Securities and Exchange Commission v. Nadel et al

Filing 745

RESPONSE re #733 Order filed by Wells Fargo Bank, N.A., as successor by merger to Wachovia Bank, N.A.. (Attachments: #1 Exhibit, #2 Exhibit, #3 Exhibit, #4 Exhibit, #5 Exhibit)(Barnett, Ana)

EXHIBIT D

U.S. D-gpartme_nt of Justice

United States Attorney
Southern Dístríct of New York
United States Districl Courthouse
300 Qunopas Street
lí¡hite Plains, New York 10601

May 23,2011

Via Federal Express
Ana T. Barnett
Steams Weaver

Miller Weissler

Alhadeff & Sitterson, P.A.
150 V/est Flagler Street, Ste. 2200
Miami, FL 33130
Re: United States v. Ärthur G. Nadel
09 Cr. 433 (JGK)

Dear Ms. Barnett:
Enclosed is a copy of the Preliminary Order of ForfeiturelFinal Order of Forfeiture as to Defendant's
Interest in Specific Property, entered by the Court on December 2,2010 in the above-referenced case. Shsuld you wish.

to asserf a'legal interest in the proper(y whi'ch has been ordered forfeited to the United States,

a

petition for

a hearing

to

adjudicate the validity of your alleged interest in the propertf must be filed within thirty-five days of the date of this
Ietter.

Pursuantto 21 U.S.C. $ 853(n)(3.)"sueh a-pet-ition shall be signed by the petitioner under penalty

of

perjury and shall set forth the nature and extent of the petitioner's right, title, or interest in the property, the time and
circumst¿nces of the petitioner's acquisition of the right, title, or interest in the properly, any additional facts supporting
the claim, and the relief sought.
Respectfully,

PREETBII.ARATìA
United States Attorney
Southern District of New York

Assistant United States Attorney
Tel. (9la) 993-196s
Enclosure

Case 1 :09-cr-00433-JGK

1of

7

DOCUIvIL^r ¡
TINITED STATES DTSTRICT COUR
SOTTTHERN

DTSTRICT OF

ELECTRONICALLY FILED

NEV{

UNITED STATES OF AI"ÍERICA,

PRELIMINARY ORDER

OF FORFEITURE/FINÃ],
OF FORFEITURE AS TO

-v- -

DEFENÐÀI\IT'S TNTEREST IN
SPECTFIC PROPERTY

ÀRTHUR NAÐEIJ,

Defendant.

WHEREAS,

ORDER

09 Cr. 433 (JcK)

on or about April 28, 2OO9,

ARTHUR

NADEL, (ttre

"defendanÈ"), was charged in a fifteen-count fndictment 09 Cr.
433 (.lGK) (the "Indictrnent"), with, securities fraud, in

violation of Titlê. 1-5, UniEed Stat.es Code, Sections 7gj (b) &
7ïff , TitIe J-7. Code of Federal Regulat,ions, Section 24O.LOb-S,
and Titre 18, united states code. sectíon 2 (counts one through
Sir); maiL fraud in viol-ation of Title tB, United StaÈes Cod.e,
sections 1341 and 2 (count seven); and wire fraud ir-r violation of
Tit]e 18, United- States Code, Sections 1343 and 2 (Counts Eight
through Fifteen) ;
the Indictment íncludes forfeiture
aÌlegations, providing notÍce that the covernment is seeking,
pursuant to Title l-8, UniLed St-ãEes Code, Section 9Bl_(a) (1) (C)
and Title 28, United States Code, SecÈion 246L, aII property,
rear and personar, thaL constitutes or is derived from proceeds
eraceab].e to e}.e commission of Erre fraud offenses, including, but
noL J.imited to, the following:
WHEREAS,

Case 1:09-cr-00433-JGK Document

a.

78

Filed 121O2110 page 2 of T

A sum of money equal to $162,000,000 in United States
currer¡cy, representing Lhe amounL of proceeds obtained
as a resurt of the fraud offenses arleged in

coirnE,s one

through Fifteen of the fndictment;
b.

all funds on deposít in Accounts No. 2940109315
held in t,he name of Marguerite ,J. Nadel_ Revocable Trust
Any and

aE Northern Trust., N.A. i

c.

d.

real property and appurtenances known and described
as 15576 Fruitville Road, Sarasot.a, Florida;
The real property and appurtenar¡ces known and. d.escribed.
The

1 Garren Creek Road, Fairview, North Carolina,.
The real property and appurtenances known and described
l-3

as approximately acres and forty-five lots in the

of

name

Capital, LLC, in Thomasville, Georgía;
The real property and appurE.enances known a¡rd.-d.escribed
Scoop

as approximately-trhirty-seven acres in Ehe name of

, LLc, in Grady County, Georgia,All right, -title, and j¡rterest in Èhe entity known and.
described as the VenÍce ,Jet Center located in Venice,
Florida;
All right., tit1e, and int.erest in Èhe entities known
Scoop Capital

E'

h.

and described as LaureL Mountain preserve/ LLC, Laurel

Preserve, LLc, and Laurel Mountain preserve Homeownerg
Assocíat,ion, fnc-, including, but. not lirniE,ed to, 42o

Case 1:09-cr-00433-JGK Document 78 Filed 1Z02l1O page 3 of 7
È

acres in

Buncombe County and McDowe1l County, North

Carolina;

i.

Al1 right, title,

and inÈerest in the entity known and

described as Tradewind, LLc, including, but not l-imited

to, five airplanes, one helicopter, and thirty-one
airporÈ hangars, locat.ed in Newnan-Coweta County
Airport, Georgia; and
All right, tit1e, and interest in the entity known and

j.

described as the Guy-Nade1 Foundation, Inc.;
I{HEREAS,

on or about February 24, 2OLO, the defendant

pled guilty to counts one through Fifteen of the rndictment
pursuant to a plea agrreement with Èhe Government (.'the
Agreement" ) ;
WHEREAS,

forfeiL to

in the

Agireement,

the defendant agreed, to

a sum of money equal to -$162,000,000 ín
United States Currency (the ..Money Judgnnent,,), and atI of his
right, title and interest in the following properties:
(a) Any and arr funds on deposit in Accour¡t No. 2g40109316
held i-n the name of Marguerite .T. Nadel Revocabl-e Trust
at Northern TrusÈ, N.A.;
(b) The real property and appurtenances known and. d.escribed.
as 15576 Fruitville Road, Sarasota, Florida;
(c) The real property and appurtenances known and descríbed
as 131- Garren Creek Road, Fairview, North Carolina,.
(d) Trre real properËy and appurtenances known and described
as approximately fourteen acres and forty-five rots in
the na¡ne of Scoop Capital, LLC, in ThomaãvíLle,
t.he-Government

Georgia,.

Case 1:09-cr-00433-JGK Document

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Filed 1ZlO2l1O page 4 of T

(e) The real property and appurtenances known and d,escribed
as approximat.ely thirty-seven acres in the name of
Scoop Capital, LLC, in Grady County, Georgia;
(f) Ar1 rÍght, titre, and interest in the entity known and.
described as the venice Jet center located ín venice,
Florida;
(g) AIl righÈ, titrle, and int.erest in Ehe ent,iÈies known
and descrÍbed as Laurel_ Mountain preserve, LLC, Laurel
Preserve, LLe, ar¡d rJaurel Mountain preserve Homeowners
.A.ssociation, Inc., including, buÈ not Iímited to, 42O
acres in Buncombe County and McDowell County, North
Carolina:,

(h) All right, titre, and interest in the entity known and.
described as Tradewind, Lf,C, including, but noÈ limited
to, fíve airplanes, one helicopt,er, and thirty-one
airport hangars, located in Newnan-Coweta CounÈy
Airport, Georgia; and
(i) AIl rightr, title, and. interesL in Ehe entity known and
described as the Guy-Nadel Foundation, Inc_
(hereinafLer the "specific Properties,, ) ;
on or al-'out October 14,

, the def endanÈ
was sentenced and ordered Eo forfeit his interest in the speci fic
Properties a¡rd to the Morrey .fudgment;
IIIHEREAS, pursuar¡t to 21 U.S.C. S 853 (g), the United
states is now entitled, pendi-ng any aEsertion--of third-party
claims, to reduce the specific properties to it.s possession and
WHEREAS,

ZOLO

to'not.ify any and all poÈential purctrasers and transferees
tshereof of it,s interest, Eherein;

Case 1:09-cr-00433-JGK Document

NOW,. THEREFORE,

1.

IT IS

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Filed 12t02110 page S of 7

ORDERED, AD,JUDGEÐ A}ID DECREED THAT:

As a result of the offenses charged in Counts

One

through fifEeen of the rndictment, to which the d.efendant
entered a gruilty p1ea, a Money .Tudgment Ín the amount of

shaIl bé entered againsE the defendant, as such sum
represenfs property, real and personar, derived from Ehe offense
sJ-62,000,000

charged in CounËs One through Fifteen of the Indictment..

2. All of Ehe defendant,s right, title and interest
in the specific Properties is forfeited to the united. staÈes for
disposition in accordance with Ehe law, subject to the provisions
of 2L u.s.C. S 853(n).
3. Upon entry of this preliminary Order of
Forfeiture, the United SEates Marshals Service (or its designee)
is authorized to seize the specifíc properLies and-hold the
Specific Propertj-es in Íts secure, cus.tody and. control .
4. pursuant, to 2L U. s. c. s 853 (n) (1) , Rule 3 2.2 (b) (6)
of the Federal Rules of CrÍminal proced.ure, and. Rules
G(4) (a) (iv) (c) and G(5) (a) (ii) of the supplemental Rutes for.
certain Admiralty or Maritime craims and Asset. Forfeiture
Actions, the united states shall pubrish for at Least thirty (30)
consecutive days on the official government internet forfeiture
site, www-forfeiture-9ov, nolice of this preliminary order of
Forfe:lÈure, Any persor¡, otÏ¡er than the defendant in thís case,
claiming an interest ín the speciflc properties must file a

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Fited 12lOZl1O page 6 of 7

petit.ion wiÈhín sixty (eO¡ days from Lhe first day of publication
of the notice on t.his official government internet site, or no
later than thirty-five (35) days from the mailing of actual
notice, whichever is earlier.

5.

This notice shalr state thaL Èhe petition shar] be
for a hearing to adjudicatre the validiEy of the pet.itioner, s
alleged interest .in one or more of the specific properties, shal_lbe signed by the petitioner und.er penalty of perjury, and sharl

forth the nature and extent of the petitioner, s righL, titre
and inÈerest in the specific eropert.ies and any additional- facts
supporting the petitioner's claim and the rerief sought, pursuant
to 21 U.s.C. S 853 (n)
seÈ

.

6. Pursuant to Rule 32.2(b) (6) of the Federal Rules
of críminal Procedure, the Government. shall send noti.ce to any
person who reasonabry appears to be a potential cLaimant with

standing Èo contest the forfeiture in the ancillary proceedÍng.

7. Upon adjudication of all third-party interests,
this court wilr enter a Final order of For.feiture with respect to
the Specific ProperÈies pursuant to 21 U.S.C. e53 (n) and Rule
32.2(c) (2) of the Federal RuLes of criminal procedure, in which
all- third-party int.erests will be addressed.
I _ The Court shal1 retain jurisdicÈion to enforce
this order, and Eo amend it as necesisar)¡, pursuant to Fed. R.
Crim. P- 32.2(e).

Case 1 :09-cr-00433-JGK Document

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Fited 12102t10 Page T ot 7

Pursuant to RuIe 32.2(b) (3) of the Federal Ru1es

of criminar Procedure, upon entry of this preriminary order of
Forfeíture, che united states Attorney's office is authorized. to
conducE any discovery needed to identify, locate or dispose of
forfeitable property, including depositions, interrogatories,
requesEs for production of documents and Ehe issuance of
subpoenas, pursuant to Rule 45 of the Federal Rules of Civil
Procedure.

10. The Clerk of the Court shall forward three
certified copies of this order to Assistant U.S. Attorney Sharon
Levín, One St. Andrew's P1aza, New York, New york, 10002.
Dated: New York, New York
october )l , 2ol-o

'JOHN

G.

KOELTL

ÐISTRICT

iTUDGE

Case 1:09-cr-00433-JGK Document 91

Filed 07102111 Page 1 of 4

TINITED STATES DISTRICT COURT

:_:üi:-::i::3-LÌ::.::.Y.
UNITED STATES OF AMERICA
VERIFIED PETITION FOR A
HEARING TO ADruDICATE
THE INTEREST OF WELLS
FARGO BANK

-v.-

ARTHURNADEL,

No. 09 CR 433 (JGK)

Defendant.

VERIFIED PETITION FOR A HEARING
TO ADJUDICATE THE INTEREST OF \ilELLS F'ARGO BANK
Third Parly Petitioner WELLS FARGO BANK, N.4., ("Wells Fargo")I, as successor by
merger to Wachovia Bank, N.4., hereby petitions the Court for an ancillary hearing pursuant to

21 U.S.C. $ 853(nX2), and Fed. R. Crim. P. 32.2(c) to adjudicate its interest in real property
identified in the Preliminary Order of Forfeiture (DE 78) as Laurel Mountain Preserve, located
in Buncombe and McDowell Counties, North Carolina2, and states:

FACTS SUPPORTING PETITION

L

Wells Fargo owns and holds a duly perfected3 priority interest in the Laurel

Mountain real property. Its interest arises from a Deed of Trust and Assignment of Rents ("Deed

of Trust") given to
Preserve,

secure

a Promissory Note ('Note") evidencing a loan made to Laurel

LLC in the amount of One million, nine hundred thousand dollars ($1,900,000.00) on

I The bank charters of Vy'achovia Bank, N.A.
and Wells Fargo Ban! N.A. were combined u¡rder the Wells Fargo
Bank charter.
t The Laurel Mountain Preserve real property is only referred to in the Preliminary

Order of Forfeiture as "420
acres in Buncombe County and McDowell County, North Carolina. These 420 acres are more precisely desctibed in
Exhibit A.

3 'lhe Deed of Trust and Assignment
of Rents dated May 2,2008 was recorded on May 6,2008 in Official Records
Book 4560 atPage 779, of the Public Records of Buncombe County, N.C. and also recorded on Ma¡ 9 2009 tn
Official Records Book 961 at Page 854, of the Public Records of McDowell County, N.C.

Case 1:09-cr-00433-JGK Document

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Filed 07102111 page 2 of 4

May, 2,2008. True copies of the Promissory Note and Deed of Trust are attached hereto and
incorporated herein as Exhibits B and C, respectively.

2'

The Deed of Trust on the Laurel Preserve real property was given to secure the

$1.9 million loan to Laurel Preserve, LLC, ata time when Wells Fargo Bank was reasonably

without cause to believe that the property was subject to forfeiture. This makes IJVells Fargo
Bank a bone fide purchaser for value of the right, title and interest in the Laurel Preserve real
property.

3.

As of this date, there remains an outstanding principal balance of $1,900,000.00

due and owing to V/ells Fargo under the Promissory Note, exclusive of interest, fees and costs.

4.

The payment of principal and interest due on February 2,2009 and thereafter has

not been made. Accordingly, under the terms and requirements of, the Note and Deed of Trust,

Wells Fargo is entitled to look to its secured interest in the Laurel Mountain Preserve real
property for repayment.

MEMORANDUM OF LAW
To prevail on its claim to the Laurel Mountain Preserve real property, Wells Fargo need

only establish by a preponderance of the evidence that is a bona Jide purchaser for value of its
interest in the property, and at the time it acquired its interest it was reasonably without cause to

believe that the property was subject to forfeiture under the forfeiture

law. See, 21 U.S.C. $

8s3(n)(6).

Wells Fargo loaned Laurel Preserve, LLC $1.9 million on May
consideration

2,

2008, and in

it obtained a Deed of Trust in its favor to ensure repayment. At the time of the

loan, in 2008, V/ells Fargo could not have reasonably suspected, much less "believed" that the
property migbt be subject to forfeiture. Arthur Nadel's criminal activity did not become known

Case 1:09-cr-00433-JGK Document

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Filed07l02l11 Page 3 of 4

to Wells Fargo (or anyone outside the govemmenQ until January, 2009, when Nadel
arrested

-

was

nearly one year after Wells Fargo obtained and perfected its interest in the Laurel

Mountain Preserve real propefy.

RELIEF SOUGHT

.

.Pursuant to

2l U.S.C. $ S53(n)(2), and Fed. R. Crim. P.32.2(c),Wells

Fargo Bank seeks

a determination of the validity and superiority of its securþ interest in the Laurel Mountain
Preserve real property,

in the amount of the outstanding principal and interest, plus fees, costs

and expenses due under the Note and Deed of Trust; and a determination that Well Fargo's
security interest in the Laurel Preserve Mountain real property is not subject to forfeiture

WHEREFORE, Third Parly Petitioner, Wells Fargo Bank, N..A'., having set forth the
nature and extent of its interest in the Laurel Mountain Preserve real property, petitions the Court

to find that Wells Fargo is a bone fide purchaser for value without knowledge that the property
was subject to forfeiture and accordingly amend its Preliminary Order of Forfeinre; and for such
other relief in favor of Wells Fargo as the Court deem just and proper.

,

Respectfully Submitted,
STEARNS WEAVER MILLER
WEISSLER ALHADEFF & SITTERSON, P.A.
Museum Tower- Suite 2200
150 West Flagler Street
Miami, FL 33130
Telephone No.: [phone]
Facsimile No.: [phone]

By:

/s/ Adam M. Schachter

ADAM M. SCHACHTER
aschachter@ stea¡nsweaver. com

ANA T. BARNETT
abarnett@ stearnsweaver. com

Case 1:09-cr-00433-JGK Document

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Filed 07102111 Page 4 of 4

kmelchiondo@ stearnsweaver. com

Appearing Pro Hac Vice

\¡ERIFICATION
In accordance with the requirements of

2l

U.S.C. g 853(n)(3):

I, Sara E. Ottman, am Assistant Vice President of Petitioner WELLS FARGO BANK,
N.4., successor by merger to Wachovia Bank, N.A. I declare under penalty of perjury that the
foregoing is true and correct to the best of my knowledge and belief.

*Joo-€. Êtl'^'-*

#L01.L722vI

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