. 60-18). The court sentenced Nadel to 168 months of
imprisonment. See Judgment, doc. 60-17. Nadel’s plea agreement, his sworn admissions, his guilty
plea, his failure to object to the court’s restitution and forfeiture calculations (both premised on his
scheme spanning from 1999 to 2009), and court’s judgment support Yip’s findings.20
Nadel’s own statements further support the Receiver’s motion. In a January 2009 letter
found in a hedge fund office shredder by a Scoop Management employee (“Shredded Letter”), Nadel
admitted that “[f]or more than ten [years], I have truly believed that [I could] trade my way out of
this mess, and [only] in 2008 did it finally penetrate my addled [brain] that this is not to be. I have
managed to ruin hundreds of lives, and I deserve whatever [I] ultimately receive.” Nadel also sent
a letter to his family after he disappeared in January 2009 admitting that he had been attempting to
“‘doctor’ continuing losses for almost 10 years.” In the letter, Nadel suggested that the hedge funds
losses could be calculated by “go[ing] back as far as possible, to 1998 if we can, to Spear, Leads &
Kellogg from Goldman, Sachs, and determine the actual trading losses.” He stated that his
“recollection of the more recent losses, say from 2001 on, is about an average of $20 million per
year. ...” Nadel wrote a confidential memo that provided a background of himself and the hedge

20

As I noted in my Order of February 3, Nadel’s failure to object to probation officer’s
loss calculation in the presentence report admits its factual accuracy. See United States v. Wise,
891 F.2d 970, 972 (11th Cir. 1989). This restitution amount (almost $175 million) corresponded
with losses to victims from 1999 to 2009.
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funds, including the operation of the investment clubs before the formation of the hedge funds. In
the confidential memo, Nadel wrote:
All six [hedge funds] were traded together as a group usually ... [B]y 1999 the
volatile tech bubble created losses. When the bubble burst I began to “doctor” the
trading results. It started in a small way, but as the assets increased, it became more
difficult to cover the losses, and then came 9/11/2001, followed by the recession of
2002. All of this time, I believed that I could trade my way out of the discrepancies
between the stated assets and the actual assets.
See doc. 28-3, 28-4, 28-5.21
4. Meeker’s rebuttal
In response to this overwhelming evidence, Meeker offers little rebuttal evidence in
admissible form. See Celotex Corp., 477 U.S. at 324 (1986) (if the moving party makes the required
showing, the burden shifts to the non-moving party to rebut that showing by producing counterevidence in admissible form). See doc. 89. Initially, Meeker argues that the Receiver’s motion for
partial summary judgment makes a sweeping conclusion that a ponzi scheme is established while
Nadel’s plea and other statements actually disprove that he ran a ponzi scheme. According to
Meeker, that Nadel’s plea fails to articulate that he ran a ponzi scheme and that Nadel has not signed
an affidavit admitting to a ponzi scheme despite Nadel’s cooperation with the Receiver and his
attorneys to assist in recovering funds from receivership investors, shows that the elements of a ponzi
scheme must be lacking. This argument is unpersuasive, however, and I have already addressed that
the evidentiary record supports a finding that Nadel ran the hedge funds and Traders as a ponzi
scheme. See §C. Discussion, supra; In re McCarn’s, supra, 326 B.R. at 851 (“Even if the
information or indictment did not specifically label the fraud a ‘Ponzi scheme,’ if the allegations in
21

Given Nadel’s recent death, all these statements are admissible per Fed.R.Evid.
804(b)(3)(A) or 807.
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the information establish that the debtor ran a scheme whereby the debtor intended to defraud the
debtor’s creditors, evidence of a guilty verdict or plea agreement admitting the charges can establish
the existence of a Ponzi scheme.”). Meeker points out that although the Receiver asserts that the
ponzi scheme began in 1999, Nadel admitted to fraud beginning in 2002 during his plea and that
Nadel conducted legitimate business operation in which substantial profits were made, disproving
a ponzi scheme. Given that the relevant time frame in this case is January 2006 through September
2007, Meeker’s argument is self-defeating.
Undoubtedly, Nadel did trade. He also commingled funds, purposely misrepresented his
earnings and losses, and applied the influx of new investors’ moneys to pay off old investors and
further the scheme. The legitimacy of some trading activity does not wipe clean the overarching
illegitimacy of the scheme. The only evidence before me shows that Nadel operated the hedge funds
such that little or no legitimate business was conducted, the hedge funds produced little or no profits
or earnings, and the transfers to investors was from cash infused by new investors, thus satisfying
the elements needed to prove a ponzi scheme.
Meeker cites to Nadel’s statements about his belief that he could “trade his way out” and that
his fraud started in a small way with moderate profits made at first, attempting to show that at least
in the earlier years Nadel conducted some legitimate business. However, such statements are
inadmissible as they are not statements against interest and are not admissible under Fed.R.Evid.
804(b)(3). Macuba v. Deboer, 193 F.3d 1316, 1323 (11th Cir. 1999) (the general rule is that
inadmissible evidence cannot be considered for summary judgment purposes). See also Scholes, 56
F.3d at 762 (ponzi schemer’s backpedaling statements made in affidavit were appropriately rejected
for summary purposes as schemer should not be able to retract admissions made in plea agreement
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and guilty plea which bind a party and have greater veracity safeguards); Ciccarelli v. Gichner
Systems Group, Inc., 862 F.Supp. 1293 (M.D. Penn. 1994) citing Williamson v. United States, 512
U.S. 594 (1994) (for purposes of summary judgment motions, court would consider only those
portions of now deceased affiant’s statements that were against his interest and would not consider
collateral portions as they lack “same indicia of reliability” as portions covered by Rule 804(b)(3)).
More relevant are the sworn statements Nadel made in his criminal proceedings and his statements
against interest, and Nadel’s failure to object to the forfeiture and restitution calculations that were
based upon losses from 1999 forward, all of which support the conclusion that by 2006 he was
working a ponzi scheme.
Next Meeker contends Yip’s declaration is unreliable as she has “no expertise” in relation
to hedge funds, she fails to prove a ponzi scheme, and his expert (Harold McFarland) contradicts her
opinions. As for Yip, Meeker levels a host of complaints: she does not know the difference between
a legitimate operation of hedge funds versus a ponzi scheme operation; she improperly relied on
unverified findings of the third party analyst the Receiver retained; she unjustifiably excluded
pertinent evidence; and she incorrectly concluded that Nadel conducted “little or no legitimate
business operations” and earned “little or no profits,” although she acknowledged Nadel made trade
profits from 2002 to 2005. But as Yip reports, trading profits alone are not sufficient evidence to
reach a conclusion regarding whether or not the hedge funds operated as a ponzi scheme. Yip
explains that “[a]lthough the Hedge Funds had net trading profits during 2002-2005, the same Hedge
Funds paid out in excess of $36 million to its Fund Managers based on inflated trading profits and
fictitious net asset values.” See Yip Decl. ¶¶ 26-27, Oct. 11, 2012.
Meeker’s expert, McFarland, who is a certified CPA, does not alter the quantum of proof the
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Receiver puts forth (doc. 89-8). Indeed, the bases of his opinions are suspect.22 For example, he
admits that he conducted only a partial, incomplete analysis, had not reviewed certain relevant
documents, and did not consider whether Nadel had made any misrepresentations to the hedge fund
investors. See McFarland Dep. 72:19-73:17, 127:24-128:6 (docs. 92-2 and 92-3) (McFarland
testified that he “really had not done the analysis” to determine when he first saw traits of a ponzi
scheme because he had only analyzed the first three years of Traders and had not examined “the
other ones”). A number of clawback defendants have used McFarland, and his opinions have varied
and are sometimes contradictory. For instance, regarding Meeker, McFarland expresses “significant
doubt as to whether these hedge funds were in fact a Ponzi-scheme from the beginning or simply a
legitimate business enterprise that at some point became a Ponzi-scheme. While the Commission
found it to be a Ponzi-scheme from 2008, there is insufficient information to determine when
exactly, or if, it became a Ponzi-scheme before that.” See McFarland Rpt. ¶ A(10). This contrasts
with his declaration in Rowe where he opines “there is sufficient evidence to determine that these
entities compromised an elaborate Ponzi scheme some time during or after 2006 … [and] there are
some artifacts of a Ponzi scheme as early as 2003.” See McFarland Decl. ¶¶ C(1-2) (Wiand v. Rowe,
case no. 8:10-cv-245, doc. 70). He goes on in Rowe: “At best, the only thing that can be said with
complete confidence is that the evidence is conclusive that Nadel-Moody was insolvent and a Ponzi
scheme from 2006 forward and inconclusive prior to 2005, further it is unlikely that Nadel-Moody
was a Ponzi scheme prior to 2002.” McFarland Decl. ¶ C(4) (Wiand v. Rowe, case no. 8:10-cv-245,
doc. 70. But then he hedges: see McFarland Dep. 62:22-63:12 (Wiand v. Rowe, doc. 83-1) (“... the
early years, ‘99 and 2000, 2001, were definitely not a Ponzi scheme. So I don’t know when it was.
22

The Receiver has moved to strike McFarland’s opinions (doc. 99).
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I believe it was from 2006 forward. At this point it’s my opinion that it was not in ‘99, 2000, 2001.
It was some time after that. And the strongest evidence is pretty heavy at 2005, or so, it changed
[into a Ponzi scheme]. … By the end of 2006, I have no questions that it was a Ponzi scheme.”).
Further, some of McFarland’s criticism of certain aspects of Yip’s report are mistaken. For example,
he claimed that Yip incorrectly considered the period between 1999 through 2009 as one single unit.
But that premise is misplaced. Yip performed a detailed quarterly analysis for each year from 1999
through 2008, and attached no fewer than 62 exhibits demonstrating her thorough analysis of
financial statements. See Yip Decl. ¶¶ 59-60, 82, Ex. 6-61, March 23, 2012; Yip Decl. ¶¶ 25-31,
Oct. 11, 2012.
That Meeker proffers McFarland’s report does not mean summary judgment is automatically
inappropriate. Evers v. General Motors Corp., 770 F.2d 984, 986 (11th Cir. 1985) quoting Merit
Motors, Inc. v. Chrysler Corp. 569 F.2d 666, 672-73 (D.C. Cir. 1977) (“Rule 703 was intended to
broaden the acceptable bases of expert opinion, but it was not intended, as appellants seem to argue,
to make summary judgment impossible whenever a party has produced an expert to support its
position.”); see also American Key Corp. v. Cole Nat’l Corp., 762 F.2d 1569 (11th Cir. 1985)
(finding trial court properly awarded summary judgment for defendant and did not err in assigning
“little weight” to plaintiff’s expert’s affidavits because the affidavits did not create a material issue
of disputed fact); Mid-State Fertilizer Co. v. Exchange Nat’l Bank, 877 F.2d 1333, 1339 (7th Cir.
1999) (Expert opinions can defeat summary judgment only if they show “a process of reasoning
beginning from a firm foundation.”). In the end, the operative guides are Rule 56(a), (c), and (e),
and against these standards, the record overwhelming supports the Receiver’s position that Nadel

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operated the hedge funds as a ponzi scheme by 2006, when Meeker received his first distribution.23
Meeker raises other reasons against summary judgment. He claims, for instance, that the
Receiver has failed to prove that the transfers were Nadel’s property, a requisite element of FUFTA.
According to Meeker, the Receiver has failed to prove that Nadel and the receivership entities are
alter egos, or that Nadel exclusively created, managed and controlled the receivership entities. The
Eleventh Circuit has indicated a willingness to allow a receiver to pursue FUFTA claims under
substantially similar facts and at least implicitly recognized that “in a receivership proceeding, there
need not be an artificial distinction between the property of a Ponzi scheme perpetrator and the
property of his alter ego corporations used to perpetrate the scheme.” In re Burton Wiand
Receivership Cases Pending in the Middle Dist. of Fla., case no. 8:05-cv-1856-T-27MSS, 2008 WL
818504, *2 (M.D. Fla. Mach 26, 2008) citing S.E.C. v. Elliott, 953 F.2d 1560 (11th Cir. 1992).
Meeker next argues that there is a dispute of material fact as to whether the transfers were
property of the debtor under FUFTA. An “asset” is defined as “property of the debtor” Fla. Stat. §
726.102(2). The evidence before me clearly demonstrates that the funds transferred to investors as
part of Nadel’s scheme, including those funds transferred to Meeker, constitute “property of” Nadel
under FUFTA because they are available to pay the debt owed by Nadel to each of the hedge funds
arising from Nadel’s operation of a ponzi scheme. Meeker relies on a note purportedly written by
Nadel to Colleen Cassidy (doc. 121-1), but the statements Meeker seeks to introduce in the Cassidy
note are not statements against interest and are not admissible under Fed.R.Evid. 804(b)(3).
Macuba, supra 193 F.3d at 1323 (the general rule is that inadmissible evidence cannot be considered
23

Because I find that Nadel, through the hedge funds, operated a ponzi scheme, it is
unnecessary to address Meeker’s assertion that Nadel’s statements do not prove a blanket
FUFTA violation.
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for summary judgment purposes).
And, Meeker asserts that the Receiver has failed to introduce evidence concerning the
illegitimate purpose for forming the receivership entities. However, consistent with FUFTA, the
Receiver sues on behalf of each of the hedge funds, including Viking, under the premise that Viking
and the rest of the hedge funds have claims against Nadel because he operated them as a fraudulent
scheme. Hence, each of the hedge funds has claims against and is thus a creditor of Nadel, and the
Receiver explicitly identified the receivership entities as creditors, the wrongdoer, Nadel, as the
debtor, and the creditor’s claims against the debtor arising from the ponzi scheme perpetrated by
Nadel, through the receivership entities. Courts have consistently recognized that when a ponzi
scheme’s perpetrator diverts money that investors intended to invest with a receivership entity, the
entity is harmed, even if the entity is controlled by the scheme’s perpetrator and used exclusively to
perpetrate the scheme.24 For example, in Scholes, supra, 56 F.3d at 754, the court noted that “the
appointment of the receiver removed the wrongdoer from the scene” such that the receivership
24

See generally Knauer v. Jonathon Robert Fin. Group, 348 F.3d 230, 235 (7th Cir.
2003) (“As long as an entity is legally distinct from the person who diverted funds from the
entity, a receiver for the entity has standing to recover the removed funds.”); Goldberg v. Chong,
2007 WL 2028792, *4 (S.D. Fla. July 11, 2007) (“TEGFI [a receivership entity], as a creditor
alleging a claim against a debtor, has standing to bring a FUFTA claim against Defendants
[recipients of receivership entity money or proceeds]. The Receiver, having been so authorized
by the Court, has standing to assert claims on TEGFI’s behalf”); Quilling v. Grand St. Trust,
2005 WL 1983879, *5 (W.D.N.C. Aug. 12, 2005) (finding receiver had standing to assert
fraudulent transfer claims on behalf of corporate entities owned or controlled by ponzi scheme
operator from whom assets were fraudulently transferred); Marwil v. Farah, 2003 WL 23095657,
*7 (S.D. Ind. Dec. 11, 2003) (quoting Scholes and finding receiver, as representative of
receivership entity, had standing to bring equitable disgorgement claim arising from fraud on
receivership entity that Church operated to receivership entity’s damage); Obermaier v. Arnett,
2002 WL 31654535, *3 (M.D. Fla. Nov. 20, 2002) (holding receiver could assert fraudulent
transfer and unjust enrichment claims against beneficiaries of alleged ponzi scheme to redress
injuries to receivership entities).
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entities were no longer the ponzi scheme principal’s “evil zombies.” Freed from the principal’s
“spell” the entities “became entitled to the return of the moneys– for the benefit not of [the
principal] but of innocent investors – that [the principal] had made the [entities] divert to
unauthorized purposes.” In finding that the receiver had standing to bring fraudulent transfer claims,
the Scholes court stated:
Now that the corporations created and initially controlled by [the Ponzi scheme
principal] are controlled by a receiver whose only object is to maximize the value of
the corporations for the benefit of their investors and any creditors, we cannot see an
objection to the receiver’s bringing suit to recover corporate assets unlawfully
dissipated by [the principal].
Scholes, at 755 (finding receiver Scholes had standing to bring fraudulent conveyance action against
investors). And, courts have consistently allowed receivers to file similar FUFTA “clawback” causes
of action. See generally Dillon v. Axxsys, Int’l, Inc., 185 Fed. Appx. 823, 830 (11th Cir. 2006)
(finding that once the principals decided to use the plaintiffs’ money for non-business purposes, i.e.
transferring assets to their own account, the plaintiffs became creditors and possessed a viable claim
according to FUFTA.); Warfield v. Byron, 436 F.3d 551, 554-55 (5th Cir. 2006) (allowing receiver
to bring UFTA claims against individuals and entities to recover receivership assets where ponzi
scheme operator caused receivership entities to effect transfers); Troelstrup v. Index Futures Group,
Inc., 130 F.3d 1274, 1277 (7th Cir. 1997) citing Scholes, supra, 56 F.3d at 753-54 (recognizing that
“receiver, who had also been appointed the corporations’ receiver, had standing to sue on behalf of
the corporations, because they were entitled to the return of the money that the defrauder had
improperly diverted from them”); In re Burton Wiand Receivership Cases Pending in the Tampa
Div. of the Middle Dist. of Fla., 2008 WL 818504, *4 (M.D. Fla. March 26, 2008) (“Waxenberg II”)
(denying motion to dismiss receiver’s amended FUFTA claims against debtors because debtor’s
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transfer of receivership entities’ assets constituted transfer of “property of the debtor”); Warfield v.
Carnie, 2007 WL 1112591, *9 (N.D. Tex. 2007) (“A receiver of an alleged Ponzi scheme may sue
under the UFTA to recover funds paid from the entity in a receivership”); Quilling v. Cristell, 2006
WL 316981, *6 (W.D. N.C. 2006) (finding “once Receiver was appointed, the [ponzi scheme
entities] were freed from control of [the ponzi scheme operator] and the [entities] became entitled
to the return of the funds that were wrongfully diverted to the Defendants ... “Receiver, as receiver
for all entities owned or controlled by [ponzi scheme operator] including the [ponzi scheme entities]
properly has standing to bring fraudulent transfer claims that he is asserting against Defendants.”).
Here, the Receiver has submitted evidentiary proof, discussed supra, that Nadel operated a
fraudulent scheme by the time Meeker received his first distribution in 2006. The summary
judgment record shows: (1) Nadel controlled each of the hedge funds; (2) that Nadel used that
control to commingle invested money, misrepresent hedge fund performance, and inflate hedge fund
asset values; (3) Nadel caused the hedge funds to transfer investors’ commingled principle
investment money to satisfy “distributions” based on the hedge funds’ fabricated performance data
and asset values; and (4) that as a result of this conduct, Nadel was indicted and pleaded guilty to
all charges in the indictment, discussed supra, failed to object to the government’s restitution and
forfeiture calculations which were based upon his scheme spanning from 1999 through 2009, and
made statements, discussed supra, admitting his criminal activity.25 Meeker fails to alter the
25

See Wiand Decl. (doc. 60) setting forth evidence that Nadel controlled Viking Fund,
LLC and the other hedge funds. In pertinent part, the declaration and the attached evidentiary
documents show that Nadel incorporated Scoop Management in 2001 and served as its registered
agent and sole officer and director (¶11, Ex.C); that Viking was formed in 2001, purportedly to
invest in and/or trade securities including exchange traded funds (ETFs), that the managing
member of Viking was Viking Management, that Viking Fund and Viking Management retained
retained Nadel and his entity, Scoop Management, as their “Investment Consultant,” and that
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overwhelming quantum of evidence the Receiver presents.
5. affirmative defense
Fla. Stat. §726.109(1) provides a “good faith” defense for transfers made with actual fraud
under Fla. Stat. §726.105(1)(a): “A transfer or obligation is not voidable under s. 726.105(1)(a)
against a person who took in good faith and for a reasonably equivalent value or against any
subsequent transferee or obligee.” In its answer, Meeker raised this defense. Specifically,
affirmative defense two asserts Meeker was a good faith transferee without knowledge of any indicia
of fraud who provided reasonably equivalent value for any amounts received. See doc. 21, second
affirmative defense. However, as the Receiver indicates, it is well-settled that a receiver is entitled
to recover from winning investors profits above the initial outlay, also known as "false profits," and
an investor in a scheme does not provide reasonably equivalent value for any amounts received from
scheme that exceed the investor’s principal investment. See Perkins v. Haines, 661 F.3d 623, 627
(11th Cir. 2011) (“Any transfers over and above the amount of principal– i.e. for fictitious profits
– are not made for ‘value’ because they exceed the scope of the investor’s fraud claim and may be
subject to recovery.”); Donell, supra, 533 F.3d at 772 (amounts transferred by the ponzi scheme
perpetrator to the investor in excess of amounts invested are considered fictitious profits because
they do not represent a return on legitimate investment activity); Scholes, 56 F.3d at 757.
6. false profits/ set-off
Meeker does not dispute he invested in the hedge funds and received transfers from the hedge
funds in connection with his investments. See Morello Decl., ¶5; Meeker’s responses to Receiver’s

Scoop Management provided “office management and technical services” to Viking
Management (¶13, Ex.E); that even thought Nadel did not own Viking Fund, he was allowed to
“fully control” its activities as its “investment advisor” (¶¶19-20, Ex. B-I).
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First Set of Requests for Admissions, docs. 92-4, 92-5. Evaluating these transfers, the Receiver
seeks $645,641.67 in false profits plus prejudgment interest, an amount that corresponds to the
Receiver’s accounting in Exhibit A attached to the complaint.
Although Meeker admits the Receiver’s accounting, he contends, citing to the Receiver’s
Plan in the enforcement action, this amount should be set-off by the losses he and his wife, Barbara
Meeker, suffered in their other hedge fund accounts, namely his IRA and her account. According
to the Plan, Meeker says all three Meeker accounts, the one at issue in this action, his IRA account,
and his wife’s account (together the “Meeker accounts”), should be considered together. See case
no. 8:09-cv-87-T-26TBM (docs. 675 (Receiver’s Plan); 776 (Order granting Plan)). Indeed, the
Receiver’s Plan provides that “where Claimants have multiple Investor Accounts and one or more
of those accounts received False Profits, the accounts are considered on a consolidated basis.” Id.
Meeker complains that the Receiver has failed to abide by the plan requirements as his gains are setoff by his losses in accounts held by his wife and his IRA. Specifically, he asserts
The Receiver inexplicably excepts Mr. and Mrs. Meeker (the “Meekers”) from his
own court-approved method of setting-off an investor’s gains from one account with
losses in another account, thereby double-victimizing the Meekers in seeking over
half-a-million dollars from the Meekers when they have already suffered net losses
far exceeding those alleged false profits.
doc. 120, p.9. Meeker explains that the Meeker account upon which this case is based allegedly
made a net gain of $645,641.67 that should be set-off by the $736,875.23 in losses suffered by the
Meeker IRA account (loss of $561,875.23) and Mrs. Meeker account (loss of $175,000). Per
Meeker, the account summaries for the IRA and Mrs. Meeker accounts show that he had authority
to request distributions from the accounts. See doc. 120, Ex. D-1 through D-7, Ex. E. Moreover,
Meeker asserts that the Meeker IRA and Mrs. Meeker’s accounts should be consolidated because
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under Florida law they are shared collectively as “marital assets and liabilities.” See Fla. Stat.
§61.075(6)(a)1.a (defining marital property as “[a]ssets acquired and liabilities incurred during the
marriage, individually by either or jointly by them”).
Set-off is an equitable concept, see Durham Tropical Land Corp. v. Sun Garden Sales Co.,
151 So. 327, 328 (Fla. 1932). Florida recognizes that to avail oneself of set-off in equity, the
defendant must show an existing debt or demand against the complainant in favor of the defendant,
and that the debt arose and existed under circumstances where disallowing it would be inequitable.
Id. “The very essence and basis for set-off is mutuality of claims; that is to say claims existing
between the same parties and in the same right.” Everglade Cypress Co. v. Tunnicliffe, 148 So. 192,
193 (Fla. 1933).
I find Meeker’s set-off argument has merit. Meeker’s accounting regarding the losses he and
his wife suffered does not seem in dispute. But given that Meeker raised this issue in his response
(doc. 120), and that it is almost akin to a summary judgment motion, the Receiver should be allowed
to submit a reply and show cause why a set-off is inappropriate given the Plan’s directives.26
7. prejudgment interest
This Court exercises supplemental jurisdiction over the Receiver’s FUFTA claims (doc. 1,
¶8). See 28 U.S.C. § 1367. As such, state law applies to any issue not governed by the Constitution
or treaties of the United States or Acts of Congress. 28 U.S.C. § 1652; Erie R. v. Tompkins, 304 U.S.

26

Local Rule 3.01(c) prohibited the Receiver from issuing a reply without first obtaining
leave of court. And even if Meeker’s response were not tantamount to a summary judgment
motion, the Court could not grant summary judgment sua sponte without first giving notice to the
parties that the Court intended to address the matter. Moton v. Cowart, 631 F.3d 1337, 1343
(11th Cir. 2011).
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64, 78 (1938); Flava Works, Inc. v. City of Miami, FL, 609 F.3d 1233, 1237 (11th Cir. 2010); see
also Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4520. Florida
courts have long held the view that prejudgment interest is simply another element of pecuniary
damages for making the plaintiff whole from the date of the wrongful loss. Bosem v. Musa
Holdings, Inc., 46 So.2d 42, 45 (Fla. 2010) (reaffirming Florida’s position since the turn of the last
century). An award, however, is grounded in equity and is not absolute. Blasland, Bouck & Lee, Inc.
v. City of North Miami, 283 F.3d 1286, 1297-98 (11th Cir. 2002) (applying Florida law). Florida
courts consider various factors when evaluating the equities. These include the extent the plaintiff’s
conduct contributed to the delay between the injury and judgment, and whether the prevailing party
failed to mitigate damages; in matters involving public bodies, and in choosing between innocent
victims, it is inequitable to put the burden of paying interest on the public. Id. The list is obviously
illustrative as each case is different. But the driving focus demands balancing the equities at hand.
As the Florida supreme court has said: “interest is not recovered according to a rigid theory of
compensation for money withheld, but is given in response to considerations of fairness. It is denied
when its exaction would be inequitable.” Flack v. Graham, 461 So.2d 82, 84 (Fla. 1984) quoting
Board of Commissioners of Jackson County v. United States, 308 U.S. 343, 352 (1939).
In view of these principles, I conclude that to exact prejudgment interest from Meeker would
be inequitable. Despite its position as a “net winner,” compared to the greater number of “net
losers” Nadel swindled, Meeker is certainly not a winning investor in the normal sense. Like the net
losers, Meeker invested in the hedge funds assuming their legitimacy. That he received a return in
excess of his investments was likely serendipitous. With the avoidance of those positive transfers
(the amounts above principal invested), requiring Meeker to pay more out of his pocket in the form
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of prejudgment interest would not satisfy the goals for making the award. It would not make the
hedge funds any more whole, as Meeker presumably could stand in line with the other net losers
seeking compensation from the Receiver. Simply put, Meeker has suffered enough.
8. Meeker’s partial summary judgment motion
Meeker filed a motion for partial summary judgment seeking entry of an order finding certain
of the Receiver’s constructive fraud FUFTA claims barred by the statute of limitations (doc. 93).
In light of my finding here that the transfers to Meeker are avoidable under the actual fraud cause
of action spelled out in Fla. Stat. §726.105(1)(a), I need not determine whether any of the transfer
were constructively fraudulent.

And, I need not determine whether any of the Receiver’s

constructive fraud claims are barred by the statute of limitations. Meeker concedes that the second
set of claims the motion (filed in this and several related clawback actions) seeks to bar by
application of the statute of limitation, transfers from Traders Investment Club, are not at issue in
this particular case. See doc. 93, n.3. For these reasons, I find the motion should be denied as moot.
D. Conclusion
As one court recently noted:
Ponzi schemes leave no true winners once the scheme collapses. In recognition of
that unpleasant reality, courts adhere to the ‘principle that equality is equity’ in
dealing with the aftermath of an imploded Ponzi scheme.
Janvey v. Democratic Senatorial Campaign Comm., Inc. et al., 793 F.Supp. 2d 825, 858 (N.D. Texas
2011) citing Donell, supra, 533 F.3d at 779. Upon consideration of the evidence before me, I find
that Nadel operated the hedge funds as a ponzi scheme at the time of the transfers to Meeker, and
that the transfers to Meeker were made with the actual intent to hinder, delay, or defraud as required
by Fla. Stat. § 726.105(1)(a). For the reasons given, it is hereby
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RECOMMENDED:
1. That the Receiver’s motion for summary judgment (doc. 90) be GRANTED to the extent
that Nadel operated the hedge funds as a ponzi scheme at the time of the transfers to Meeker, and
that the transfers to Meeker were made with the actual intent to hinder, delay, or defraud as required
by Fla. Stat. § 726.105(1)(a). Though I find the transfers to Meeker avoidable under FUFTA, and
that there are $645,641.67 in false profits, the Receiver should be given 14 days to show cause why
that amount should not be offset by the $736,875.23 in losses Meeker and his wife suffered in their
other hedge fund accounts.
2. That the Receiver's renewed motion for partial summary judgment (doc. 59) be found
moot.
3. That the Receiver’s motion to strike report of Defendants’ designated expert, Harold
McFarland, and to Preclude His Testimony at Trial (doc. 99) be DENIED.
4. That Meeker’s motion for summary judgment relating to statute of limitations (doc. 93)
be DENIED.
IT IS SO REPORTED at Tampa, Florida on December 13, 2012.

NOTICE TO PARTIES
Failure to file written objections to the proposed findings and recommendations contained
in this report within fourteen (14) days from the date of its service shall bar an aggrieved party from
attacking the factual findings on appeal. 28 U.S.C. § 636(b)(1).
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cc:

Hon. Elizabeth A. Kovachevich
Counsel of Record

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