|  In a surprise court appearance last Wednesday hedge fund owner Art Nadel pled guilty in a New York Federal court. It was a bitter disappointment to swindled investors, as well as to interested onlookers anxious for a glimpse of not only how he did it, but who he did it with. Nadel’s guilty plea may have removed the best—maybe the only—chance to make accountants and bookkeepers and managers at feeder hedge funds, all of whom had front row seats to the scandal, face public scrutiny while testifying about what went on at Scoop Management. Most people find it impossible to believe he acted alone. Nadel isn't tall, rangy, and CIA-connected, like fellow Ponzi All Star Allen Stanford, or even burly, like Bernie Madoff, but meek-looking, and unprepossessing physically. He's the Woody Allen, or, for those who still remember him, the Wally Cox of Ponzi World. There's lots of anger among jilted investors, who stand little chance of getting back anything more than a few pennies on the dollar of the $168 million they're estimated to have lost.
Why do Florida lawyers all seem like extras from "Body Heat?"
 If they're counting on Tampa attorney Burton Wiand's help, they may be waiting a long time. Many actions taken by Wiand since being named the federal receiver charged with unraveling Nadel's finances last January seem open to question. Real suspicions should also focus on what he hasn't done. Reading court transcripts can sometimes be eye-opening... Long-time SEC lawyer Wiand dragged his feet (top snippet) on supplying Nadel's files, which he'd seized in the civil action he's involved in against Nadel, to federal prosecutors in New York charged with convicting him in criminal court, clearly higher priority. Perhaps more importantly, his testimony in September revealed that he's not going after any money, other than his own ($750,ooo reportedly so far), with anything like the vengeance his job description promises jilted investors. "One of the receiver's highest priorities is to locate and recover any additional funds," reads the brief he filed when he went back to court asking for more money last summer. Yet three months later, almost nine months after he was appointed, Wiand's testimony revealed that he's aware, though somewhat vaguely, of $5 million he's owed from Christopher and Neil Moody... but he hasn't gotten around to asking them about it yet!
Wiand to investors: "The check's in the mail"
 Things look bad for Nadel's hapless investors. But the outlook for the citizens of Venice, Florida, where Nadel owned the same business that earlier trained Mohamed Atta to fly, is even more bleak. For them, Nadel’s descent from hedge fund owner to handcuffs may feel like going from the frying pan to the fire. That's because the new owner of the former Huffman Aviation owns a hedge fund, too. What a coincidence. Even worse, the new owner's top henchman, who often fronts for his various financial entities as their President, was at the heart of a Wall Street scandal that looted more money from investors than Art Nadel ever dreamed of stealing, and which was—until the financial meltdown last year—the biggest Wall Street had ever seen. The name of the new owner of the former Huffman Aviation, which a Venice City Attorney told the Venice City Council they had no right to know, is Eugene Gorab. Gorab, who claimed to be worth more than 100 million dollars in an interview with the Sarasota Herald Tribune last year, made his pile buying and selling hotels and casinos. He worked for a hugely successful tycoon named Barry Sternlicht who at one point while Gorab was working for him, owned more casinos than anyone on the planet.
We know what you're thinking. But wait. It gets worse.
 Gorab owns the majority stake in private equity fund Greenfield Partners in Norwalk Connecticut, just a few exits up the Merritt Parkway from Greenwich, where “private equity fund” Fairfield Partners helped Bernie Madoff relieve investors of unwanted capital. More interesting by far is that Gorab owns Clayton Holdings, a company whose failures in due-diligence played a direct role in the multibillion dollar collapse of the nation's housing market. Clayton Holdings is a due-diligence company, the nation's largest, which get hired by investment houses to make sure blocks of loans meet the seller's own standards. Despite the fact that the underlying home loans didn't get within shouting distance of meeting those quality standards, Clayton Holdings paid off like a slot machine, signing off on the mortgage investments, the instrument of mass destruction which Wall Street has successfully used to bomb the American economy back to the Stone Age. Gorab, who didn't own Clayton Holdings until recently, wasn't responsible. He bought the company as Clayton’s former President received immunity from New York’s Attorney General Andrew Cuomo in return for testimony about underwriting "exceptions" his firm’s project managers gave its Wall Street accounts. Does anyone remember the words "modified limited hangout?" Maybe we’ll learn how they did it... if Eugene Gorab—the man who now owns the former Huffman Aviation—decides to let the world take a look at Clayton's books.
The Straw Men
 Definition of “straw man”: noun (CRIME) n (also man of straw): Someone, often an imaginary person, who is used to hide an illegal or secret activity. “The fraud depended on hundreds of bank accounts being opened on behalf of straw men.” How do we know that Gorab owns Huffman Aviation, even though the three lads who say they're the owners refused to release the names of their investors? Simple: Gorab, for one thing, also owns Volo Aviation in Sarasota, and has a hundred million dollars in other aviation investments. That's one hundred million more in aviation investments than the lads claiming to be the new owners. More importantly, they were working for Gorab when they bought it. And he didn't fire them. Finally, the new front man for Volo Aviation at the Sarasota Airport, who "bought" it from Gorab, is Gorab's long-time lieutenant, he former President of Volo.
Meet Thom Harrow. He's "working to keep your trust."
 Thom Harrow, most recently listed as President of Volo Holdings, has been an officer of a myriad of Gorab's shell companies, which change almost daily, as the "ownership: of the Volo Sarasota just did, again. Harrow operates at least four FBO’s (Fixed Base of Operations) already, including the one at the Sarasota Airport. Remember the old TV commercials for The Rock? Prudential Securities? "The most important thing we earn is your trust." Turned out, it wasn't true. Harrow was a senior executive at Prudential Securities during the late 80’s and early 90’s while executives and brokers at the company were busily defrauding investors of $8 billion. Back then—in those far more innocent times—reporters called it the largest fraud in US history. No other Wall Street scandal came close to touching the debacle at Prudential Securities. Mike Milliken, at Drexel Burnham, was a piker by comparison. They settled his securities scandal (junk-bonds, remember?) for $650 million, a pittance by the $ 8 billion standard set by the Prudential scandal. According to NEWSWEEK, "In this topsy-turvy world due diligence was a sham, brokers were hounded — even fired — for questioning the quality of deals, and no executive displayed much interest in knowing what was really going on." Does that sound familiar? Kurt Eichenwald covered the story for TIME magazine, then wrote "Serpent on the Rock," a book about the scandal. According to a review of his book in the New York Times: "Eichenwald presented an appalling indictment of managers who did dozens of deals with a convicted embezzler, spent millions of investors' dollars on lavish trips to places like Cancun and Maui, and made cozy arrangements with developers to make themselves rich no matter how their clients fared."
But wait... Harrow himself wasn't charged with a crime, and deserves the benefit of the doubt. He deserves the benefit of the doubt, as he was, after all, unindicted. He was probably one of the good guys who stuck around to clean up the mess.
Locking-in profits for decades to come.
 Discovering that Harrow was working for "The Rock" when it melted into butter was no easy task. Few of Harrow's bios make mention of it. Perhaps because leaving it out creates an almost decade-long hole in his curriculum vitae, he 'fessed up and included it here. Then we discovered that, currently--right now--Harrow is Treasurer of a Baton Rouge Louisiana-based non-profit charity called Provident Resources Group. Provident's own literature shows them to be (charitably, natch!) involved in providing resources (hence the company's name, it appears they are big on providing resources) in the following fields: CitiState (sic), Education, Healthcare, Housing, and Senior Living. Here's how they describe themselves: "Based in Baton Rouge, La., Provident Resources Group is a not-for-profit organization with the mission of serving the needs of the elderly; promoting and advancing health care; assisting the poor by providing affordable housing; lessening the burdens of government; promoting and advancing education; and preserving the environment." In the pursuit of its charitable mission, Provident has become a national non-profit organization committed to the development, ownership and operation of state-of-the-art health, education, senior living, and multi-family housing facilities and services across the country. “Furthermore, Provident actively strives to assist state and local governments in lessening the burdens they face in providing many needed services to their citizens.”
Its all good. Right?
 So it came as something of a shock to discover that what they do mostly—resource-wise, that is—build and run: private prisons: eleven Private Correctional Facilities in Texas, Oklahoma, Ohio, Pennsylvania, Georgia,, and Alaska. Apparently, it came as something of a shock to the Wall Street Journal too. The May 1, 2002 Wall Street Journal covered Provident in their Section in Enron, under this headline: "Charities Said To Be Playing Enron-Style Partnership Game. "At the D. Ray James Prison in south Georgia, the inmates have been kept behind bars by all types of lawmen: sheriffs, chiefs of police and more than a few wardens. But never, until now, have they been kept in jail by a charity." What Provident offers the corrections world, in the most charitable way, of course, reported the Journal is “offering off-the-books financing for public and private prison operators." "Provident does this by creating special subsidiaries and partnerships that take advantage of controversial accounting rules and allow its clients to keep debt off of their balance sheets." Provident "isn't a conventional charity. It is run by a group of lawyers, investment bankers and financial consultants. Lehman Bros. Holdings Inc. and other Wall Street titans do its financial work." With that "impressive firepower, Provident is trying to carve a unique niche for itself in the corrections world, offering off-the-books financing for public and private prison operators." It has "helped the state of North Carolina and Cornell Cos., a for-profit prison company, buff their financial profiles." Provident "does this by creating special subsidiaries and partnerships that take advantage of controversial accounting rules and allow its clients to keep debt off of their balance sheets." In exchange for its role, Provident "arranges to receive potentially lucrative fees, some of which it calls exempt from federal income tax. In the last nine months Provident entities, with help from Lehman, have sold more than $420 million of debt to investors."
Like Enron. Only unindicted.
We thought: maybe we're just being cynical. It can happen. Then we found this headline: "PERINATAL UNIT CLOSING; NO MORE MATERNITY PATIENTS AT GRANADA HILLS COMMUNITY HOSPITAL Provident got involved with a struggling community hospital in the San Fernando Valley... offering to help. Reporter Evan Pondel in the January 22, 2003 Los Angeles Daily News picks up the story: "In an effort to rescue the hospital, Wallace struck a deal with a controversial charity for help. Soon thereafter, California's attorney general approved Baton Rouge, La.-based Provident Foundation Inc. to take control of the hospital's board." The organization has been operating as a not-for-profit group since 1999, and analysts say Provident is by no means a conventional charity. Matt Hull, analyst with Avondale partners in Nashville, Tenn., said in a previous interview that the company is run by a group of lawyers, investment bankers and financial consultants -- many of whom are former Lehman Brothers employees. James Doulgeris was hired by Provident to serve as interim CEO, and his firm, Healthcare Resource Specialists, was tapped to provide crisis and turnaround management strategies for the hospital. "We are in the center of settling our bankruptcy with creditors ... and the decline in patients we serve in the perinatal unit has been accelerating," said Doulgeris. "There are no plans to close other departments, and emergency services for expectant mothers still will be available through the hospital's emergency room."
Uh-oh. We could already tell the hospital wasn't going to make it... According to analyst Hull:: "Company President Stan Hicks, 53, who served as a member of the national finance committee for the Clinton-Gore campaign in 1992, appears to manage a company that, by some reports, receives lucrative fees under the guise of being a charity." Millie Hernandez has worked at the hospital for 17 years. She understands that Provident has invested in prison facilities and has a murky business reputation. "There's only so much you can take," Hernandez said. "The hospital can't function like this for much longer." In case you're wondering, the company is politically-connected at the highest levels. Provident's President Stan Hicks was on the National Finance Committee for the Clinton-Gore campaign in 1992.
"Meet the new Boss. Same as the old Boss."
 When the new owner of the former Huffman Aviation FBO took over operations at the Venice Airport last month, the Sarasota Herald Tribune was quick to note that the only noticeable change in operations “was a Shell fuel truck on the premises to replace the Chevron brand that former owner Art Nadel sold.” The statement was meant to be reassuring. In reality, it was not. It was business as usual. The ingredients for another world-class scandal at the Venice Airport are frighteningly visible. Sleazy characters in expensive suits. Abuse of power. Cover-up. During the special meeting of the Venice City Council called to consider the lease transfer before the federal bankruptcy judge's deadline, questions were repeatedly raised about why Tri-State would release no financial information on its owners. Surprisingly, the supposed new owners weren’t forced to answer. Leaping to their defense was an assistant city attorney who repeatedly advised the council they had no reason to object to Wiand’s choice. Calling the backgrounds of the new managers "blue chip," he said, "As staff we think they have passed the test probably more so than any tenant we've had at the airport." Groundbreaking American muckraker Upton Sinclair put it best: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Mayor Ed Martin, in a remarkable admission, indicated that he wasn’t fooled. "We're not in a position to determine who these people are,” he said. “Whether they are U.S. nationals, or whether they have criminal ties." Well, Ed. Now you know. NEXT: Sovereign Wealth Funds, Private Equity, Abu Dhabi, The Carlyle Group, & the Venice Municipal Airport | 
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