Securities and Exchange Commission v. Nadel et al

Filing 880

MOTION to Approve Settlement by Burton W. Wiand. (Attachments: #1 Exhibit Exhibit A - Settlement Agreement)(Lamont, Michael)

UNITED S T A T E S D I S T R I C T C O U R T
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
V.

CaseNo. 8:09-cv-87-T-26TBM

ARTHUR NADEL,
SCOOP CAPITAL, LLC,
SCOOP MANAGEMENT, INC.
Defendants,
SCOOP REAL ESTATE, L.P.
V A L H A L L A INVESTMENT PARTNERS, L.P.,
V A L H A L L A MANAGEMENT, INC.
VICTORY IRA FUND, LTD,
VICTORY FUND, LTD,
VIKING IRA FUND, LLC,
VIKING FUND, LLC, A N D
VIKING MANAGEMENT,
Relief Defendants.
I
R E C E I V E R ' S MOTION T O APPROVE S E T T L E M E N T
Burton W. Wiand, as Receiver, moves the Court for an order approving settlement of
claims against Girls, Inc. of Sarasota County ("Girls, Inc.") for recovery of sums received
from one or more Receivership Entities as "charitable contributions" on the basis of the
Settlement Agreement attached as Exhibit A.

MEMORANDUM I N SUPPORT
The Securities and Exchange Commission (the "Commission" or "SEC") instituted
this action to "halt [an] ongoing fraud, maintain the status quo, and preserve investor assets
" (Dkt. 1, Compl., If 7.) Burton W. Wiand was appointed by this Court as the Receiver
for Defendants and Relief Defendants.

(See Order Reappointing Receiver (Dkt. 493).)

Additionally, the Receivership was expanded to include Venice Jet Center, LLC and
Tradewind, LLC (Dkt. 17); Laurel Mountain Preserve, LLC, Laurel Preserve, LLC, the
Marguerite J. Nadel Revocable Trust UAD 8/2/07, and the Laurel Mountain Preserve
Homeowners Association, Inc. (Dkt. 44); The Guy-Nadel Foundation, Inc. (Dkt. 68); Lime
Avenue Enterprises, LLC, and A Victorian Garden Florist, LLC (Dkt. 79); Viking Oil & Gas,
LLC (Dkt. 153); and Home Front Homes, LLC (Dkt. 172); and Traders Investment Club
(Dkt. 454).

A l l of the entities in receivership are collectively identified herein as the

Receivership Entities.
Pursuant to the Order Reappointing Receiver (Dkt. 493), the Receiver has the duty
and authority to:
2.
Investigate the manner in which the affairs of the Receivership
Entities were conducted and institute such actions and legal proceedings, for
the benefit and on behalf of the Receivership Entities and their investors and
other creditors as the Receiver deems necessary . . . against any transfers of
money or other proceeds directly or indirectly traceable from investors in the
Receivership Entities; provided such actions may include, but not be limited
to, seeking imposition of constructive trusts, disgorgement or profits, recovery
and/or avoidance of fraudulent transfers under Florida Statute § 726.101, et.
seq. or otherwise, rescission and restitution, the collection of debts, and such
orders from this Court as may be necessary to enforce this Order.
The Receiver's investigation has revealed several organizations that received
"charitable contributions" which consisted of proceeds of the scheme underlying this case.

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Those organizations' receipt of those funds operated to the detriment of investors in the
scheme underlying this case who lost money as a result of their investment. Girls, Inc. was
not an "investor" in the hedge funds used to perpetrate the scheme, but is a charitable
organization that received contributions which consisted of funds obtained through the
scheme. Specifically, Girls, Inc. received a total of $472,839.33 in charitable contributions
which consisted of such funds.
As shown by the attached Settlement Agreement, Girls, Inc., subject to the approval
of this Court, has agreed to pay $100,000.00, to be paid in accordance with a set payment
schedule.

In reaching this agreement, the Receiver considered the risks and expense of

litigation, and Girls, Inc.'s financial ability to pay.

Specifically, the Receiver considered

Girls, Inc.'s current financial situation, its other existing financial obligations, and the fact
that a judgment against Girls, Inc. would in all likelihood be uncoUectable. The Receiver
believes that the settlement provides a practical solution which resuhs in the maximum
benefit to the Receivership. Further, the settlement reflected by the Settlement Agreement is
in the best interests of the Receivership, the investors in the Receivership Entities, and Girls,
Inc., because resolution of the claims avoids protracted litigation, conserving Receivership
assets and judicial resources, and avoids the cost of litigation to Girls Inc.
WHEREFORE, the Receiver moves the Court to approve the settlement reflected by
the attached Settlement Agreement.
L O C A L R U L E 3.01(g) C E R T I F I C A T E O F COUNSEL
The undersigned counsel for the Receiver is authorized to represent to the Court that
the SEC has no objection to the Court's granting this motion.

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CERTIFICATE OF SERVICE
I H E R E B Y C E R T I F Y that on July 5, 2012,1 electronically filed the foregoing with
the Clerk of the Court by using the CM/ECF system.

s/ Michael Lamont
Gianluca Morello, FBN 034997
Email: [e-mail]
Michael S. Lamont, FBN 0527122
Email: mlamont(g),wiandlaw.com
Wiand Guerra King P.L.
3000 Bayport Drive
Suite 600
Tampa, FL 33607
Tel: [phone]
Fax: [phone]
Attorneys for the Receiver, Burton W. Wiand

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