UNITE D STATE S DEPARTMEN T O F TRANSPORTIO N FEDERA L AVIATIO N ADMINISTRATIO N

WASHINGTON , D.C .

VENIC E JE T CENTER , LLC , Complainant , FA A Docke t No . 16-09-0 5

CIT Y O F VENICE , PL , Respondent . EXHIBI T LIS T TO : RESPONDEN T CIT Y O F VENICE , FLORIDA' S ANSWER , MOTIO N T O DISMISS , AN D MEMORANDU M O F POINT S AN D AUTHORITIE S I N SUPPOR T THEREO F



## (Exhibit s 1 throug h 18 ) Rober t C . Anderson , Esq . Cit y Attorne y Hal l & Anderson , P.A . 131 4 Eas t Venic e Ave. , Suit e E Venice , FL 3428 5 Telephone : (941 ) 480-099 9 Facsimile : (941)480-144 6 Thoma s R . Devin e , Esq . W . Eri c Pilsk , Esq . KAPLA N KIRSC H & ROCKWEL L LL P 100 1 Connecticu t

Av e NW , Suit e 90 5 Washington , D C 2003 6 Telephone : (202 ) 955-5600X56 8 Facsimile : (202 ) 955-561 6 Arthu r P . Ber g KAPLA N KIRSC H & ROCKWEL L LL P 64 1 Lexingto n Ave . Suit e 140 9 Ne w York , N Y 1002 2 Telephone : (212 ) 328-951 5 Facsimile : (646)514-544 0 <: 3

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1

X



### INDICTMENT

0 9 Cr . UNITE D STATE S DISTRIC T COUR T SOUTHERNDISTRIC T O F NE W YOR K UNITE D STATE S O F AMERIC A

-V . - 

### ARTHU R G . NADEL ,

Defendant .

_ _--____________x . COUNT S ON E THROUG H SI X (Securitie s Fraud ) Th e Gran d Jur ycharges : Relevan t Entitie s ein d Individual s 1 . A t certai n time s relevan t t o thi s Indictment , Scoo p Management , Inc. , wa s a genera l partnershi p wit h it s principa l plac e o f busines s i n Sarasota , Florida .

2 . A t certai n time s relevan t t o thi s Indictment , Scoo p Capita l LL C wa s a genera l partnershi p wit h it s principa l plac e o f busines s i n Sarasota , Florida .

3 . A t certai n time s relevan t t o thi s Indictment , Scoop Capita l LL C wa s th e genera l partne r o f Victor yIR AFun d Ltd. , Scoo p Rea l Estat e LP , an d Victor yFund Ltd . Victor yIR AFun d Ltd . wa s a limite d partnershi p wit h it s principa l plac e o f busines s i n Sarasota , Florida . Scoo p Rea l Estat e L P wa s a limite d partnershi p wit h it s principa l plac e o f busines s i n Sarasota , Florida .Documen t lioste d a t XlSUPR A tittp://www.jdsupra.com/post/documentViewer.aspx?fid=6e5505d4-b041-4bbd-ba90-ea3f2a8d120 c 

### Victor yFun

d Ltd . wa s a limite d partnershi p wit h it s principa l plac e o f busines s i n Sarasota , Florida .

4 . A t certai n time s relevan t t o thi s Indictment , Valhall a Management , Inc. , wa s a genera l partnershi p wit h it s principa l plac e o f busines s i n Sarasota , Florida . Valhall a Management , Inc. , wa s th e genera l partne r o f Valhall a Investmen t Partners , whic h wa s a limite d partnership , wit h it s principa l plac e o f busines s i n Sarasota , Florida .

5 . A t certai n time s relevan t t o thi s Indictment , Vikin g Managemen t LL C wa s a limite d liabilit ycompan ywit h it s principa l plac e o f busines s i n Sarasota , Florida . Vikin g Managemen t LL C wa s th e genera l partne r o f Vikin g Fund , LLC , an d Vikin g IR

AFund , LLC , whic h wer e limite d partnership s forme d o n o r abou t Marc h 15 , 2001 , wit h thei r principa l place s o f busines s i n Sarasota , Florida .

6 . A t al l time s relevan t t o thi s Indictment , ARTHU R G . NADEL , th e defendant , wa s responsibl e fo r th e purchase s and sale s o f securitie s i n th e followin g investmen t funds : (a ) Victor yIR A Fun d Ltd. ; (b ) Scoo p Rea l Estat e LP ; (c ) Victor yFun d Ltd. ; (d ) Valhall a Investmen t Partners ; (e ) Vikin g Fund , LLC ; and (f ) Vikin g IR

AFund , LL C (collectivel yth e ^'Funds'') . NADE L als o controlled , operated , an d manage d Scoo p Management , Inc. , an d Scoo p Capita l LLC .Documen t hoste d a t JDSUPR A http://www.jdsupra.com/post/documentViewer.aspx?fid=6e5505d4-b041-4bbd-ba90-ea3f2a8d120 d 

### 7 . Fro ma t leas t i n o r abou t 199 9 throug h i n o r abou t Januar y2009 , ARTHU R G . NADEL , th e defendant , purchase d and sol d securitie s i n th e Fund s throug h th e Ne w York , Ne w York , offic e o f a . broker-ag e firm("Brokerag e Firm") . A t al l time s relevan t t o t::hi s Ind.ictment , NADE L execute d trade s base d o n a n exchang e trade d fun d liste d o n th e Nationa l Associatio n o f Securitie s Dealer s Automate d Quotation s ("NASDAQ" ) tha t wa s intende d t o trac k th e NASDA Q index . Th e Schem e t o Defrau d

8 . Fro ma t leas t i n o r abou t 199 9 throug h i n o r abou t Januar y2009 , ARTHU R G . NADEL , th e defendant , perpetrate d a schem e t: o defrau d th e investor s o f th e Fund s b ysolicitin g hundred s o f million s o f dollar s o f fund s unde r fals e pretenses , failin g t o inves t t:h

e mone ya s promised , falsel yclaimin g tha t hi s purchase s an d sale s o f securitie s resulte d i n hig h rate s o f returns , an d misappropriatin g an d convertin g investo r fund s fo r hi s ow n benefi t an d th e benefi t o f other s withou t th e knowledg e an d authorizatio n o f investors .

9 . T o execut e th e scheme , ARTHUR G . NADEL , th e defendant , .solicited an d cause d other s t o solici t prospectiv e client s t o inves t thei r mone yi n th e Fund s base d upon , amon g othe r things , hi s fals e statement s that : (a ) th e investo r fund s woul d b e use d t o purchas e an d sel l securities ; (b ) th e performanc e o f eac h o f th e Fund s wa s consistentl ypositive ; and (c ) th e ne t asse tDocumen t hoste d a t JDSUPR A http://www.jdsupra.c o nn/post/documentViewer.aspx?fid=6e5505d4-b041-4bt)d-ba90-ea3f2a8d120 c 

### valu e o f eac h o f th e Fund s wa s ten s o f million s o f dollars . Based , i n part , o n thes e misrepresentation s fromi n o r abou t 199 9 throug h in o r abou t Januar y2009 , client s investe d a t leas t approximatel y$ 3 6 0 millio n int o th e Funds .

10 . I n trut h and i n fact , a s ARTHU R G . NADEL , th e defendant , wel l knew , thes e representation s wer e false . Notwithstandin g NADEL' s statement s t o th e contrary , an d notwithstandin g fals e representation s tha t NADE L mad e an d cause d t:. o b e mad e o n investo r accoun t statement s an d othe r document s sen t t.hroug h th e Unite d State s Posta l Servic e (th e "Posta l Service" ) t o investor s i n th e Fund s throughou t th e operatio n o f thi s scheme , NADE L misappropriate d investo r fund s an d converte d the m fo r persona l us e fo r NADEL , NADEL' s family , an d NADEL' s businesses . Moreover , notwithstandin g NADEL' s statement s t o investor s an d other s tha t eac h o f th e Fund s ha d consistentl ypositiv e rate s o f ar e tur n o f betwee n approximatel y1 8 percen t and 4 8 percen t eac h year , th e performanc e o f th e Fund s wa s no t consistentl ypositiv e an d th e rate s o f retur n wer e substantiall yan d materiall yless .

11 . Fro ma t leas t i n o r abou t 199 9 throug h i n o r abou t Januar y2009 , ARTHU R G . NADEL , th e defendant , als o falsel y represente d t o investor s tha t hi s purchase s an d sale s o f securitie s i n th e Funds ' ha d generate d cumulativel ymor e tha n $27 1 millio n i n gains . I n trut h an d i n fact , a s NADE L wel l knew , durin g thi s perio d o f time , NADEL' s tradin g resulte d i n a n overal lDocumen t hoste d a t JDSUPR A http://www.jdsupra.com/post/documentViewer.aspx?fpd=6e5505d4-b041-4bbd-ba90-ea3f2a8d120c i 

### ne t los s i n th e Funds . Fo r example , i n o r abou t Septembe r 2008 , NADE L cause d document s t o b e sen t t o client s tha t state d tha t ther e wa s approximatel y$70,500,00 0 i n tota l asset s i n th e Valhall a Investmen t Partner s LP , approximatel y$75,200,00 0 i n tota l asset s i n Victor yFund Ltd. , an d approximatel y$65,300,00 0 i n tota l asset s i n Vikin g Fund LLC . I n trut h an d i n fact , i n o r abou t Septembe r 2008 , Valhall a Investmen t Partner s LP , Victor y Fund Ltd. , an d Vikin g Fund LL C hel d onl ya smal l fractio n o f tha t mone yo n behal f o f it s clients .

12 . ARTHU R G . NADEL , th e defendant , accepte d hundred s o f million s o f dollar s o f investo r money , cumulatively , fro m individua l investors , charitabl e organizations , trusts , an d hedg e fund s tha t investe d i n th e Funds . Fro ma t leas t i n o r abou t 199 9 throug h i n o r abou t Januar y2009 , th e Fund s ha d ove r 35 0 investors . Fro m

th e outse t o f th e scheme , an d continuin g throughou t it s operation , NADE L obtaine d investo r fund s through interstat e wir e transfer s fro mfinancia l institution s locate d i n th e Souther n Distric t o f Ne w Yor k and elsewher e an d throug h mailing s delivere d byth e Posta l Service .

13 . I n connectio n wit h thi s scheme , ARTHU R G . NADEL , th e defendant , create d an d cause d t o b e create d fals e and fraudulen t document s including , bu t no t limite d to , clien t accoun t statement s tha t reflecte d fictitiou s positiv e return s consisten t wit h th e return s tha t ha d bee n promise d t o investor s i n th e Funds .Documen t hoste d a t JDSUPR A http://www.jdsupra.com/post/documentViewer.aspx?fid=6e5505d4-b041-4bbd-ba90-ea3f2a8d120 c 

### 14 . T o execut e th e scheme , ARTHU R G . NADEL , th e defendant , represente d an d cause d other s t o represen t t o investor s t::ha t eac h o f th e Fund s wa s operate d and manage d separately . I n ti^rut h an d i n fact , a s NADE L wel l knew , NADE L managed , purchase d an d sol d securitie s within , an d treate d th e Fund s as , a singl e a.ccoun t regardles s o f th e Fund i n whic h client s ha d invested . 15 . ARTHU R G . NADEL , th e defendant , receive d a managemen t fe e o f on e percen t o f th e ne t asse t valu e o f eac h o f tsh e Fund s an d a performanc e incentiv e fe e o f 12. 5 percen t o f al l o f the profits , afte r subtractio n o f fee s an d expenses , earne d fro mth e investment s i n th e Funds . From a t leas t i n o r abou t 199 9 u p throug h an d includin g a t leas t i n o r abou t 2008 , a s a resul t o f UADEL' s fals e representation s regardin g th e performanc e o f eac h o f th e Fund s an d th e ne t asse t valu e i n eac h o f th e Funds , NADE L fraudulentl yreceive d ten s o f million s o f dollar s i n managemen t fee s an d performanc e incentiv e fee s tha t di d no t reflec t th e actua l performance , o r th e ne t asse t value s of , th e Funds .

16 . I n additio n t o receivin g a managemen t fe e an d a performanc e incentiv e fee , ARTHU R G . NADEL , th e defendant , transferre d and cause d t o b e transferre d million s o f dollar s o f investo r mone yi n th e Fund s t o account s an d entitie s owne d and/o r controlle d b yNADEL . Th e investor s i n th e Fund s di d no t authoriz e NADE L t o mak e thes e transfers , an d NADE L faile d t o disclos e th eDocumen t hoste d a t JDSUPR A htlp://www.jdsupra.com/post/documentViewer.aspx?fid=6e5505d4-b041-4bbd-ba90-ea3f2a8d120c. ' 

### transfe r o f thes e fund s t o account s an d entitie s tha t h e owne d and/o r controlle d t o investors . Statutor yAllegatio n 17 . O n o r abou t th e date s se t fort h below , i n th e Souther n Distric t o f Ne w Yor k and elsewhere , ARTHU R G . NADEL , th e defendant , unlawfully , willfully , an d knowingly , directl yand indirectly , byth e us e o f mean s an d instrumentalitie s o f interstat e commerce , an d o f th e mails , and o f facilitie s o f nationa l securitie s exchanges , i n connectio n wit h th e purchas e an d sal e o f securities , di d us e and emplo ymcinipulative and deceptiv e device s and contrivances , i n violatio n o f Titl e 17 , Cod e o f Federa l Regulations , Sectio n 240.10b-5 , by : (a ) employin g devices , schemes , an d artifice s t o defraud ; (b ) makin g untru e statement s o f materia l fact s an d omittin g t o stat e materia l fact s necessar yi n orde r t o mak e th e statement s made , i n ligh t o f th e circumstance s unde r whic h the ywer e made , no t misleading ; an d (c ) engagin g i n transactions , acts , practices , an d course s o f busines s whic h operate d an d woul d operat e a s a fraud an d decei t upo n persons , t o wit , NADE L mad e fals e an d misleadin g statement s tha t induce d investor s t o inves t thei r mone yi n th e Fund s liste d below : COUN T ON E TW O APPROXIMAT E DATE S

Fro ma t leas t i n o r abou t 200 3 throug h i n o r abou t Januar y200 9 Fro ma t leas t i n o r abou t 200 4 throug h i n o r abou t Januar y200 9 FUND Victor yIR

AFun d Ltd . Scoo p Rea l Estat e L PDocumen t hoste d a t JDSUPR A htlp://www.jdsupra.com/post/documentViewer.aspx?fid=6e5505d4-b041-4bbd-ba90-ea3f2a8d120 d 

### THRE E FOU R FIV E SI X Fro ma t leas t i n o r abou t 200 1

throug h i n o r abou t Januar y200 9 Fro ma t leas t i n o r abou t 199 9 throug h i n o r abou t Januar y200 9 Fro ma t leas t i n o r abou t 200 1 throug h i n o r abou t Januar y200 9 Fro ma t leas t i n o r abou t 200 1 throug h i n o r abou t Januar y200 9 Victor yFund Ltd . Valhall a Investmen t Partner s Vikin g Fund , LL C Vikin g IR

AFund , T,T,

C (Titl e 15 , Unite d State s Code , Section s 78j(b ) an d 78ff ; Titl e 17 , Cod e o f Federa l Regulations , Sectio n 240.10b-5 ;

Titl e 18 , Unite d State s Code , Sectio n 2. )

COUNT SEVE N (Mai l Fraud ) Th e Gran d Jur yfurthe r charges : 18 . Th e allegation s containe d i n paragraph s 1 through 16 , above , ar e hereb yrepeated , realleged , an d incorporate d b y referenc e a s i f full yse t fort h herein .

19 . Fro mi n o r abou t 200 2 throug h i n o r abou t Decembe r 2008 , i n th e Souther n Distric t o f Ne w Yor k an d elsewhere , ARTHU R G . NADEL , th e defendant , unlawfully , willfully , an d knowingly , havin g devise d an d intendin g t o devis e a schem e an d artific e t o defraud , an d fo r obtainin g mone yan d propert yb ymean s o f fals e an d fraudulen t pretenses , representations , an d promises , fo r the purpos e o f executin g suc h schem e an d artific e an d attemptin g t o d o so , di d plac e i n pos t office s an d authorize d depositorie s fo r mai l matter , matter s an d thing s t o b e sen t an d delivere d byth e Posta l Service , an d di d deposi t and caus e t o b e deposite d matter s an dDocumen t hoste d a t JDoUPR A http://www.jdsupra.c o m/post/documentViewer.aspx?rid=6e5505d4-b041-4bbd-ba90-ea3f2a8d120 c 

### thing s t o b e sen t an d delivere d byprivat e an d commercia l interstat e carriers , and di d tak e and receiv e therefro msuc h matter s an d things , an d di d knowingl ycaus e t o b e delivered , b y mai l an d suc h carrier s accordin g t o th e direction s thereon , and a t the . place s a t whic h the ywer e directe d t o b e delivere d b yth e person s t o who mthe ywer e addressed , suc h matter s an d things , t o wit , a s par t o f a schem e t o defrau d th e investor s i n th e Funds , NADE L sen t an d cause d t o b e sen t an d delivere d vi a th e Posta l Servic e fals e an d fraudulen t accoun t statement s fromth e Fund s t o investors , som e o f who mwer e locate d i n Ne w York , Ne w York .

(Titl e 18 , Unite d State s Code , Section s 134 1 an d 2. ) COUNT S EIGH T THROUG H FIFTEE N

(Wir e Fraud ) Th e Gran d Jur yfurthe r charges : 20 . Th e allegation s containe d i n paragraph s 1 through 16 , above , ar e herebyrepeated , realleged , an d incorporate d b y referenc e a s i f full yse t fort h herein .

21 . O n o r abou t th e date s se t fort h below , i n th e Souther n Distric t o f Ne w Yor k an d elsewhere , ARTHU R G . NADEL , th e defendant , unlawfully , willfully , an d knowingly , havin g devise d an d intendin g t o devis e a schem e an d artific e t o defraud , an d fo r obtainin g mone yan d propert ybymean s o f fals e an d fraudulen t pretenses , representation s an d promises , di d transmi t ari d caus e t o t> e transmitte d b ymean s o f wire , radio , an d televisio nDocumen t hoste d a t JDSUPRA' , http://www.jdsupra.c o nn/post/documentViewer.aspx?fid=6e5505d4-b041-4bt)d-ba90-ea3f2a8d12' r 

### communicatio n i n interstat e an d foreig n commerce , writings , signs , signals , pictures , an d sound s fo r th e purpos e o f executin g suc h schem e and artifice , t o wit , NADE L cause d mone yt o b e transferre d bywir e fromNe w York , Ne w York , t o ban k account s locate d outsid e Ne w Yor k fo r th e purpos e o f executin g th e schem e t o defrau d th e investor s i n th e Funds , a s se t fort h below : COUNT EIGH T NIN E

TE N

ELEVE N TWELV E

THIRTEE N FOURTEE N

FIFTEE N APPROXIMAT E

DATE S 03/25/0 8 04/02/0 8 06/24/0 8 07/02/0 8 08/22/0 8 11/06/0 8 12/02/0 8 01/05/0 9 DESCRIPTIO NO F TRANSFE R

Wir e transfe r o f approximatel y $200,00 0 fromNe w York , Ne w York , t o a ban k accoun t i n Florid a Wir e transfe r o f approximatel y $100,00 0 fro mNe w York , Ne w York , t o a ban k accoun t i n Florid a Wir e transfe r o f approximatel y $400,00 0 fromNe w York , Ne w York , t o a ban k accoun t i n Florid a Wir e transfe r o f approximatel y $50,00 0 fromNe w York , Ne w York , t o a ban k accoun t i n Florid a Wir e transfe r o f approximatel y $900,00 0 fro mNe w York , Ne w York , t o a ban k accoun t i n Florid a Wir e transfe r o f approximatel y $75,00 0 from

Ne w York , Ne w York , t o a ban k accoun t i n Florid a Wir e transfe r o f approximatel y $350,00 0 fro mNe w York , Ne w York , t o a ban k accoun t i n Florid a Wir e transfe r o f approximatel y $179,00 0 fromNe w York , Ne w York , t o a ban k accoun t i n Florid a (Titl e 18 , Unite d State s Code , Section s 134 3 an d 2. )

1 0Documen t hoste d a t JDSUPRA , http://www.jdsupra.c o m/post/documentViewer.aspx?rid=6e5505d4-b041-4bbd-ba90-ea3f2a8d12C . 

### FORFEITUR E ALLEGATIO N 22 . A s a resul t o f committin g on e o r mor e o f th e foregoin g securitie s fraud offenses , i n violatio n o f Titl e 15 , Unite d State s Code , Section s 78j(b ) an d 78ff , Titl e 18 , Unite d State s Code , Sectio n 371 , and Titl e 17 , Cod e o f Federa l Regulations , Sectio n 2 4 0.10b-5 , a s allege d i n Count s On e through Si x o f thi s Indictment , and th e mai l frau d offense , i n violatio n o f Titl e 18 , Unite d State s Code , Sectio n 1341 , a s allege d i n Coun t Seve n o f thi s Indictment , and th e wir e frau d offenses , i n violatio n o f Titl e 18 , Unite d State s Code , Sectio n 1343 , a s allege d i n Count s Eigh t throug h Fiftee n o f thi s Indictment , ARTHU R G . NADEL , th e defendant , shal l forfei t t o th e Unite d State s pursuan t t o Titl e 18 , Unite d State s Code , Sectio n 981(a ) (1 ) (C ) , an d Titl e 28 , Unite d State s Code , Sectio n 2 4 61 , al l property , rea l an d personal , tha t constitute s o r i s derive d fro mproceed s traceabl e t o th e commissio n o f th e frau d offenses , including , bu t no t limite d to , th e following :

a . A t leas t approximatel y$36 0 millio n i n Unite d State s currency , i n tha t suc h su mi n aggregat e i s propert y representin g th e amoun t o f proceed s obtaine d a s a resul t o f the charge d securitie s fraud , mai l fraud , an d wir e fraud offenses ;

1 1Documen t hoste d a t JDS U PR A http://www.jdsupra.c o m/post/documentViewer.aspx?fid=6e5505d4-b041-4bbd-ba90-ea3f2a8d12C 

### b . An yand al l fund s o n deposi t i n Accoun t No . 284010931 6 hel d i n th e nam e o f Marguerit e J . Nade l Revocabl e Trus t a t Norther n Trust , N.A . ;

c . Th e rea l propert yan d appurtenance s know n an d describe d a s 396 6 Countr yVie w Drive , Sarasota , Florida ;

d . Th e rea l propert yan d appurtenance s know n an d describe d a s 1557 6 Fruitvill e Road , Sarasota , Florida ;

e . Th e rea l propert yan d appurtenance s know n an d describe d 13 1 Garre n Cree k Road , Fairview , Nort h Carolina ;

f . Th e rea l propert yan d appurtenance s know n an d describe d a s approximatel yacre s and forty-fiv e lot s i n th e name o f Scoo p Capital , LLC , i n Thomasville , Georgia ;

g . Th e rea l propert yand appurtenance s know n an d describe d a s approximatel ythirty-seve n acre s i n th e nam e o f Scoo p Capital , LLC , i n Grad yCounty , Georgia ;

h . Al l right , title , an d interes t i n th e entit y know n and describe d a s th e Venic e Je t Cente r locate d i n Venice , Florida ; i . Al l right , title , and interes t i n th e entitie s know n and describe d a s Laure l Mountai n Preserve , LLC , Laure l Preserve , LLC , an d Laure l Moiintai n Preserv e Homeowner s Association , Inc. , including , bu t no t limite d to , 42 0 acre s i n Buncomb e Count yan d McDowel l County , Nort h Carolina ;

1 2Documen t hoste d a t JDSUPRA . http://www.jdsupra.c o m/post/documentViewer.aspx?fid=6e5505d4-b041-4bbd-ba90-ea3f2a8d12C. - 

### j . Al l right , title , and interes t i n th e entit y know n an d describe d a s Tradewind , LLC , including , bu t no t limite d to , fiv e airplanes , on e helicopter , and thirty-on e airpor t hangars , locate d i n Newnan-Cowet a Count yAirport , Georgia ; an d k . Al l right , title , and interes t i n th e entit y know n an d describe d a s th e Guy-Nade l Foundation , Inc . Sxabstitut e Asset s Provisio n 23 . I f an

yo f th e above-describe d forfeitabl e property , a s a resul t o f anyac t o r omissio n o f th e defendant :

a . canno t b e locate d upo n th e exercis e o f du e diligence ; b . ha s bee n transferre d o r sol d to , o r deposite d •with , a thir d party ;

c . ha s bee n place d beyon d th e jurisdictio n o f th e court ; d . ha s bee n substantiall ydiminishe d i n value ; o r

e . ha s bee n commingle d wit h othe r propert ywhic h canno t b e divide d withou t difficulty ;

1 3Documen t hoste d a t JDSUPR A http://www.jdsupr a .com/post/documentViewer.aspx?fid=6e5505d4-b04 1 -4bbd-ba90-ea3f2a8 d 120 d 

### i t i s th e inten t o f th e Unite d States , pursuan t t o Titl e 21 , Unite d State s Code , Sectio n 853(p) , t o see k forfeitur e o f an y othe r propert yo f th e defendan t up t o th e valu e o f th e forfeitabl e propert ydescribe d above . (Titl e 15 , Unite d State s Code , Section s 78j(b ) and 78ff ;

Titl e 17 , Cod e o f Federa l Regulations , Sectio n 240.10b-5 ; Titl e 18 , Unite d State s Code , Section s 981(a)(1)(C) , 1341 , an d 1343 ; Titl e 21 , Unite d State s Code , Sectio n 853(p) ; an d Titl e 28 , Unite d State s Code , Sectio n 2461. )

)REPERSO NJJl / LE V L . DASSI N FOREPERSO N Actin g Unite d State s Attorne y

1 4Documen t hoste d a t JDSUPR A http://www.jdsupra.c o m/post/documentViewer.aspx?fid=6e5505d4-b041-4bbd-ba90-ea3f2a8d120i , 

### FormNo . USA-33S-27 4 (Ed . 9-25-58 )

UNITE D STATE S DISTRIC T COUR T SOUTHERNDISTRIC T O F NE W YOR K

UNITE D STATE S O F AMERIC A

-V. - ARTHUR G . NADEL , Defendant . INDICTMENT 0 9 Cr . (Titl e 15 , Unite d State s Code , Section s 78j(b ) and 78ff ; Titl e 17 , Cod e o f Federa l Regulations ,

Section s 240.10b-5 ; an d Titl e 18 , Unite d State s Code , Section s 2 ,

371 , 1341 , and 1343. ) LE V L . DASSI N Actin g Unite d State s Attorney .

ATRU E BIL LCas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/200 9 Pag e 1 o f 1 2 Cit y Exhibi t

2 UNITE D STATE S DISTRIC T COUR T MIDDL E DISTRIC T O F FLORID A TAMP A DIVISIO N SECURITIE S AN D EXCHANG E COMMISSION , Plaintiff, V . ARTHU RNADEL , SCOO P CAPITAL , LLC , SCOO P MANAGEMENT , INC. ,

Defendants , SCOO P REA L ESTATE , L.P. , VALHALL A INVESTMEN T PARTNERS , L.P . VALHALL A MANAGEMENT , INC. , VICTOR Y FUND , LTD , VIKIN G IR A FUND , LLC , VIKIN G FUND , LLC , AN D VIKIN G MANAGEMENT , LLC .

Relie f Defendants . / CAS E NO, : 8:09-cv-0087-T-26TB M

RECEIVER' S DECLARATIO N I N SUPPOR T O F TH E UNOPPOSE D MOTIO N T O EXPAN D TH E SCOP E O F RECEIVERSHI P Burto n W . Wian ddeclare s a s follows : 1 . I a ma n attorne y wit

h Fowle r Whit e Bogg s P.A . ("Fowle r White" ) in Tampa , Florida . 2 . I n th e Januai y 21 , 2009 , Orde r Appointin g Receive r

(Doc . 8) , th e Cour

t appointe dm e Receive r

ove r (a ) defendant s Scoo p Capital , LL C ("Scoo p Capital" ) an dScoo p Management , Inc . ("Scoo p Management" ) an d(b ) relie f defendant s Scoo p Rea

l Estate , L.P. , Valhall aInvestmen t

Partners , L.P. ; Valhall aManagement , Inc. ; Victory IR A Fund , Ltd. ;Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/200 9 Pag e 2 o f 1 2

Victor y Fund , Ltd. ; Vikin g IR A Fund , LLC ; Vikin g Fund , LLC ; andVikin g Managemen t (collectively , th e "Receivershi p Entities; " an dScoo p Rea

l Estate , Valhall aInvestment , Victory IRA , Victor y Fund , Vikin g IRA , andVikin g Fun dar e collectively refen-edto a s th e "Hedg e Funds") . 3 . B y earl y afternoo n o n January 21 , 2009, 1 ha dentere dan dobtaine dcontro l o f th e office s o f

th e Receivershi p Entitie s (locate da t 161 8 Mai n Street , Sarasota , F L 34236 ) an d ha dbegu n my investigatio n into th e affair s o f th e Receivershi p Entities . Thos e office s als o wer e use db y Arthu r

Nade l ("Nadel" ) a s th e headquarter s fo r administerin g hi s contro l o f othe r businesse s ( I refe r

t o thos e office s a s th e "Office") . 4 . I hav e bee n assiste di n m y investigatio n b y m y attorneys , a n accountant , and infonnatio n technolog y experts . Sinc e I obtaine dcontro l o f th e Receivershi p Entities , I , m y attorneys , and/o r

m y accountan t

hav e haddiscussion s - includin g continuin g discussion s - wit h anumbe r

o f peopl e associate dwit

h Nade l and/o r

th e Receivershi p Entities , includin g officer s o f

som e o f th e Receivershi p Entitie s an dpersons responsibl e for maintainin g th e financial book s o f

th e Receivershi p Entitie s ando f othe r businesse s controlle db y Nadel , fo r operatin g othe r

businesse s controlle db y Nadel , fo r performin g accountin g services , andfo r administerin g th e Hedg e Funds . 5 . W e hav e als o reviewe ddocument s locate di n th e Office , document s obtaine d fromth e accountan t

fo r th e Receiver.ship Entities , informatio n store do n th e Receivershi p Entities ' compute r

network , document s obtaine dfromothe r businesse s controlle db y Nadel , an dinformatio n availabl e in th e publi c record .Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/200 9 Pag e 3 o f 1 2

6 . Ou r

investigatio n ha s reveale dinfonnatio n showin g tha t additiona l businesse s controlle db y Nade l an din whic h h e ha daful l o r partia l interes t

wer e purchase dand/o r funde dwit

h mone y derive dfro

mNadel' s fraudulen t

investmen t

schem e (th e "scheme") . 7 . I n Plaintiff s Emergenc y Motio n an dMemorandu moi ' La w i n Suppor

t o f Temporar y Restrainin g Orde r andOthe r

Emergenc y Relie f

(th e "SEC' s Emergenc y Motion" ) (Doc . 2 ) an dsupportin g papers , th e Securitie s an dExchang e Commissio n (th e "SEC" ) presente devidenc e showin g that Nade l defraude dinvestor s i n th e si x Hedg e Fund s fro ma t leas t January 200 8 unti l th e tim e h e fledth e jurisdictio n b y "massivel y overstatin g th e valu e o f investors ' interest s in them. " SE C Emcrg . Mot . a t 2 , 6 . 8 . A s show n by th e SEC , Nade l defraude dinvestor s throug h hi s contro l o f th e Hedg e Funds ' adviser s an dmanagers . Scoo p Capital an dScoo p Management , whic h ar e no w i n receivership . Id . a

t 4-6 . Throug h thos e entities , Nade l wa s ultimatel y responsibl e fo r controllin g th e investment s funds ' investmen t activities . 9 . A s note dabove , th e SE C presente devidenc e showin g tha t Nade l defraude d investor s sinc e a

t leas t Januar y 2008 . Durin g our investigation , w e uncovere devidenc e showin g th e fraudbega n a t leas t a s earl y a s 200 3 (an di

n al l likelihoo dbefor e then) . 10 . Ou r

investigatio n ha s reveale dtha t fo r eac h Hedg e Fund , th e fund' s perfomianc e a s disclose dt o investor s wa s base dmainl y o n mone y an dtradin g result s tha t Nade l purporte dt o hav e i n tw o accounts : abrokerag e accoun t cleare dthroug h Goldma n Sach s (jroup , Inc . (i n whic h mone y wa s purportedl y trade dt o generat e th e purporte dreturn s Nade l wa s yielding ) an daban k accoun t (fro mwhic h purporte ddistribution s an dpurporte d redemption s wer e apparentl y paid) . (Whil e th e disclo.se dperformanc e o f som e fund s a

t time sCas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/200 9 Pag e 4 o f 1 2

als o too k int o accoun t

investment s purportedl y hel di n othe r accounts , th e valu e o f

thos e purporte dinvestment s di dno t meaningfull y impac t

th e analysi s in th e tabl e belo w - th e ovei-whelmin g majority o f th e purporte dtradin g wa s suppose dt o tak e plac e i

n th e Goldman Sach s brokerag e accounts) . 11 . Belo w i s atabl e comparin g actual value s o f th e Hedg e Fund s t

o th e value s a s represente dt o investors . Specifically , fo r eac h year-en dfro

m200 3 t o 2007 , th e tabl e list s th e actual valu e o f

th e brokerag e accoun t

o f eac h Hedg e Fund(identifie da s "Actua l Brokerage" ) an dth e actual valu e o f

th e ban k accoun t o f eac h Hedg e Fun d(identifie da s "Actua l Bank"). Th e actual value s o f

eac h fun dfo r eac h analyze dtim e perio dar e adde dt o determin e th e actual total valu e o f

th e Hedg e Fund s a s o f

Decembe r

31st ; tha t valu e i s identifie din th e ro w lahcic d"Tota l Actual Value. " Finally , th e las t row , labele d"Valu e Represente dt o Investors, " identifie s th e collectiv e valu e o f th e fund s a s o f

Decembe r

31s t o f eac h yea

r analyze di

n th e tabl e a s represente dt o investor s an da s use db y Receivershi p Entitie s t o comput e fees , returns , an dothe r variables .Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/200 9 Pag e 5 o f 1 2

Valu e a s o

f 12/31/0 3 ($ ) Valu e a s o f 12/31/0 4 ($ ) Valu e a s o f

12/31/0 5 ($ ) Scoo p Rea l Estat e Actua l Brokerag e Actua l Ban

k fun

dno t i n existenc e 16,670,254.6 9

2,595.00 6 2 6 20,435,896.7 5

^368,.^81.6 9 Victor y Fun d Actua l Brokerag e Actua l Bank 22,680,904.6 9 3,672,956.5 4 23,848,019.2 7

2,051,485.2 5 23,324,285.5 1

724.809.8 5 Victor y IR A .'\ctua l Brokerag e Actual Bank 5,898,125.2 8 283,477.2 0 13,070,55 8 9 7

1,733.770.8 0 17,746,441.1 2

2,223,265.6 1 V'alluill aInvestmen t Actual Brokerag e Actual Ban

k 8,448,343.0 9

576,760.4 9 19,448,979.0 3

3,391,544.4 0 14.249,335.9 5

3,027,125.6 5 Vikin g Fun d Actua l Brokerag e Actua l Ban

k 23,411,778.9 8

1,382,193.9 3 33,375,622.7 5

5,184,911.2 6 25,983.502.3 3

,112,871.2 9 Valu e a s o f

12/31/06(5 ) Valu e a s o f

12/31/0 7 ($ ) 17,597,319.9 5 202,116.9 5 2,689,054.5 3

1,443,406.9 2 7,890,073.1 : 326,132.1 5 2,586,116.5 8

551,836.4 1 9,981,754.7 7 325.675.5 6 1,096,190.2 2

178,009.4 3 7,017,679.3 3 406.661.6 5 10,054,454.1 1 185,311.7 0 3,429,805.8 3

13,281.4 7 2,036.992.8 9 1,583,671.2 6 Vikin g IR A Actual Brokerag e Actua l Bank 14,172,117.0 8 293,720,7 8 18,767.69 6 5 2

2,935,428.0 3 19,787,093.8 5

J . 548,977.1 0 9,539,919.2 1 187,995.9 0 1,738,703.9 3

695,791.2 0 TOTA L ACTUA L VALU E VALU E REPRESENTE D T O INVESTOR S 80,820,378.0 6 128,953,973.2 7 143,073,367.2 3

216,868,604.4 6 132,731.986.7 0

274.3X7,098.3 1 63,715,094.3 9 18,042,860.6 7

282,379,592.4 5 313.960,110.2 8 12 . A s th e previou s tabl e shows , fo r 200 3 throug h 200 7 (and , a s show n b y th e SEC , als o i

n 2008) , th e valu e o f

th e Hedg e Fund s a s represente dt o investor s wa s significantl y overstated . Th e investmen t return s an dperformanc e a s represente dto investor s wer e base do

n th e overstate dnumber s an dthu s wer e als o false .Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/200 9 Pag e 6 o f 1 2

13 . Evidenc e als o showe dtha t th e Hedg e Fund s directl y o r indirectl y paid substantia l fee s to Scoo p Capital an dScoo p Management , an dto othe r Receivershi p Entities , i n th e for mo f management , advisory , and/o r profi t incentiv e fees . SE C Emerg . Mot . a t 5-6 . Accordin g to th e Hedg e Funds ' documents , i n 200 3 th e Hedg e Fund s pai datotal o f -S7,045,509.3 1 i

n fees ; i n 2004 , the y pai d$14,156,501.1 7 in fees ; i n 2005 , the y pai d $20,349,897.0 2 fees ; in 200 6 the y pai d$18,257,590.5 2 i n fees ; i

n 200 7 the y pai d $ 19,873,365.0 0 i

n fees ; an din 200 8 the y pai d$15,854,930.7 6 i n fees . 14 . Base don ou r

investigation , i

t i s likel y tha

t asignifican t

su mo f th e proceed s o f Nadel' s schem e mad e it s wa y int o othe r

account s controlle db y Nade l and/o r hi s wife . Marguerit e Nadel . Fo r

example , a s demonstrate db y th e copie s o f check s attache dheret o a s Exhibi t A , in 200 8 Nade l signe dcheck s transfemn g a t leas t $1,003,500.0 0 fro

mScoop Capita l t o himsel f

an dhi s wife . Further , i n 200 3 an

d200 4 I hav e alread y see n documentatio n showin g tha t a t leas t $685,000.0 0 wa s transfen-e dto Nade l an dhi s wif e (an d hav e reaso n t

o believ e that

significantl y mor e mone y wa s transferre dt o them) . I n short , i t i s apparen t fro mth e documentatio n tha t larg e quantitie s o f

mone y wer e diverte dfro mth e Hedg e Fund s t

o Nade l an dMrs . Nadel . Indeed , t o dat e w e hav e no t uncovere dan y sourc e o f incom e fo

r Nade l o r

hi s wif e tha t wa s no t in som e manne r

funde dwith mone y fro mth e scheme . 15 . Documentatio n an dothe r informatio n that

w e hav e collecte dshow s tha t mone y derive dfro

mth e schem e wa s use db y Nade l t o purchas e and/o r

fun dothe r businesses , includin g Venic e Je t

Center , LLC , an dTradewind , LLC .Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/2009 Pag e 7 o f 1 2

Venic e Je t

Center , LL C 16 . T o date , ou r

investigatio n ha s reveale dthat Venic e Je t

Center , LL C ("VJC"), i s aFlorid alimite dliability compan y forme di n Apri l 2006 . Se e VJ C filings wit h Florid a Secretar y o f

State , attache dheret o a s Exhibi t B . It s principa l addres s i s th e Office , an dNade l i s it s registere dagen t

andth e managin g member . 17 . Base do

n communication s wit

h counse l fo

r Mrs . Nade l an ddocumentatio n tha t w e hav e reviewed , i

t appear s tha

t Mrs . Nade l own s a50 % interes t i n VJC . However , th e informafio n w e hav e gathere dshow s tha t th e asset s o f

VJ C wer e purchase dwit h proceed s o f th e scheme , an dtha

t ove r tim e additiona l proceed s o f th e schem e hav e bee n transferre dto VJC . 18 . A s part

o f m y investigation , 1 and.'or m y attorney s hav e haddiscussion s wit h on e o f Nadel' s son s (Chri s Nadcl ) an dwit h Roge r Gemigans , Base don thos e discussions , w e hav e learne dthat

Mr . Gemigans i s responsibl e fo r VJC' s day-to-da y operation s an dtha t VJ C i s aviabl e busines s wit h potentia l t

o generat e asset s fo

r th e receivershi p estate , 19 . However , Nadel' s legal problem s hav e create ddifficultie s fo r VJ C t o acces s mone y fo r it s day-to-da y operation s an di t i s a t ris k o f goin g ou t

o f business . I believ e VJC' s busines s operation s woul dbenefi t fro mVJC' s inclusio n i

n thi s receivershi p andthat th e eventua l sal e o f

th e busines s coul dgenerat e asset s fo r eventua l distributio n t

o creditors . 20 . Accordin g t o documentatio n retrieve dfro mth e Office , on Augus t 8 , 2005 , Nade l entere dint o a

n .Asse t Purchas e Agreemen t

to purchas e afixedbas e operatio n know n a s "Tripl e Diamon dJe t

Center, " whic h operate di n th e Venic e Airport

in Venice , Florid a( a cop y o f th e Asse t Purchas e Agreemen t

i s attache dheret o a s Exhibi t C) .Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/2009 Pag e 8 o f 1 2

21 . Unde r

th e tenn s o f

th e Asse t

Purchas e Agreement , Nade l agree dt o pa y $2,795,000,00 , includin g $2,695,000.0 0 payabl e a t closing , andDoole y & Drake , P.A . wa s name da s th e escro w agen t an dth e locatio n fo

r closing . Se e Ex . C ^j^

i 1.4.1, , 1.8 . Further , th e Asse t Purchas e Agreemen t

contemplate dtha

t Nade l woul dassig n hi s interes t t o th e purchase dasset s (whic h wa s a100 % interest ) to a n LLC . Se e id . ^ | 4.1 . 22 . Th e documentatio n reveal s that VJ C wa s forme di

n Apri l 2006 , an di

n th e sam e mont

h th e Tripl e Diamon dJe t Cente r wa s purchase dwit

h atransfe r

o f mone y o n Jun e 8 , 2006 , fro

mScoo p Capital t

o Doole y & Drake , P.A. , fo r $2,793,587.12 . Th e ledge r fo r th e Scoo p Capital accoun t

fro mwhic h th e transfe r

occurre didentifie dth e purpos e o f th e transfer a s "Fo r VJ C Closing. " Thus , despit e th e possibl e co-ownershi p o f VJ C b y Nadc l an

dhi s wife , th e asset s hel db y VJ C wer e purchase dwit h mone y fromScoo p Capita l (an dthus , Nadel' s scheme) . 23 . Further , accordin g to document s locate din th e Office , sinc e th e formafion o f VJ C an dit s acquisitio n o f asset s a s discusse dabove , Scoo p Capita l ha s mad e a t leas t th e followin g transfer s o f

mone y to VJ C (i t

i s likel y tha

t significantl y mor e mone y wa s transfen'e dt o VJ C fro

mReceivershi p Entities , an dw e continu e to loo k

fo r evidenc e o f additiona l transfers) : Dat e 06/11/0 6 06/28/0 6 10/24/0 6 12/12/0 6 Paye e

VJ C VJ C VJ C VJ C TOTAL : Amoun t $100,00 0 100,00 0 75,00 0 50,00 0 $325,000.0 0Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/2009 Pag e 9 o f 1 2

Tradewind , LL C 24 . Th e informatio n tha t w e hav e reviewe dto dat e show s tha t Nade l wa s als o th e managin g membe r

o f anothe r limite dliability compan y name dTradewind , LL C ("Tradewind") . 'fradewin dwa s fornie di n Delawar e i

n Januar y 2004 , an dregistere dfo r th e first tim e i n Florid ai

n Marc h 2008 , Se e Tradewin dFiling s Wit h Florid aSecretary o f

State , attache dheret o a s Exhibi t D . Nade l i s Tradewind' s managin g membe r an dit s registere d agent , an dTradewind' s principal addres s i s th e Office . A s with VJC , i t appear s tha

t Mrs , Nade l ha s a

n interes t i n Tradewind . 25 . Base don m

y discussion s wit

h Receivershi p Entities ' personnel , Chri s Nadel , an da n individua l involve din Tradewind' s busines s affair s (Edwar dLoughlin ) an darevie w o f informatio n obtaine dfro mth e Office , 1 hav e learne dtha t Tradewin down s an dcontrol s a t leas t 5 aircraf t an down s airpor

t hangar s at

th e Newnan-Cowet aCount y Airport i n Georgia , 26 . My investigatio n ha s als o reveale dtha t Tradewin dwa s funde dwit h money fro mNadel' s scheme . Specifically , recen t financial statement s obtaine dfro mNadef s an

d Receivershi p Entities ' files sho w tha t Tradewind' s liabilitie s includ e loan s fromScoo p Capita l (i n th e amoun t

o f $2,490,146,77) , Scoo p Managemen t (i n th e amoun t

o f $80,000) , an dNade l an dhi s wif

e ($676,575.00) . Se e Tradewin dBalanc e Shee t a t 1 , attache dheret o a s Exhibi t E . Because , in al l likelihood , significan t sum s o f Receivershi p Entifies ' mone y were transferre dt o Nade l an dhi s wif e {see supr a^ 14) , eve n th e loa n fro mthe mlikel y consiste d o f Receivershi p Entities ' money . Even thoug h Mrs . Nade l ma y hav e a n interes t i n tli e company , 'fradewin dwa s overwhelmingly , i f no t completely , funde dwit h proceed s fro

m Nadel' s scheme .Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/200 9 Pag e 1 0 o f 1 2

27 . Fo r

example , th e Receivershi p Entities ' documentatio n show s tha t betwee n Januar y 200 4 an dDecembe r 2008 , a t aminimu mth e followin g transfer s o f mone y wer e mad e fro mScoo p Capita l directl y to Tradewin d o r fo r Tradewind' s benefit . Dat e 01/16/0 4 01./29/04 03/3 1 ,/0 5 02,/07/0 6 03/08/0 6 04/05/0 6 05/05/0 6 05/05/0 6 05/08/0 6 05/09/0 6 05/22/0 6 06/11/0 6 06/28/0 6 07/05/0 6 08/03/0 6 08/17/0 6 08/24/0 6 09/11/0 6 09/11/0 6 09/28/0 6 10/16/0 6 11/03/0 6 11/14/0 6 12/11/0 6 12/19/0 6 01/08/0 7 01/12/0 7 01/29/0 7 02/14/0 7 04/09/0 8 05/07/0 8 05/13/0 8 05/14/0 8 06/02/0 8 Paye e

Insure d Aircraf

t Title ' Unizan Ban

k Tradewin d Tradewin d Tradewin d Insure d Aircraf

t Title ' Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Amoun t $50,00 0 152,00 0 200,00 0 100,00 0 50,00 0 100,00 0 200,00 0 200,00 0 50,00 0 50,00 0 50,00 0 100,00 0 50,00 0 50,00 0 100,00 0 50,00 0 100,00 0 50,00 0 50,00 0 150,00 0 150,00 0 100,00 0 100,00 0 100,00 0 50,00 0 50,00 0 50,00 0 50,00 0 50,00 0 75,00 0 50,00 0 20,00 0 10,00 0 90,00 0

1 0Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/2009 Pag e 1 1 o f 1 2

07/07/0 8 08/14/0 8 08/25/0 8 09/02/0 8 09/30/0 8 10/03/0 8 10/13/0 8 10/25/0 8 ' 11/11/0 8 11/18/0 8 11/21/0 8 12/09/0 8 12/15/0 8 12/23/0 8 Tradewin d

Tradewin d Tradewin d 'Tradewin d Tradewin d Tradewin d 'Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d rOTAL : 100,00 0 80,00 0 20,00 0 60,00 0 20,00 0 20,00 0 20,00 0 20,00 0 25,00 0 5,00 0 30,00 0 6,00 0 30,00 0 13,00 0 $3,296,00 0 * These s transfer s wer e mad e i n connectio n wit

h th e purchas e o r

leas e o f on e or mor e aircraf t fo r Tradewind . 28 . Thos e document s als o reveal tha t th e followin g transfer s o f mone y wer e mad e fro ma n accoun t title di n th e nam e o f

Scoo p Managemen t

t o Tradewind : Dat e 02/17./04 03/01/0 4 05/27/0 4 09/19/0 5 10/25/0 5 04/17/0 6 Paye e 'Tradewin d 'Tradewin d Tradewin d Tradewin d Tradewin d Tradewin d 

### roiA L Amoun t 1,000.0 0 50,000.0 0 50,000.0 0 50,000,0 0 20,000.0 0 "50,000.0 0 $221,000.0 0 29 . Similarl y t o VJC , Tradewin dappear s to b e aviabl e busines s with potentia l t o generat e asset s fo

r th e receivershi p estate . However , Nadel' s legal problem s hav e create d operationa l difficultie s fo r 'Tradewind , an dI believ e Tradewind' s busines s operation s woul d benefi t fro mth e inclusio n of'Tradewin dint o thi s receivership .

1 1Cas e 8:09-cv-00087-RAL-TB M Documen t 1 6 File d 01/26/200 9 Pag e 1 2 o f 1 2

I declar e unde r

th e penalty o f

perjur y tha t th e foregoin g i s tru e an dcorrec t an di s execute dthi s 26th day o f January , 2009 . Burto n W . Wiand , a s Receive r

c/o FOWLE RWHIT E BOGG S P.A . 50 1 E . Kenned y Blvd . Suit e 170 0 Tampa , FL 3360 2 Tel . 813.228.741 1 Fa x 813.229.831 3 bwiand(^fowlerwhite.co m

# FOWLER © Cit y Exhibi t 3

Anomcy i a t

La w ESTJ94 3 

## "^^CtoTEBOGG

S

Burto n W, Wiand Direc t Dial : 813-222-202 9 Direc t Fax : 813-384-284 8 bwiaiid@fowlerwhite.co m Jun e 25 , 200 9 B Y U.S . MAI L & FACSIMIL E Rober t C . Anderso n Cit y Attorne y Hal l & Anderson , P.A . 131 4 Eas t Venic e Avenu e Suite E Venice , Florid a3428 5 Fax:(941)480-144 6 Re : Jun e 19 , 200 9 Meetin g R e Venic e Je t Center , LLC Dea r Bob : A s discusse din our

meetin g o n Friday , Jun e 19 , 2009, 1 a mforwardin g fo

r you r revie w th e secon dinteri mrepor t submitte dto th e Federa

l cour t i n connectio n wit

h th e Receivership . Th e repor

t detail s a s o f

Apri l 30 , 3009 , th e asset s hel di n th e receivershi p fiind . The y are o f

substantial valu e i n exces s o f $1 0 million . A s o f

today , w e hav e approximatel y $ 4 millio n i n cas h in bank

accounts . A s you ca

n see , th e Receiver

clearl y ha s th e financial abilit

y t o construc t

fou r box-hangar s on th e Je t

Center' s leasehold . T o reiterate , however , I hav e n o desire t o d o s o anda mcurrentl y acceptin g bid s fo r purchas e o f th e Company . A s w e discussed , I d o no t anticipate tha

t an y prospectiv e purchaser s o f th e Je t Center woul db e unabl e t o demonstrat e financial abilit y t o buil dth e hangars . Indeed , th e abilit

y t o construc t

th e hangar s i s amaterial concer n fo r all who mhav e shown an y interes t

in purchasin g th e Company . A s state ddurin g th e meeting , I remai n ope n to any suggestion s b y th e Cit y fo r amicabl y resolvin g thi s matter . However , a s Mr . Turner repeatedl y mad e i t

clea r tha t h e hadn o authorit

y t o negotiat e o n behal f

o f th e Cit y nor make an y actual proposal a s to ho w t o resolv e thi s matter , my hand s ar e significantl y tied . M y obligation s a s receiver requir e tha

t I attemp t

t o maximiz e th e valu e o f receivershi p asset s an dt o protec t th e asset s fromdepreciatin g i n value . I t i s my positio n tha

t th e Council' s refusa

l t o permi t th e construction , repeate ddelay tactics , an dnegativ e publi c comment s are causin g th e Jet FOWLE RWHIT E BOGG S P.A . TAMP A • FOR T MYER S • TALLAHASSE E • JACKSONVILL E • FOR T LAUDERDAL E 50 1 EAS T KENNED Y BLVD. , SUIT E 170 0 • TAMPA , FLORID A 3360 2 • P,0 , Bo x 143 8 • TAMPA , F L 3360 1 TELEPHON E (813 ) 228-741 1 • FA X (813 ) 229-831 3 • www.fowIerwhite.co mRober t C . Anderso n Jun e 25 , 200 9 Pag e 2 Center t o depreciat e in value . Th e Cit y ha s lef t m e littl e choic e bu t

to file th e Par

t 1 6 Complaint wit h th e FAA . Whil e thi s proceedin g wil l b e begu n i n th e immediate future , I a mno t waivin g m y right

to see k relie f in stat e o r

Federa l cour t fo r th e Council' s actions . I appreciate dour

conversatio n an dwoul dloo k forwar dt o any constructiv e proposa l t o resolv e ou

r impass e shoul dyo u or

Mr . Turner

ever hav e authorit

y t o do so . Sincerely ,

Burto n W . Wiand cc : Isaa c Turne r Enclosure

FOWLE RWHIT E BOGG S P.A .

TAMP A • FOR T MYER S • TALLAHASSE E • JACKSONVILL E • FOR T LAUDERDAL ECas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 1 o f 4 1

UNITE D STATE S DISTRIC T COUR T MIDDL E DISTRIC T O F FLORID A TAMP A DIVISIO N SECURITIE S AND EXCHANGE COMMISSION ,

Plaintiff , ARTHURNADEL , SCOO P CAPITAL , LLC , SCOO P MANAGEMENT , INC .

Defendants , SCOO P REA

L ESTATE , L.P . VALHALL

A INVESTMEN T PARTNERS , L.P. , VALHALL

A MANAGEMENT , INC . VICTORY IR

A FUND , LTD , VICTORY FUND , LTD , VIKIN G IR

A FUND , LLC , VIKIN G FUND , LLC , AND VIKIN G MANAGEMENT , Cas e No . 8:09-cv-0087-T-26TB M

Relie f Defendants . / TH E RECEIVER' S SECON D INTERI M REPOR T I . Introductio n Burto n W . Wiand , th e Court-appointe dReceive r for (a ) Defendant s Scoo p Capital , LL C ("Scoo p Capital" ) an dScoo p Management , Inc . ("Scoo p Management" ) (which , alon g wit h Arthu r Nadel , are collectivel y referre dt o a s "Defendants") ; (b ) Relie f Defendant s Scoo p Rea l Estate , L.P. ; Valhall aInvestmen t Partners , L.P. ; Victor

y IR A Fund , Ltd. ; Victor

y Fund , Ltd. ; Vikin g IR

A Fund , LLC ; an dVikin g Fun dLL C (collectivel y referre dt o a s th e "Hedg eCas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 2 o f 4 1

Funds"); ' (c ) Relie f

Defendant s Valhall aManagement , Inc . an dVikin g Management (which , alon g wit h Scoo p Capital andScoo p Management , ar e collectivel y referre dto a s th e "Investmen t

Managers") ; an

d(d ) Venic e Jet

Center , LLC ; Tradewind , LLC ; Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; Laure l Mountai n Preserv e Homeowner s Association , Inc. ; Marguerit e J . Nade l Revocabl e Trus t UA D 8/2/07 ; Guy-Nade l Foundation , Inc. ; Lim e Avenu e Enterprises , LLC ; andA Victorian Garde n Florist , LL C (al l o f th e foregoin g ar e collectivel y referre dt o a s th e "Receivershi p Entities") , hereb y files thi s Secon d Interi mRepor

t i n orde r to infor mth e Court , th e investors , an dother s intereste di n th e Receivershi p Entitie s o f

activitie s t o date , a s wel l a s th e propose dcours e o f action . Th e Receive r

wa s appointe don Januar

y 21 , 2009 . B y Januar

y 26 , 2009 , th e Receiver establishe da

n informational websit e www.nadelreceivership.com . Th e Receiver ha s update d thi s websit e periodicall y andcontinue s t o updat e i t wit h th e Receiver' s mos t

significan t action s to date ; importan t cour t filings i n thi s proceeding ; an dothe r new s tha t migh t b e o f interes t to th e public . Thi s Secon dInteri mReport , a s wel l a s al l previou s andsubsequen t reports , wil l b e poste don th e Receiver' s website . II . Procedura l Backgroun d O n o r abou t January 14 , 2009 , Arthu r Nade l ("Nadel") , th e Hedg e Funds ' principal investmen t

adviso r an dth e sol e office

r an ddirecto r

o f Scoo p Managemen t

andsol e Whil e thes e fiind s ar e referre dt o a s hedg e fund s i n thi s report , th e Receiver' s investigatio n ha s raise dseriou s question s a s to whether the y wer e ever

operate da s legitimat e investmen t vehicles . Thi s Secon dInteri mRepor t i s intende dt o repor

t o n informatio n an dactivity fro mMarc h 24 , 2009 , throug h May 15 , 2009 . Thus , unles s otherwis e indicated , th e informatio n reporte d herei n reflect s th e informatio n i n th e Receiver' s possessio n a s o f Ma y 15 , 2009 .Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 3 o f 4 1

managin g member

o f Scoo p Capital , fiedSarasot acounty anddisappeare dfo r nearl y tw o weeks . On Januar

y 21 , 2009 , th e Securitie s andExchang e Commissio n (th e "SEC " o r "Commission" ) filed acomplain t i n th e Unite dState s Distric t Cour t fo r th e Middl e Distric t o f Florid achargin g th e Defendant s wit h violation s o f

th e federa

l securitie s law s (th e "SE C Action") . Th e Commissio n allege s tha t Nade l use dth e Investmen t Manager s t o defrau d investor s i

n th e Hedg e Fund s fro

ma t leas t Januar y 200 8 forwar

dby "massively " overstatin g investment

return s an dth e valu e o f

fun dasset s to investor s i

n thes e fund s andissuin g fals e accoun t statement s t o investors . Th e Commissio n als o assert s tha t Nade l misappropriate d investo r fund s b y transferrin g $1.2 5 millio n fro mVikin g IR

A Fun dan dValhall aInvestment Partner s t o secre t

ban k accounts . Th e Cour

t foundth e Commissio n demonstrate daprim a faci e cas e tha

t Defendant s committe dmultipl e violation s o f federa l securitie s laws . Th e same da

y th e Commissio n filedit s complaint , th e Cour t entere da

n orde r appointin g Burto n W . Wianda s Receive r for th e Investmen t

Manager s an dRelie f Defendant s (th e "Orde r

Appointin g Receiver") . {Se e generall y Order

Appointin g Receiver (Doc . 8). ) Als o on that

sam e day , on th e SEC' s motion , th e Cour t entere d(i ) a

n Order o f Preliminar

y Injunctio n an dOther

Relie f a s t o th e Investmen t

Manager s andal l Relie f Defendant s (Doc . 7 ) an d(ii ) aTemporar y Restrainin g Orde r

an dOther

Emergenc y Relie f

a s t o Nade l (th e "TRO" ) (Doc . 9) . Amon g othe r things , thes e order s enjoine dth e Defendant s an dRelie f Defendant s fro

mfurthe r violation s o f

federa l securitie s law s an dfroze thei r assets . O n Februar

y 3 , 2009 , th e Cour

t entere da n Orde r o f Preliminary Injunctio n an dOthe r Relie fCas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 4 o f 4 1

a s t o Nade l (th e "Februar y 3 Preliminar

y Injunction" ) (Doc . 29) , th e term s o f whic h are essentiall y identica

l t o thos e o f

th e TRO.' ' On Januar y 27 , 2009 , on th e Receiver' s motion , th e Cour t entere da n orde r expandin g th e scop e o f

th e receivershi p andappointin g th e Receiver a s receive r

als o ove r th e Venic e Je t Center , LLC , an dTradewind , LLC . {Se e Order , Jan . 27 , 200 9 (Doc . 17). ) On Februar y II , 2009 , o n th e Receiver' s motion , th e Cour t entere da

n orde r expandin g th e scop e o f th e receivershi p an

dappointin g th e Receive r a s receive r

als o ove r

Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; th e Marguerit e J . Nade l Revocabl e Trus t UAD 8/2/07 ; an

dth e Laure l Mountai n Preserv e Homeowner s Association , Inc . {Se e Order , Feb . 11 , 200 9 (Doc . 44). ) O n Marc h 9 , 2009 , o n th e Receiver' s motion , th e Court entere da

n orde r expandin g th e scop e o f

th e receivershi p an dappointin g th e Receive r a s receive r

als o over th e Guy-Nade l Foundation , Inc . {Se e Order , Marc h 9 , 200 9 (Doc . 68). ) O n Marc h 17 , 2009 , o n th e Receiver' s motion , th e Cour t entere da

n orde r expandin g th e scop e o f

th e receivershi p an dappointin g th e Receive r a s receive r

als o ove r

Lim e Avenu e Enterprises , LLC , andA Victorian Garde n Florist . {Se e Amende dOrder , March 17 , 200 9 (Doc . 81). ) Pursuan t to th e Order

Appointin g Receiver , th e Receive r ha s th e dut

y an dauthorit

y to : "administe r

an dmanag e th e busines s affairs , funds , assets , chose s i n actio n an

dany other property o f

th e Defendant s an dRelie f Defendants ; marshal an dsafeguardal l o f th e asset s o f

• * Bot h th e TR O an dth e Februar y 3 Preliminary Injunctio n require dNade l t o mak e aswor n accountin g t o th e Court

an dth e Commissio n o f

al l fund s receive db y hi mfro many o f th e Defendant s o r

Relie f Defendant s an daswor

n identificatio n o f

al l account s i

n whic h h e ha s a n interes t o r ha s th e powe r

o r righ t t o exercis e control . (Docs . 9 , 29. ) I n respons e t o thes e Orders , o n Marc h 31 , 2009 , Nade l submitte daletter assertin g hi s Fift

h Amendmen t

right agains t self-incriminatio n an drefuse dt o provid e thi s information . (Doc . 102. )Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 5 o f 4 1

th e Defendant s an dRelie f Defendants ; andtak e whateve r action s are necessar

y fo r th e protectio n o f

th e investors. " (Orde r

Appointin g Receive r

a t 1-2. ) On Januar y 27 , 2009 , Nade l surrendere dt o th e FB I i n Tampa , Florida . Nade l wa s arreste dandcharge dwit h tw o count s o f

securitie s fraudandwire fraudbase do n th e fraudulent investment

schem e discusse dbelow . O n Januar y 30 , 2009 , Magistrat e Judg e Mar k Pizz o o f th e Unite dState s Distric t Cour t fo r th e Middl e Distric t

o f Florid adenie d Nadel' s reques t

fo r areleas e on bon dawaitin g trial , decidin g insteadtha t Nade l shoul d remai n i n jai l base don , amon g othe r things , aris k

o f flight. On o r

abou t Februar y 2 , 2009 , Judg e Pizz o entere daDetentio n Order denyin g bai l andaRemova l Orde r requirin g tha

t Nade l b e transferre dt o th e Metropolitan Correctiona l Cente r i n Ne w York , Ne w Yor

k to awai t trial . Se e U.S . v . Nadel , (U.S . Dist . Ct . M.D . Fla. , Cas e No . 8:09-mj-01039-MA P (Docs . 5 , 6)) . O n Februar

y 26 , 2009 , Judg e Denis e Cote o f th e Unite dState s Distric t Cour t fo r th e Souther n Distric t o f Ne w Yor

k agree dt o releas e Nade l on $ 5 millio n bail , contingen t o n a number o f condition s includin g $ 1 millio n i n cash , livin g restrictions , an dspecifi c bond guarantees . Judg e Cote als o require dNade l to full y an dcompletel y cooperat e wit h th e SEC . A s o f th e date o f

thi s Report , Nade l ha s no t me t th e condifion s fo

r bai l an di s stil l bein g hel d in th e Metropolitan Correctiona l Center . O n Apri l 28 , 2009 , Nade l wa s indicte don si x count s o f securitie s fraud , on e coun t o f mai l fraud , an deigh t

count s o f

wir e fraud . Th e maximu msentenc e fo r eac h charg e i s 20 year s o f imprisonment . O n Apri l 30 , 2009 , Nade l pleade dno t guilt y to th e fifteen charges .Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 6 o f 4 1

I n th e SEC Action , on Apri l 6 , 2009 , Nade l filedhi s answer andaffirmativ e defenses , i n whic h h e denie dnearl y ever y allegatio n i

n th e Complain t

an dset fort h tw o affirmativ e defenses . (Doc . 104. ) Nade l als o purporte dt o set fort h a"Counterclaim, " whic h th e Cour t struc k on th e Receiver' s motion . (Docs . Ill , 112. ) III . Th e Receiver' s Role an dResponsibilitie s Th e Receive r

function s a s a

n independen t

agent o f th e court . Th e Unite dState s Supreme Cour

t ha s explaine dthat : [ areceiver ] .. . i s a

n office r o f th e court ; hi s appointmen t i s provisional . H

e i s appointe don behal f

o f al l parties , an dno t

o f th e complainan t

o r o f th e defendan t

only . H e i s appointe dfo

r th e benefit

o f al l partie s wh o ma

y establis h right s i

n th e cause . Th e mone y i

n hi s han di s in custodi alegi s fo r whoeve r ca n make out atitl e t o it . . . I

t i s th e cour

t itsel f whic h ha s th e car e o f th e propert

y i n dispute . Th e receive r

i s but th e creatur e o f th e court ; he ha s n o powe r excep t suc h a s ar

e conferre dupo n himby th e orde r

o f hi s appointmen t

an dth e cours e an d practic e o f

th e court . Boot h V . Clark , 5 8 U.S . 322 , 33 1 (1854) . Generally , th e Receive r i s charge db y th e Cour

t wit h maximizin g investors ' andcreditors ' recoveries . T o thi s end , th e Cour t directe dth e Receiver to engag e i

n th e followin g activities : A . Operatin g th e Busines s o f th e Receivershi p Entities . Th e Cour t grante dth e Receive r

th e "ful l andexclusiv e power , duty , an dauthority " to "administe r

an dmanag e th e busines s affairs , funds , assets , chose s i n actio n an dany other property o f

th e Defendant s an dRelie f Defendant s .... " (Orde r Appointin g Receive r

a t 1.) B . Takin g Possessio n o f Receivershi p Property . Th e Cour t directe dth e Receive r

t o "[t]ak e immediat e possessio n o f al l property , asset s an destate s o f

ever y kindo f th e Defendant s an dRelie f Defendants , whatsoeve r

an dCas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 7 o f 4 1

wheresoever , located , belongin g t o o r i n th e possessio n o f

th e Defendant s andRelie f Defendant s . . .. " (Orde r

Appointin g Receive r

^ 1.) C . Investigatin g Receivershi p Affair s an dRecoverin g Funds . Th e Cour t als o directe dth e Receive r t o "[ijnvestigat e th e manner i n whic h th e affair s o f th e Defendant s an dRelie f Defendant s wer e conducte dan dinstitute suc h action s an dlega l proceedings , fo

r th e benefi t

an don behal f

o f th e Defendant s andRelie f Defendant s an dthei r investor s andother

creditor s a s th e Receive r deem s necessar

y agains t thos e individuals , corporations , partnerships , association s and/o r unincorporate dorganizations , whic h th e Receive r ma y clai mhav e wrongfully , illegall y o r otherwis e improperl y misappropriate dor transferre dmonie s o r

othe r proceed s directl y o r

indirectl y traceabl e fro

minvestor s i

n th e Defendant s o r

Relie f Defendant s .... " (Orde r Appointin g Receiver ^ 2. ) D . Reportin g o n Asset s an dLiabilitie s an dImplementin g Claim s Process . Th e Cour t furthe r directe dth e Receive r

t o "[pjresen t

t o thi s Cour

t arepor t reflectin g th e existenc e andvalu e o f th e asset s o f

th e Defendant s andRelie f Defendant s an do f

th e exten t o f liabiHties , bot

h thos e claime dt o exis t

by other s andthos e th e Receive r believe s t

o b e lega l obligation s o f

th e Defendant s an dRelie f Defendants. " (Orde r

Appointin g Receiver ^ 3. ) A s contemplate dby th e Order , th e Receive r wil l ultimatel y institut e aclaim s proces s primaril y fo

r th e benefi t

o f th e Receivershi p Entities ' investor s wh o hav e bee n defraude dan d suffere dlegitimat e losse s a s aresul t o f th e activitie s o f

Nade l an dothers . IV . Overvie w o f

Preliminar y Finding s Th e Receive r

i s i n th e proces s o f

reviewin g voluminou s record s fro mth e office s o f Receivershi p Entities , a s wel l a s record s frommore tha n thirty (30 ) different

institutions .Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 8 o f 4 1

includin g bank s andbrokerag e firms. Th e Receive r als o i s i n th e proces s o f

obtainin g document s fro

madditional thirdparties . Th e Receiver ha s forme dsome preliminar y conclusion s base don hi s revie w o f aportio n o f

th e record s received . Whil e thes e conclusion s are no t

final, andma

y chang e a s th e revie w become s mor e complete , th e Receiver believe s the y shoul db e share dwit h th e Court , th e investors , an dother potentiall y intereste dparties . I n th e Commission' s Emergenc y Motio n an dMemorandu mo f La w i n Suppor t o f Temporar y Restrainin g Order

andOthe r

Emergenc y Relie f

("SEC' s Emergenc y Motion" ) (Doc . 2 ) an dsupportin g papers , th e Commissio n presente devidenc e showin g Nade l defraude dinvestor s throug h hi s contro l o f th e Hedg e Funds ' adviser s and/o r managers . Scoo p Capital an dScoo p Management . Throug h th e Investmen t Managers , Nadel , alon g wit h Christophe r

Mood y andNei l Moody , wer e ultimatel y responsibl e fo r controllin g th e Hedg e Funds ' investmen t activities . Whil e th e Commission' s evidenc e showe dtha t Nade l defraude dinvestor s sinc e a t leas t Januar y 2008 , th e Receiver' s investigatio n ha s uncovere d evidenc e showin g that

th e frau dbega n a t leas t a s earl y a s 200 3 andi

n al l likelihoo dbefor

e then . Th e Receiver' s investigatio n ha s reveale dtha t fo r eac h Hedg e Fund , th e Hedg e Fund' s performanc e a s disclose dt o investor s fro ma t leas t 200 3 forwar

dwa s base dmainl y on tradin g result s tha

t Nade l purporte dt o hav e i n brokerag e transaction s cleare dthroug h Goldman Sach s Group , Inc . (i n whic h mone y wa s purportedl y trade dt o generat e th e purporte dreturn s Nade l wa s paying) . Th e return s reporte dt o investor s an dpotential investor s wer e base do n fictitious performanc e result s that were create dby Nade l an dthe nCas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 9 o f 4 1

include di

n adatabas e maintaine db y Scoo p Management . Thes e fictitious performanc e result s formedth e basi s o f gros s misrepresentation s t o investors . Tabl e 1 , below , show s acompariso n o f actual tradin g result s i

n th e Hedg e Funds ' Goldma n Sach s account s to th e value s represente dto investor s andt o distribution s paid . Specifically , fo

r eac h yea

r fro m200 3 t o 2008 , th e tabl e list s from , lef t t o right , (1 ) th e pertinen t year ; (2 ) th e amoun t

o f gain s th e Investmen t

Manager s represente dthat th e Hedg e Fund s ha dachieve dtha

t yea r (identifie da s "Compan y Represente dAmounts") ; (3 ) th e actual combine dtotal gai n o r

los s experience dtha

t yea r i n th e account s fo

r th e Hedg e Fund s (identifie da s "Hedg e Funds") ; (4 ) th e differenc e betwee n wha t th e Investmen t

Manager s represente dth e Hedg e Fund s ha dachieve di

n performanc e versu s th e actua l tradin g result s i

n th e Goldma

n Sach s account s fo

r th e Hedg e Fund s (identifie da s "Difference") ; an d(5 ) th e actual distribution s pai dby th e Hedg e Fund s fo r th e pertinen t

year , includin g distribution s to investor s andmanagemen t an dperformanc e incentiv e fee s pai d(identifie da s "Distributions") . Tabl e 1

Yea r 200 3 200 4 200 5 200 6 200 7 200 8 Tota l Compan y

Represente d Amount s 23,716,74 9 46,950,34 5 61,169,05 8 50,003,77 8 54,665,57 1 36,334,79 4 272,840,29 5 Gains/(Losses )

Hedg e Fund s Actual Amount s (Pe r Goldman Sach s statements ) 17,237,00 8 4,637,87 8 5,739,30 1 (18,549,355 ) (24,989,307 ) (2,493,654 ) (18,418,129 ) Differenc e

6,479,74 1 42,312,46 7 55,429,75 6 68,553,13 3 79,654,87 9 38,828,44 8 291,258,42 4 Distribution s

16,729,14 7 49,329,38 7 75,078,84 0 75,444,12 2 60,034,32 1 73,443,31 0 350,059,12 7Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 1 0 o f 4 1

A s Tabl e 1 shows , fo

r 200 3 throug h 2008 , th e Hedg e Funds ' performanc e a s represente dt o investor s wa s significantl y overstate dandthus , false . For instance , fo

r th e year s 200 3 t o 2008 , th e Investmen t Manager s represente dtha t th e Hedg e Funds ' tradin g activit y generate dmore tha

n $27 2 millio n i

n gain s when , i

n reality , th e Hedg e Funds ' investment

account s actuall y los t

approximatel y $18. 4 million . Further , whil e th e Hedg e Fund s los t

approximatel y $18. 4 millio n fo r thi s same period , more tha n $35 0 millio n wa s pai db y th e Investmen t

Manager s i

n distribution s t o investor s andt o themselve s andother s a s fees . A s thi s tabl e shows , fro ma t leas t 200 3 throug h 2008 , th e Investmen t Manager s were makin g distribution s andpayin g fee s tha t th e investmen t

performanc e o f

th e Hedg e Fund s neve r supported . Th e Investment Manager s were als o creditin g fictitious profit s t o account s where th e accountholder s were no t takin g distributions . Thes e fictitious profit s were likewis e unsupporte db

y th e Hedg e Funds ' investmen t performanc e an donl y serve dt o furthe r increas e th e Hedg e Funds ' insolvency . Thi s negativ e cas h flow mad e th e eventual collaps e o f

Nadel' s enterpris e inevitable . I n short , th e investmen t

return s an dperformanc e a s represente dt o investor s were base don grossl y overstate dperformanc e number s create dby Nadel , an dth e result s reporte d to investor s wer e fiction. Th e tru e result s o f th e tradin g activity that

actuall y occurre dwa s never include din dat areporte dt o investor s o r potentia l investors . Evidenc e als o show s tha

t th e Hedg e Fund s directl y o r indirectl y pai dsubstantial fee s to Scoo p Capita l an dScoo p Management , t o othe r Receivershi p Entities , an dt o othe r third partie s i n th e for mo f management , advisory , and/o r profi t incentiv e fee s an d"finder " fees . A s reflecte din Tabl e 2 , below , accordin g t o th e Hedg e Funds ' document s fro m200 3 throug hCas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 1 1 o f 4 1

2008 , the y pai dapproximatel y $97,168,12 2 i n total fees . Profi t

incentiv e fee s wer

e pai dt o Scoo p Management , Vikin g Managemen t andValhall aManagemen t (an dsometime s spli t wit h thirdparties ) base don apercentag e o f profit s tha

t neve r occurre dandthu s significantl y deplete dth e Hedg e Funds ' asset s an ddiverte dthos e asset s t o Scoo p Capita l andScoo p Management , whic h were controlle dby Nadel , an dto Valhall aManagement an dVikin g Management , whic h were controlle dby Nei l an dChristophe r

Moody . Tabl e 2 Yea r 200 3 200 4 200 5 200 6 200 7 200 8 Tota l Managemen t

Fee s 1,521,37 7 3,644,18 8 5,057,63 3 5,756,64 6 6,206,97 2 6,771,23 2 28,958,04 8 Performanc e

Incentiv e Fee s 5,929,18 7 11,737,58 6 15,292,26 4 12,500,94 5 13,666,39 3 9,083,69 8 68,210,07 4 Tota l Fee s

7,450,56 5 15,381,77 4 20,349,89 7 18,257,59 0 19,873,36 5 15,854,93 1 97,168,12 2 Significant

sum s fro mth e proceed s o f

Nadel' s schem e als o made thei r wa y into othe r account s controlle db y Nade l and/o r hi s wife . Marguerit e Nadel . A s o f December

31 , 2008 , accordin g t o th e balanc e shee t fo r Scoo p Management , Scoo p Managemen t ha dtransferre d approximatel y $17,177,896.5 6 t o account s owne deithe r individuall y or

jointl y b

y th e Nadels . Thes e amount s are i n additio n to th e amount s Mrs . Nade l receive dfro mScoo p Managemen t

a s compensation . Accordin g t o it s balanc e sheet . Scoo p Managemen t als o transferre dapproximatel y $6,433,804.4 0 t o othe r entitie s controlle db y Nadel . T o date , th e Receive r ha s no t uncovere dany sourc e o f income fo

r Nade l o r hi s wif e (durin g th e tim e o f Nadel' s scheme ) that

was no t i n som e manne r

funde dwit

h mone y fro

mthat scheme .

I ICas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 1 2 o f 4 1

Documentatio n andothe r informatio n tha

t th e Receiver

ha s collecte dshow s tha t money derive dfro

mth e schem e wa s use dby Nade l t o purchas e and/o r fun dother businesses . Th e Receiver

ha s expande dth e Receivershi p to includ e additional businesse s controlle db y Nadel . Se e discussio n o f

expansio n a

t Sectio n V.B . below . T o date , th e Receive r

ha s discovere dandidentifie dapproximatel y 37 1 investor s wh o investe dslightl y more than $39 7 million . Base don documentatio n analyze dt o date , i t appear s tha

t investor s hav e ou t

o f pocke t losse s o f

approximatel y $16 8 million . Th e Receiver ha s als o discovere dtha

t some investor s wer e pai dmore tha n thei r total investments . Thes e overpayment s wer e "fictitiou s profits. " A t thi s time , th e Receiver

ha s discovere d approximatel y $53. 5 millio n i n suc h fictitious profits . Further , i t appear s that , althoug h separatel y numbere dinvesto r account s wer e use di

n communication s wit

h investor s an

d brokerag e account s were use dfo r eac h Hedg e Fund , i

n realit y ther e wer e no t

separate funds . Du e to th e metho dNade l use dto trad e securities , distinction s mad e betwee n th e individual Hedg e Fund s an dbetwee n investo r "accounts " hav e littl e meaning . Th e document s reviewe d reveal tha t Nade l treate dth e Hedg e Fund s a s asingl e sourc e o f mone y regardles s o f

wit h whic h Hedg e Fun dinvestor s purportedl y invested . Th e Receive r ha s reache dth e preliminar y conclusio n base do n availabl e researc h andevidenc e that investo r fund s were commingle di n Nadel' s an dth e Receivershi p Entities ' accounts .

1 2Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 1 3 o f 4 1

A . Nadel' s Tradin g Activitie s i n th e Hedg e Funds . I n th e Executiv e Summarie s disseminate dt o investors , Nade l represente dtha t th e Hedg e Fund s wer

e generatin g th e annual return s reflecte di n Tabl e 3 , below , primaril y throug h tradin g i

n th e quadrupl e Qs." * Tabl e 3 Fun dPerformanc e a s Represente din Executiv e Summarie s Scoo p Vikin g Victor

y Rea

l Yea r Valhall aVictor y Vikin g IR

A IR

A Estate 200 2 200 3 200 4 200 5 200 6 200 7 2008 * * Result s ar e fo

r a n incomplet e year . Whil e Nade l di dtrad e i

n quadruple-Qs , he di dno t achiev e fo

r th e Hedg e Fund s th e amoun t o f retum s h e represente dt o investors . Rather , base don th e document s th e Receiver' s financial expert ha s analyze dt o date , th e Hedg e Fund s a s awhol e los t significant sum s fro mthei r inception . Specifically , Tabl e 4 , below , show s th e actual accoun t profit s and losse s fo r th e Hedg e Fund s fo

r th e indicate dtime . 21.59 % 41.57 % 28.96 % 30.19 % 19.99 % 19.24 % 10.97 % 40.93 %

42.52 % 30.30 % 25.90 % 18.94 % 19.65 % 11.82 % 26.98 %

46.42 % 30.46 % 27.40 % 19.08 % 20.60 % 11.43 % 26.88 %

45.23 % 29.93 % 26.36 % 18.93 % 20.55 % 11.52 % N/

A 30.43 % 32.16 % 27.31 % 19.50 % 20.02 % 11.72 % N/

A N/ A 48.67 % 32.14 % 21.15 % 21.75 % 12.31 %

" Th e ter m"Quadrupl e Qs " (ticke r symbol : QQQQ ) refer s t o th e NASDAQ-10 0 Trackin g Stock , a n exchange-trade dfun

d("ETF" ) liste do n th e NASDA Q intende dt o trac k th e NASDA Q index .

1 3Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 1 4 o f 4 1

Tabl e 4 Accoun t Nam e Scoo p Rea

l Estate Ltd . 2/1/04-12/31/0 8 Valhall aInvestment

Partners , L

P 10/01/02-12/31/0 8 Vikin g FundLLC 3/01/03-12/31/0 8 Vikin g IR A FundLtd . 3/01/03-12/31/0 8 Victor y Fund , Ltd . 6/01/02-12/31/0 8 Victor y Fund , Ltd . 2/01/03-8/31/0 3 Victor y IR A Fund , Ltd . Hedg e Fun dTota l Accoun t Profit/Losse s ($6,637,880 ) $2,863,87 5 ($8,073,752 ) ($2,053,443 ) $1,825,70 1 ($66,776 ) ($5,941,164 ) ($18,083,439 ) Overal l Annualize d

Rat e o f Retur n -33.35 % 3.98 % -19.40 % -24.53 % -16.70 % -18.45 % -18.63 % Between 200 2 an d2008 , th e highes t annualize drate o f

return Nade l appear s t o hav e achieve dwa s approximatel y 4% , whil e th e res t o f th e Hedg e Fund s experience dannualize d retum s of-16.70 % t o -33.25% . Whil e thes e actual performanc e number s demonstrat e th e disparity betwee n what

Nade l andother s were claimin g th e Hedg e Fund s were achievin g an d th e retum s th e Hedg e Fund s wer e actuall y achieving , th e performanc e o f eac h individua

l Hedg e Fundi s no t

significan t

becaus e i

t appear s that

Nade l arbitraril y allocate ddail y result s o f tradin g transaction s amon g th e Hedg e Funds . Thi s activit y resulte di

n th e comminglin g o f th e Hedg e Funds ' asset s an dmake s th e performanc e result s o f eac h individual Hedg e Fun d immaterial . I

n short , Nade l wa s losin g significan t sum s o f mone y whil e representin g tha t he wa s achievin g annual retum s from18.93 % t o 48.67 % (for year s wit h ful l activity) . Further , a s show n in Tabl e 5 , below , whil e th e Hedg e Funds ' account s experience d losses , al l but

on e o f Nadel' s persona l account s an dothe r account s maintaine dessentiall y fo r

1 4Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 1 5 o f 4 1

th e benefit

o f Nade l andi

n th e sol e contro l o f

Nade l (collectivel y referre dt o herei n a s "Nadel' s Accounts" ) experience dsignificant gains . Tabl e 5 Accoun t Nam e Scoo p Capital LL

C 12/01/04-12/31/0 8 Scoo p Managemen t 10/01/02-12/31/0 8 Arthur Nade l 6/01/02-10/31/0 8 Marguerite Nade l 8/01/07-1/30/0 9 Non-Fun dTota l Accoun t Profit/Losse s $11,331,46 4 $737,14 1 $10,781,02 9 $10,03 3 $22,859,66 7 Overal l Annualize d

Rat e o f Retur n 49.37 % 36.72 % 71.62 % -15.49 %

Th e tradin g activit

y i n th e Hedg e Funds ' account s andNadel' s Account s appear s to hav e been essentiall y th e same , an dtradin g i n thos e account s wa s don e concurrently . Virtuall y al l tradin g allocate dt o ever y accoun t wa s i n quadmple-Qs . Give n th e dramati c difference s i

n tradin g result s i

n Nadel' s account s a s compare dt o th e Hedg e Funds ' account s an dpreliminar

y informatio n receive db y th e Receiver

concernin g Nadel' s tradin g practices , th e Receiver

believe s that

thi s evidenc e ma

y indicate tha

t Nade l engage di

n afraudulent practic e know n a s "cherr

y picking. " I

n cherry picking , th e trade r allocate s profitabl e trade s t o himsel f andunprofitabl e trade s to clients . See , e.g. , S.E.C . v . K . W . Brow n an dCo. , 55 5 F . Supp . 2 d1275 , 1302-130 7 (S.D . Fla . 2007 ) (holdin g that "cherry-picking " day-tradin g schem e operate dby officer s constitute dschem e to defrau dunder Securitie s Exchang e Act) . Analysi s o f

th e tradin g activity an dcas h flows i s ongoing . However , i n light o f th e fact tha t Nade l trade dth e same investment s fo r al l Hedg e Fund s an dth e account s h e owne dand/o r controlle dfo

r hi s benefi t

an dthat ther e wa s awid e disparity betwee n th e result s allocate dto

1 5Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 1 6 o f 4 1

th e Hedg e Funds ' account s andthos e allocate dt o Nadel' s Accounts , ther e i s n o apparen t logica l explanatio n other

tha n th e improper

diversio n o f

profitabl e transaction s by Nadel . B . Fund s Locate db y th e Receiver . 1 . Fund s a t

Inceptio n o f

Receivership . A t th e outse t

o f th e Receivership , approximatel y $556,758.3 3 i n cas h andcas h equivalent s i

n financial account s title di n th e name o f

th e Hedg e Fund s an dInvestment Manager s (whic h includ e Scoo p Management , Scoo p Capital , Valhall aManagement , an d Victor y Management ) ha

dbeen identifie dan dfroze n pursuan t

to th e Court' s TR O an d Preliminar

y Injunctio n Orders . I

n addition , cas h an dcas h equivalent s i n financial account s title di n th e name o f

othe r Receivershi p Entitie s a t th e tim e th e entitie s wer e brough t int o receivershi p were approximatel y $556,654.72 . Thus , total cas h andcas h equivalent s a t th e inceptio n o f

th e Receivershi p an da s th e Receivershi p wa s expande dto includ e each additional Receivershi p Entit y indicate dwa s approximatel y $1,113,413.05. * 2 . Additiona l Fund s Located . On e o f th e Receiver' s highes t

prioritie s i s t o locate an drecove r an y additional funds . Th e Receiver

ha s retaine daforensi c accountin g firmt o assis t i n tracin g funds . A s o f

th e dat e

^ Thes e othe r

Receivershi p Entitie s includ e Venic e Je t Center , LLC ; Tradewind , LLC ; Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; an dth e Marguerit e J . Nade l Revocabl e Trus t UA D 8/2/2007 . Thi s amoun t

doe s no t includ e an y su mfo

r non-cas h o r

non-cas h equivalen t

asset s th e Receive r ha s recovered . Fo r

adiscussio n o f

thes e assets , pleas e refer t o Section s V.B . & V.D . below .

1 6Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 1 7 o f 4 1

o f thi s report , th e Receiver

ha s als o identifie dan drecovere d$120,000 . Also , on Apri l 29 , 2009 , th e Cour

t grante dth e Receive r

exclusiv e interes t

i n anote an dmortgag e fo r a condominiu mlocate di

n Sarasota , Florida . Th e condominium' s owner , a n employe e o f

on e o f th e Receivershi p Entitie s (se e Sectio n V.B.6 , below) , ha dexecute dapromissor

y note payabl e t o Mrs . Nade l fo

r $126,556.24 . Th e note wa s secure dby amortgag e hel dby Mrs . Nadel . On Februar

y 9 , 2009 , Mrs . Nade l ha dassigne dth e not e an dmortgag e t o Nadel' s criminal-defens e attomeys , Cohen , Jayso n & Foster , P.A . Th e principal balanc e du e under th e not e i s $124,637.64 , wit h $5,457.6 6 du e i

n outstandin g interest . Th e Receiver

wil l continu e t o diligentl y investigate , andwil l update th e Cour t andth e investor s i

f additional fund s ar

e located . 3 . Busines s an dMiscellaneou s Incom e an dInterest . Fro mMarch 1 , 200 9 throug h Apri l 30 , 2009 , th e Receiver receive d$579,205.4 3 i

n busines s income fro

mongoin g operation s o f some Receivershi p Entities , $18,056.5 3 i n interest/dividen dincome , an d$2,582.1 8 i n miscellaneou s income . 4 . Profitee r

Settlements . I n Apri l 2009 , th e Receive r sen t letter s t o 8 5 investors , eac h o f whom , accordin g t o th e record s i

n th e Receiver' s possession , mad e "fictitiou s profits " b y receivin g monie s fro m th e Hedg e Fund s i

n a n amoun t that exceede dhi s o r

he r investment s (th e "Profiteers") . Wit h th e SEC' s approval , th e Receive r offere dt o settl e wit

h eac h suc h investo r

fo r paymen t b y th e

' Thi s amoun t

i s comprise do f

tw o $60,00 0 payment s th e Receive r recovere dfro

mtw o individuals . Th e Receive r determine dthat

th e transfer s mad e t o thes e individual s i n th e amoun t o f $60,00 0 eac h wer

e a n imprope r

diversio n o f

investo r fund s an dobtaine dcour t order s t o recove r

thes e funds .

1 7Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 1 8 o f 4 1

Q investo r o f 90 % o f hi s o r her fictitious profits . Collectively , i f accepted , thes e settlement s woul dyiel d$14,586,005.14 . A s o f Ma y 15 , 2009 , th e Cour

t ha s approve dfive profiteer settlement s totalin g $683,778.64 . Settlemen t discussion s wit

h other profiteer s are ongoing . Th e Receiver

continue s t o wor

k to identif

y additional profiteer s an dintend s to send settlemen t offer s to additional profiteer s i n th e nea r future . V . Action s Take n B y th e Receiver . Sinc e hi s appointmen t

o n Januar y 21 , 2009 , th e Receive r

ha s take n anumbe r

o f step s t o fulfil l hi s mandate s under

th e Orde r Appointin g Receiver . A . Takin g possessio n o f Receivershi p Property . 1 . Physica l premise s an dtangibl e assets . On th e da

y o f hi s appointment , th e Receive r too k possessio n o f

th e Receivershi p Entities ' office s a

t 161 8 Mai n Street , Sarasota , F L 3423 6 (th e "Office") . Th e Offic e wa s use db y Nade l a s th e headquarter s fo r administerin g hi s contro l o f th e Receivershi p Entities . Th e Receive r

secure dth e premise s by changin g th e lock s an dinventorie dal l o f th e physical property a

t th e premises . Th e Receive r ha s provide dchang e o f

addres s notification s t o th e Unite dState s Posta

l Servic e an dFederal Express , a s wel l a s al l know n servic e provider s t o th e Receivershi p Entities . Sinc e th e filing o f

th e las t Interi mReport , th e Receive r ende dth e Office' s lease ; tume dove r

th e keys ; an dsol dth e offic e furniture an dothe r item s fo r $3,500.00 . Al l o f

th e document s fro

mth e Offic e hav e bee n move dt o th e Tamp aoffice s o f Fowler White Bogg s P.A . Th e Receive r

als o remove dseveral server s an dcomputer-relate dequipmen t fromth e * Se e Sectio n V.D. I below , regardin g litigatio n agains t profiteers .

1 8Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 1 9 o f 4 1

premise s tha

t wer e use db y th e Receivershi p Entitie s an dMr . Nadel . Th e Receiver retaine d experience dforensi c informatio n technolog y expert s wit h th e firmE-Hounds , Inc. , to assis t i n securin g an danalyzin g th e electroni c dat ao n th e computers . E-Hound s personne l hav e secure dth e dat aan dar

e underwa y i n thei r forensi c analysis . Sinc e obtainin g contro l o f th e Receivershi p Enthies , th e Receive r an dhi s professional s hav e ha

ddiscussion s - includin g continuin g discussion s - wit h anumber

o f peopl e associate dwit

h Nade l and/o r

th e Receivershi p Entities , includin g officer s o f some o f th e Receivershi p Entitie s andperson s responsibl e fo r maintainin g th e financial book s o f Receivershi p Entities , fo

r operatin g th e busines s o f Receivershi p Entities , fo r performin g accountin g services , andfo r administerin g th e Hedg e Funds . Th e Receiver

andhi s professional s hav e als o reviewe ddocument s locate di n th e Office ; document s obtaine dfro mth e accountan t

fo r on e o r mor e Receivershi p Entities ; informatio n store don th e Receivershi p Entities ' compute r network ; document s obtaine d fro mothe r businesse s controlle dby Nadel ; document s obtaine dfro mfinancial institution s an dothe r thirdparties , includin g lawyer s an dother s wh o assiste dNadel' s businesse s wit h thei r transactions ; andinformatio n availabl e in th e publi c record . B . Expansio n o f

th e Receivership . A s aresul t

o f th e revie w o f

thes e record s an do f

th e discussion s note dabove , th e Receive r sough t an dsuccessfull y obtaine dth e expansio n o f th e Receivershi p t o include : Venic e Je t

Center , LLC ; Tradewind , LLC ; Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; Laure l Mountai n Preserv e Homeowner s Association , Inc. ; th e Marguerit e J . Nade l Revocabl e Tms t

UA D 8/2/07 ; th e Guy-Nade l Foundation , Inc. ; Lime Avenu e Enterprises ,

1 9Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 2 0 o f 4 1

LLC ; andA Victoria

n Garde n Florist , LLC . Th e Receiver' s investigatio n reveale dtha t Nade l ha dcontro l and/o r

aful l or partial interes t

i n thes e additional businesse s an dtha t the y wer e purchase dand/o r

fundedwit

h money derive dfro

mNadel' s fraudulent

investmen t scheme . Further , b

y virtu e o f

Scoo p Capital' s ownershi p interes t i n Hom e Front Homes , LL C andSummer

Plac e Development

Corporatio n th e Receive r als o ha s contro l o f

thes e entitie s but , fo

r variou s reasons , aforma

l orde r expandin g th e Receivershi p to includ e Hom e Front Home s o r

Summer Plac e Developmen t

ha s no t been sought . Th e followin g discussio n o f thes e entitie s include s adescriptio n o f asset s th e Receiver ha s acquire da s aresu

U o f thei r inclusio n i

n th e Receivership . Wher e possibl e th e Receiver ha s include destimate dvalue s o f thes e assets . However , give n th e stat e o f th e U.S . economy a

t th e tim e o f

thi s Report , i

t i s importan t

t o note tha

t any suc h estimations , valuation s o r

appraisal s ar

e subjec t t o change . I

n particular , du e t o th e poo r stat e o f th e rea l estat e markets , th e estimate s provide dma y diffe r markedl y fro

mth e actual amount s realize d upo n th e sellin g o f

an y rea l property . 1 . Venic e Je t

Center , LLC . Venic e Je t

Center , LLC ("VJC") , i s aFlorid alimite dliabilit y compan y forme di

n Apri l 2006 . It s principa l addres s i s th e Office , an dNade l wa s it s registere dagen t an dth e managin g member . Th e asset s o f VJ C wer e purchase dwit

h proceed s o f

Nadel' s scheme , an

d over tim e additiona l proceed s o f th e schem e wer e transferre dto VJC . VJ C i s aviabl e busines s wit

h potentia l to generat e asset s fo r th e Receivershi p estate . O n January 27 , 2009 , th e Cour t expande dth e Receivershi p t o includ e VJC . VJ C i s a full y operatin g fixed-base operator , o r "FBO, " business . I

t include s aflight

school , fuelin g

2 0Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 2 1 o f 4 1

service , hanga

r rentals , an dacafe . Sinc e th e Receiver' s appointmen t a s Receiver

o f VJC , h e ha s take n contro l o f

i t an di s continuin g t o operat e th e business . Th e Receiver i s continuin g VJC' s longstandin g pursui t o f apermi t to buil dne w hanger s a t th e VJC . Th e Receive r believe s tha

t th e permi t

to buil dmor

e hangars , whic h wa s requeste dwel l befor e th e Receiver' s appointment , wil l make th e VJ C more attractiv e t o potential purchaser s an d ultimatel y increas e th e valu e o f th e business . Th e Receive r

ha s possessio n andcontro l o f abuildin g owne dby VJC locate da t 40 0 Airpor t Avenu e East , Venice , Florida , 3428 5 (th e "VJ C Building") . Th e VJC Buildin g ha s on e know n encumbrance : aloa n wit h Norther n Trus t Bank , N.A. , o

n whic h there i s a remainin g balanc e o f

$1,963,790.00 . Th e Receive r

ha s encountere dsome problem s i n connectio n wit

h th e ongoin g managemen t

o f th e VJC . Th e Cit

y o f Venic e (th e "City") , i

n contraventio n o f

it s leas e an d specifi c directio n fro

mth e Federa

l Aviatio n Authority ("FAA") , ha s refuse dt o gran t VJ C authorizatio n to develo p fou r hangar s a

t th e VJ C facility . Th e Cit y official s hav e publicl y announce dthei r

inten t t o terminat e th e VJ C leas e wit h th e Cit y andtake ove r

VJC' s operations . Th e Receive r intend s to vigorousl y resis t an y unwarrante dinterferenc e b y th e Cit y wit h wha t appear s t o b e asubstantial an dvaluabl e property righ t o f VJ C (an do f

th e Receivershi p estate) . On Ma y 14 , 2009 , th e Cour

t grante dth e Receiver' s reques t fo r leav e t o file acomplain t

agains t th e Cit y o f Venic e pursuan t

t o Titl e 1 4 o f

th e Cod e o f

Federal Regulations , Par

t 16 . (Doc . 132. ) A s o f

th e dat e o f

filing thi s Report , th e Cit y ha s no t ye t vote do n whethe r

i t intend s t o furthe

r resis t th e developmen t

o f th e hangar s a

t th e VJC .

2 1Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 2 2 o f 4 1

The Receive r

estimate s VJ C ha s significan t valu e i n exces s o f

th e fund s owe dt o Northe mTrust . However , thi s valu e i s subjec t t o chang e dependin g on th e resolutio n o f th e hanga r permi t issue . Th e Receive r

ha s receive dsignifican t

interes t i n th e purchas e o f

VJ C andcontinue s to activel y marketin g th e business . Partie s intereste di n marketin g o r purchasin g thi s propert

y shoul dcontac t

th e Receive r

directly . 2 . Tradewind , LLC . Th e informatio n reviewe dto date show s that Nade l wa s als o th e managin g member o f Tradewind , LL C ("Tradewind") . Tradewin dwa s forme di n Delaware i

n Januar y 2004 , an d registere dfo

r th e first tim e i n Florid ai

n Marc h 2008 . Nade l wa s Tradewind' s managin g member andit s registere dagent , andTradewind' s principal addres s wa s th e Office . Th e Receiver discovere dtha t

Tradewin downe dan dcontrolle dfive plane s an don e helicopter . Tradewin dals o own s 3 1 airpor t hangar s a

t th e Newnan-Cowet aCount y Airpor t i n Georgi a (th e "Georgi aHangars") . Th e Receiver' s investigatio n reveale dtha t Tradewin dwa s funded wit h mone y fro

mNadel' s scheme . Simila r t o VJC , Tradewin dappear s t o b e aviabl e busines s wit

h potentia l t o generat e asset s fo r th e Receivershi p estate . On Januar

y 27 , 2009 , th e Cour

t expande dth e Receivershi p t o includ e Tradewind . Tradewin di s afull

y operatin g business . Sinc e th e Receiver' s appointmen t a s Receive r

o f Tradewind , h e ha s take n contro l o f i t an di s continuin g t o operat e th e business . Tradewin d collect s approximatel y $28,00 0 i n monthl y ren t

(mainl y fro

mth e hangars ) an dincur s varyin g monthl y expenses , whic h includ e lan drent , loa n payments , payroll , an dvariou s utilities . Th e Receive r i s entertainin g offer s t o purchas e thi s busines s o r an y o f it s assets .

22Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 2 3 o f 4 1

Th e Receiver

ha s possessio n an dcontro l o f th e Georgi aHangars . Th e Georgi a Hangar s hav e on e know n encumbrance : aloa n wit h th e Ban k o f Cowet awit

h aremainin g balanc e o f

approximatel y $958,265.79 , an dmonthl y payment s o f $8,055 . There i s als o monthl y rent

o f $3,079.8 9 du e to th e Newnan Cowet aAviatio n Authority . Th e Receiver ha s bee n makin g thes e monthl y payment s a s h e believe s the y are i n th e bes t

interes t o f th e Receivership . Th e Receiver

als o gaine dpossessio n an dcontro l o f th e five plane s andhelicopter . Th e followin g tabl e show s th e year , model , an dknow n encumbrance s relatin g to eac h aircraft . Aircraf t i n Receiver' s Possessio n ••'•^iliiidteih : v': . Piper PA-28/14 0 Cessn a15 2 Learjet31 A Citatio n Baro n Schweize r 30 0 

### Ym

r 197 1 197 8 199 6 199 2 197 7 199 7 Minihf t Airplan e Airplan e Airplan e Airplan e Airplan e Helicopte r 1%-: , '

^ llnow Q Ei#iuii«iKs e • • None . None . Loa n wit h General Electri c Capita l Corporatio n ("GECC" ) entere dinto o n Ma y 17 , 2006 , fo

r approximatel y $2. 4 million . Loa n wit h VF S Financing , Inc . ("VFS" ) entere d int o o n Ma

y 23 , 2008 , fo

r approximatel y $2. 1 millio n None . None . O n Apri l 17 , 2009 , th e Cour t authorize dth e sal e o f

th e Schweizer

helicopte r

fo r $200,000.00 . (Doc . 108. ) O n Ma y 1 , 2009 , th e Cour

t authorize dth e Receiver' s settlement s wit h GEC C an dVF S t o dispos e o f th e Learjet

an dth e Citation , respectively , i n ful l satisfactio n o f

th e respectiv e loans . (Doc . 119. ) Becaus e i t appeare dthat

th e aircraf

t were

2 3Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 2 4 o f 4 1

value dsignificantl y les s tha n th e amoun t

o f th e loan s on th e aircraft , th e Receiver determine d that thes e settlement s wer e i

n th e bes t interes t o f th e receivership . Th e Receiver i s currentl y evaluatin g th e valu e o f

th e othe r thre e aircraf

t an ddeterminin g th e appropriat e metho do f thei r disposition .

3 . Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; an d Laure l Mountai n Preserv e Homeowner s Association , Inc . Th e Receiver' s investigatio n reveale dtha t Laure l Mountai n Preserve , LLC ("Laure l Mountain") , wa s aNort

h Carolin alimite dliabilit y compan y forme di

n o r abou t December 2003 . Laurel Mountai n wa s "withdrawn " a s alimite dliabilit y compan y i

n Januar y 2006 . It s principal addres s wa s th e Office , andit s manager an dmember

wa s Nadel . Laurel Preserve , LLC ("Laure l Preserve") , wa s formeda s aNort h Carolin alimite dliabilit y compan y i

n Februar y 2006 . It s principa l addres s wa s th e Office , Nade l wa s it s registere dagent , andth e "Registere dOffice " addres s wa s ahome i n Fairview , Nort

h Carolin atitle di

n th e name s o f Nade l andhi s wife . Th e manage r wa s Nadel , andalthoug h Laure l Preserve' s 200 6 Operatin g Agreemen t

identifie s Nade l an dhi s wif e a s member s o f

Laure l Preserv e wit

h eac h havin g mad e a"capital contribution " o f $750 , th e Laure l Preserv e 200 7 federa l income tax retu m identifie s Scoo p Capital a s owne r o f 100 % o f Laure l Preserve . Laure l Mountai n Preserv e Homeowner s Association , Inc . (th e "HOA") , i s aNort h Carolin anon-profi t

corporatio n forme di

n Marc h 2006 . It s principa l addres s wa s th e Fairview , Nort

h Carolin ahome , an dit s registere dagen t wa s Nadel . Documentatio n reviewe dan dinformatio n obtaine db y th e Receive r showe dtha

t Laure l Preserv e hold s titl e t o approximatel y 42 0 acre s nea r Asheville , Nort

h Carolin ai

n Buncomb e an dMcDowel l counties , intende dfo r developmen t

o f home-site s (th e "Laure l

24Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 2 5 o f 4 1

Mountai n Property") . Th e Laure l Mountai n Propert y wa s originall y purchase db y Laurel Mountai n i

n 200 3 andthe n "sold " t o Laure l Preserv e i n Februar y 2006 . Laure l Mountai n provide dfinancing fo

r tha t purchas e i

n th e for mo f a$2,900,00 0 loa

n t o Laure l Preserve . Accordin g t o documentatio n retrieve dfro mth e Office , Laure l Mountai n an dLaurel Preserv e receive dsignifican t fundin g i

n th e for mo f "loans " fro

mScoo p Capital , Scoop Management , Tradewind , Nade l andMrs . Nade l an dBB& T Bank . O n Februar y 11 , 2009 , th e Cour t expande dth e Receivershi p t o includ e Laure l Mountain , Laure l Preserve , andth e HOA . Sinc e th e Receiver' s appointmen t a s Receiver

o f thes e entities , he ha s take n contro l o f the man di s workin g on marketin g fo r sal e th e Laure l Mountai n Property . Thi s propert y currentl y doe s no t

generat e any income . Th e Laure l Mountai n Property encompasse s 2 9 lots , includin g 2 3 estate-size dand6 cottage-size dlots . Ther e i s als o acabi n o n thi s propert

y that , accordin g to th e Buncomb e Count y Propert y Appraiser , i s value da

t $319,800 . Th e Laure l Mountai n Propert y i s full y developed : infrastructure an dutilitie s ar e currentl y i

n plac e an dare full

y functional . Th e Laure l Mountai n Propert y ha s thre e know n encumbrances . Th e first encumbranc e i s a$360,157.3 7 loa n fro mBB& T Bank . Th e secon dencumbranc e i s a $1,900,00 0 interes t

onl y loa n fro mWachovi aBank , N.A . Ther e i s amonthl y paymen t o f $5,149.6 6 du e o

n thi s latter

loa n andth e Receive r

presentl y i s no t

makin g payment s on thi s loan . Th e thirdencumbranc e i s a n easemen t

o f approximatel y 16 9 acre s o f th e Laure l Mountai n Property , whic h wa s grante dt o alan dconservanc y i n 2005 . I

t appear s that

thi s donatio n wa s mad e i

n par t fo r th e Nadels ' ow n tax benefit . Th e Receive r i s contemplatin g

2 5Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 2 6 o f 4 1

whether i t woul db e i

n th e bes t interest s o f

th e Receivershi p to seek

t o recove r

thi s easement fro mth e conservanc y a s i

t ma y creat e a n exponentia l increas e i

n th e valu e o f

th e ful l acreage . Th e Receiver

ha s consulte dwit

h arealto r

wh o previousl y liste dth e propert y andi s entertainin g offer s to purchas e o r proposal s t o marke t

thi s develope dproperty eithe r by lot or i n it s entirety . Th e Receiver i s stil l evaluatin g th e curren t valu e o f thi s property , but

i t appear s tha

t th e valu e i s highe r

tha n th e amoun t

o f th e encumbrances . For

more informatio n regardin g thi s property , pleas e refe r t o http://www.laurelmountainpreserve.com/ . Partie s intereste di

n marketin g o r

purchasin g thi s propert

y shoul dcontac t

th e Receive r

directly . 4 . Marguerit e J . Nade l Revocabl e Trus t UA D 8/2/2007 . Th e Marguerite J . Nade l Revocabl e Trus t Under Agreemen t

Date d8/2/200 7 (th e "Trust" ) wa s create do

n Augus t 2 , 2007 . Th e truste e i s identifie da s Mrs . Nadel . Th e Receiver' s investigatio n reveale dtha t th e Trus t wa s fiande

dentirel y wit

h proceed s o f

Nadel' s schem e throug h (1 ) atransfe r o f $500,00 0 fro

mScoo p Managemen t

i n Augus t 200 7 and(2 ) a transfer o f $150,00 0 fro

mScoo p Capital o n th e da y befor e Nade l fled. I

t als o reveale dtha

t Nade l controlle dth e accoun t i n whic h th e mone y hel db y th e Trus t

purchase dandsol d securities . Significantly , a s allege di n th e criminal complain t

agains t Nadel , i n a n apparen t not e Nade l lef

t fo r hi s wif e before fleeing, h e instructe dher to "us e th e trus t

(yours ) t o your benefi t a s muc h anda s soo n a s possible. " Unite dState s v. Nadel , Cas e No . 0 9 MAG 169 (S.D.N.Y.) , Compl . ^ 17 , attache da s Exhibi t 1 4 to th e Receiver' s Declaratio n i n Suppor t o f Secon dUnoppose dMotio n t o Expan dreceivershi p (Doc . 37-15) .

2 6Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 2 7 o f 4 1

Sinc e th e Receiver' s appointmen t a s Receive r

o f thi s Trust , h e ha s take n contro l o f th e ban k account owne dby th e Trust . Currently , there i s approximatel y $381,142.3 4 remainin g i

n thi s account . 5 . Guy-Nade l Foundation , Inc . Th e Guy-Nade l Foundation , Inc . (th e "Foundation") , i s aFlorid anon-profi t corporatio n formedi

n Decembe r

200 3 fo r "charitable , educational an dscientifi c purposes. " Nade l wa s th e Foundation' s incorporato r an dit s registere dagent . Further , accordin g t o it s 200 6 federa

l ta x retum , th e Foundation' s Presiden t i s Nadel . Th e Foundation' s curren t principal addres s i s th e Office . Th e Receiver

ha s gathere dinformatio n tha t indicate s th e Foundatio n wa s fundedwit h proceed s o f

Nadel' s scheme , whic h wer e transferre ddirectl y fro mScoo p Capital or indirectl y throug h transfer s fro mth e Nadels ' personal accounts . I n addition , i

n December 200 3 an dDecember

2004 , th e Foundatio n wa s deede dapproximatel y 2 2 lot s locate di n Nort h Carolin afro

mLaure l Mountai n an dNade l an dhi s wife . Thes e lot s ar e essentiall y adjacent

t o eac h other . Th e lot s appea r t o hav e bee n purchase db y Laure l Mountai n an dth e Nadel s a s par t o f th e same genera l transactio n i n whic h Laure l Mountai n purchase dth e Laurel Mountai n Property . A

t th e tim e o f

thos e transactions , Nade l wa s alread y perpetratin g hi s scheme , andessentiall y al l o f th e Nadels ' income wa s derive dfro mthat scheme . Additionally , th e Receive r ha s possessio n an dcontro l o f tw o smal l parcel s o f unimprove dlandi

n Thomasville , Georgi a(thi s lan di s separat e fro mth e Thomasvill e Property discusse di

n sectio n V.D . La , below ) owne db y th e Foundation . Accordin g t o th e Thoma s Count

y Ta x Assessor' s Office , on e o f th e parcel s i s approximatel y 1.1 7 acre s wit h a

2 7Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 2 8 o f 4 1

landvalu e o f

$30,76 2 andafree-standin g garag e wit h avalu e o f

$3,928 . Th e othe r

parce l i s .1 2 acre s wit

h alandvalu e o f

$4,276 . O n March 9 , 2009 , th e Cour t expande dth e Receivershi p to includ e th e Foundation . Sinc e th e Receiver' s appointmen t a s Receive r

o f th e Foundation , h e ha s take n contro l o f i t andi s workin g o

n marketin g th e rea

l property owne dby th e Foundation . 6 . Lim e Avenu e Enterprises , LLC , an dA Victoria n Garde n Florist , LLC . Lim e Avenu e Enterprises , LLC ("Lime" ) i s aFlorid alimite dliabilit y company forme di n Augus t 200 6 fo r "an y an dal l lawfu

l business. " Lime own s abuildin g locate da t 59 9 Nort h Lim e Avenue , Sarasota , Florid a3423 7 (th e "Lim e Building") . Lime purchase d th e Lim e Buildin g i

n Augus t 2006 . Publi c record s andother informatio n reviewe db

y th e Receiver indicate tha

t Lim e wa s forme dby th e Nadel s fo r th e specifi c purpos e o f

purchasin g th e Lim e Building . Th e Lim

e Buildin g house s aflower shop , whic h i s owne dby A Victoria n Garde n Florist , LL

C ("Victorian Garden") , aFlorid alimite dliabilit y compan y forme di

n Apri l 2005 . Th e Receiver' s investigatio n reveale dtha t Lim e an dVictorian Garde n wer e fundedwit

h proceed s fro

mNadel' s scheme . On Marc h 17 , 2009 , th e Cour t expande dth e Receivershi p t o includ e Lim e an d Victorian Garden . Sinc e th e Receiver' s appointmen t a s Receive r

o f thes e entities , h e ha s take n contro l o f

the man di s workin g on reviewin g thei r book s an drecord s anddeterminin g th e mos t pruden t cours e o f

actio n t o take . I

n that regard , th e Receive r

i s evaluatin g whether th e flower

shop' s operation s ar e profitabl e an dwhethe r it i s i n th e bes t

interes t o f th e Receivershi p estat e t o maintai n ownershi p o f thi s business .

2 8Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 2 9 o f 4 1

Th e Receiver

ha s possessio n an dcontro l o f th e Lim e Building . Th e Lime Buildin g ha s on e know n encumbrance : amortgag e owe dt o th e individual s wh o sol dth e buildin g to Lim e o n whic h th e balanc e i s approximatel y $600,000 . Th e Receiver i s presentl y attemptin g to determin e th e valu e o f

thi s property . Th e Receive r als o ha s possessio n an dcontro l o f tw o van s owne dby Lime ; a199 9 For dva n an da200 3 Dodg e van . Th e Receive r doe s no t hav e any estimatio n o f

valu e o f thes e van s a

t thi s time . There are n o know n encumbrance s o n thes e vans . 7 . Hom e Fron t Homes , LLC . Home Front

Homes , LLC ("Hom e Front Homes" ) i s aFlorid alimited-liabilit y compan y tha t

wa s forme di

n 200 6 fo

r th e purpos e o f

"an y an dal l lawful business. " Th e Receiver ha s no t sought aforma l orde r expandin g th e Receivershi p t o includ e Home Fron t Homes . However , a s o f

Apri l 15 , 2008 , Nade l wa s th e sol e managin g membe r o f Hom e Front Homes , an dScoo p Capital own s amajorit y equit y interes t i n Home Front

Homes . B y virtu e o f thi s controllin g interest , th e Receive r ha s assume dcontro l ove r Home Front

Home s an di s directin g th e operatio n o f that compan y fo

r th e benefi t

o f th e Receivershi p estate. '

' O n behal f

o f Home Front

Homes , th e Receive r

initiate dalawsui t

agains t Bria n C . Bishop , aforme r employe e wh o als o hada n ownershi p interes t

i n Hom e Front Homes . Hom e Front Home s sue dMr . Bisho p fo r breac h o f

non-compet e covenant s i n hi s employmen t

agreemen t an do f apurchas e agreemen t

(wherei n Hom e Fron t

Home s purchase dth e assets , goodwill , an dcustomer s o f

Mr . Bishop' s company . Home Front , Inc.) , a s wel l a s breac h o f a promissory note an dtortiou s interferenc e wit h abusines s relationship . Sinc e endin g hi s employmen t

wit h Hom e Fron t Homes , Mr . Bisho p ha

dstarte dacompetin g busines s i n direc t violatio n o f

hi s non-compet e agreemen t an dha dsolicite dHome Fron t

Home s customers . Th e Receiver , throug h Hom e Front Homes , institute dthi s litigatio n t o preserv e th e valu e o f Hom e Front

Home s fo

r th e Receivershi p estate . (footnot e cont'd )

2 9Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 3 0 o f 4 1

Hom e Front Home s i s engage di

n th e busines s o f

manufacturing , marketing , an d sellin g energy-efficient

homes . Hom

e Front Home s i s a

n operatin g business . Th e Receiver intend s t o sel l Scoo p Capital' s equit y interes t i n thi s entity i

n amanner

whic h woul db e mos t beneficia l to th e Receivershi p estate . T o date , th e Receiver ha s no t sough t to brin g thi s busines s a s awhol e int

o th e Receivershi p an dlikel y wil l no t d o s o absen t

anecessit

y to protec t th e operatio n fro

mcreditor s whil e th e busines s or th e Receiver' s interes t

therei n i s bein g sold . Th e Receiver i s currentl y negotiatin g th e sal e o f th e receivership' s interes t i n thi s business . I

f atransactio n i s confirmed , th e Receive r wil l appl y t o th e Cour

t fo r approval o f th e sal e o f

th e Receiver' s interest . Partie s intereste di n marketin g o r

purchasin g thi s busines s shoul dcontac t

th e Receiver

directly . 8 . Summe r

Plac e Developmen t

Corporation . Summer Plac e Developmen t

Corporatio n ("Summe r

Place" ) i s aFlorid acompan y tha t wa s formedi

n 200 5 fo r th e purpos e o f

"an y an dal l lawfu

l business. " Th e Receiver ha s no t sought aforma l orde r expandin g th e Receivershi p t o includ e Summer Place . However , a s o f Januar y 20 , 2007 , Nade l wa s amanagin g member o f Summer Place , an dScoo p Capital own s afifty-percent

interes t i n Summer

Place . B y virtu e o f

thi s fifty-percent

interest , th e Receive r ha s no t assume dful

l contro l ove r

Summer Place , but

i s workin g wit

h th e other managin g member

andfifty-percent

owne r i n directin g th e operatio n o f Summer Plac e fo r th e benefi t

o f th e Receivershi p estate .

Thi s matte r

ha s bee n settle dan dth e litigatio n i s n o longer pending . Mr . Bisho p wa s aske dt o compl y wit

h th e restrictiv e covenants , an dth e compan y forgav e certai n purporte ddeb t owe d fromMr . Bisho p t o Home Fron t Homes , whic h deb t

appeare duncollectible .

30Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 3 1 o f 4 1

Summer Plac e i s th e owner

o f apropose daffordabl e residential housin g developmen t site i n Manate e County , Florida . Summer Plac e i s a

n operatin g business . Th e Receiver intend s t o sel l Scoo p Capital' s equit y interes t i n thi s entit

y i n amanner

whic h woul db e mos t beneficia l t o th e Receivershi p estate . Partie s intereste di n marketin g o r

purchasin g thi s busines s shoul dcontac t

th e Receive r

directly . C . Securin g Receivershi p Funds . Upon hi s appointment , th e Receive r wa s initiall y concerne dtha t th e Receivershi p Entitie s might

hol dposition s i

n volatil e securitie s tha

t woul drequire a

n exi t strateg y to avoi d o r minimiz e losses . Th e Receiver immediatel y investigate dth e nature o f th e Receivership' s holding s an ddetermine dtha t n o suc h exi t

strategie s wer

e require dbecaus e almos t al l o f th e relativel y liqui dholding s wer e i n cas h o r cas h equivalents. ' Th e Receiver

coordinate dwit

h th e SE C t o mov e swiftly to freez e al l fund s o f whic h the y wer e aware . Th e Receive r andhi s attorney s engage di n apreliminary revie w o f document s andother

informatio n for

th e purpos e o f

identifyin g institution s tha t potentiall y hel drelevan t

financial account s or

line s o f credit . Th e Receive r

immediatel y forwarde d copie s o f th e asse t

freez e order s t o th e pertinen t institution s andconfirme dtha t the y understoo dthei r

obligation s under

th e freez e orders . Receivershi p fund s are currentl y bein g hel di n si x different

institutions : (1 ) Northe m Trus t Bank , N.A. ; (2 ) Wachovi aBank , N.A. ; (3 ) Shorelin e Tradin g Group , LLC ; (4 ) Branc h Bankin g an dTrus t

Compan y ("BB&T") ; (5 ) Bank o f Coweta ; an d(6 ) Thomasvill e National Bank . VJ C als o maintain s a n insignifican t

amoun t o f fund s i n asmal l operatin g accoun t wit h

' " Se e Sectio n V.D.2.b . infr afo r adiscussio n o f

th e Receivershi p estate' s securitie s holdings .

3 1Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 3 2 o f 4 1

Ban k o f America . Attache da s Exhibi t A t o thi s Interi mRepor

t i s acas h accountin g repor t showin g th e amoun t

o f money o n handa t inceptio n o f

th e Receivershi p (Januar y 21 , 2009 ) les s operatin g expense s plu s revenu e throug h Apri l 30 , 2009 . Thi s cas h accountin g repor t doe s no t reflec t non-cas h or

non-cas h equivalen t

assets . Thus , th e valu e o f al l propert

y discusse di

n Sectio n V.B . abov e andSectio n V.D . belo w i s no t include di

n thi s report . Al l Receivershi p fund s are currentl y bein g hel di n non-interes t

bearin g accounts . Th e Receiver i s contemplatin g th e mos t appropriat e actio n t o tak e wit h respec t t o thes e fund s i

n light o f th e curren t state o f th e econom

y andfinancial institutions . H e wil l likely consolidat e th e fund s into on e to thre e institution s an dwil l explor e th e relativ e benefit s an drisk s o f movin g th e fund s int o interest-bearin g account s and/o r revenue-generatin g investments . D . Othe r

Asset s Recovered . I n additio n t o th e asset s discusse di n conjunctio n wit

h th e expansio n o f

th e Receivershi p i

n sectio n V.B . above , th e Receive r ha s als o recovere danumber o f othe r assets , mos t o f whic h ar

e i n th e proces s o f

bein g valued , assessed , andotherwis e analyze dfo r liquidation , disposition , or other action . Again , give n th e stat e o f th e U.S . economy a

t th e tim e o f submissio n o f

thi s Report , th e Receive r emphasize s that

an y estimates , appraisals , or valuation s ar e subjec t

t o chang e becaus e o f

marke t forces . I n particular , du e t o th e poo r state o f th e real estat e markets , th e estimate s provide di n sectio n V.D. I belo w ma y b e significantl y different fro mth e amount s realize dupo n sellin g suc h rea l property .

3 2Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 3 3 o f 4 1

1 . Rea l Property . a . Thomasville , Georgia . Th e Receiver

ha s possessio n andcontro l o f approximatel y 1 4 acre s i n Thomasville , Georgi a(th e "Thomasvill e Property") . Th e Thomasvill e Propert y encompasse s 4 5 lots , 4 4 o f whic h are vacant . A hom e on on e o f

th e Thomasvill e Propert

y lot s wa s buil t

b y Home Front Homes . Afte

r it s purchase , approximatel y $750,00 0 o f infrastructure wa s adde dt o th e Thomasvill e Property . Th e Thomasvill e Property i s full y developed : infrastructure and utilitie s ar

e currentl y i

n plac e andar

e full y functional . Firs t

Realt y & Appraisal Services , Inc. , prepare dappraisal report s o f tw o lot s on th e Thomasvill e Property . A s o f Februar y 5 , 2009 , th e lo t

wit h th e home o

n i t wa s value da

t $123,500 . Als o a s o f

Februar y 5 , 2009 , a vacan t lo t on th e Thomasvill e Propert y wa s value da

t $14,000 . Th e Thomasvill e Propert

y ha s tw o know n encumbrances . Th e first encumbranc e i s a $600,00 0 loan , o n whic h a$571,81 6 balanc e i s due . Al l interes t ha s bee n pai dfo

r th e yea r 2008 , an dn o interes t

i s du e unti l December

2009 . Th e secon dencumbranc e i s aloa n fo r $141,36 6 fo

r th e constructio n o f

th e house . Bot

h o f thes e loan s mature i

n December

2009 . Th e Thomasvill e Propert

y currentl y i s no t

generatin g an y income . Th e Thomasvill e Propert

y i s ready fo

r sal e wit h 4 5 lot s havin g al l utilities , roads , and othe r improvements . RE/MAX o f Thomasvill e ha

dpreviousl y liste dth e property o n it s website . Th e Receive r

i s presentl y determinin g th e appropriat e metho dan dagent s t o us e t o marke t thi s property . Partie s intereste di n marketin g o r

purchasin g thi s propert

y shoul d contac t th e Receive r

directly .

3 3Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/2009 Pag e 3 4 o f 4 1

b . Grad y County , Georgia . Th e Receiver

ver y recentl y wa s mad e awar e o f approximatel y 37. 5 acre s owne dby Scoop Capital i

n Grady County , Georgi a(th e "Grad y Property") . Accordin g t o Grady Count y publi c records , th e landvalu e o f th e Grady Propert

y i n 200 8 wa s $151,125 . Th e Receiver i s currentl y determinin g th e bes t cours e o f

actio n to take regardin g thi s land . Partie s intereste di

n marketin g or

purchasin g thi s propert y shoul dcontac t

th e Receive r directly . c . Graham , Nort h Carolina. " Th e Receive r

ha s possessio n an dcontro l o f abuildin g locate da

t 84 1 Sout

h Main Street , Graham , Nort

h Carolin a2725 3 (th e "Rite-Ai dBuilding") . Thi s buildin g wa s purchase dfo

r $2,655,00 0 andi s currentl y bein g lease dto aRite-Ai dPharmac y fo r $33,073.0 8 per

mont h under a n absolut e ne t

lease.' ^ Th e Rite-Ai dBuildin g ha s on e know n encumbrance : aloa

n wit h Wachovi aBan

k o n whic h ther e i s aremainin g balanc e o f approximatel y $2,655,000 . Partie s intereste di n marketin g o r

purchasin g thi s propert

y shoul d contac t th e Receive r

directly .

" Th e propertie s describe di n thi s subsectio n an dth e followin g subsection s d , e , an df appea r t o hav e bee n purchase dthroug h Scoo p Rea l Estat e Fund . However , i n light o f th e comminglin g o f

asset s amon g al l Receivershi p Entities , thes e propertie s appea r t o b e appropriatel y attribute da s general asset s o f th e Receivershi p estate .

' ^ Under a n "absolut e net

lease, " atenan t

i s require dt o pa

y al l operatin g expense s o f th e property , an dth e landlor dreceive s ane t rent .

3 4Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 3 5 o f 4 1

d . Raleigh , Nort h Carolina . Th e Receiver

ha s possessio n andcontro l o f abuildin g locate da

t 490 5 Water s Edge , Raleigh , Nort

h Carolin a2706 0 (th e "ED S Building") . Thi s buildin g wa s purchase dfo r $1,900,00 0 an di s currentl y bein g lease dto Electroni c Dat aSystem s ("EDS") , atechnolog y service s provider , fo

r $29,688.5 4 per

mont h under adoubl e ne t

lease.' ^ Th e ED S Buildin g ha s no know n encumbrances . Partie s intereste di n marketin g o r

purchasin g thi s propert

y shoul dcontac t

th e Receiver

directly . e . Tupelo , Mississippi . Th e Receive r

ha s possessio n an dcontro l o f abuildin g locate da

t 243 3 Wes t

Mai n Street , Tupelo , Mississipp i 3880 1 (th e "Starbuck s Building") . Thi s buildin g wa s purchase d fo r $941,00 0 an di s currentl y bein g lease dt o Starbuck s (Stor e #8809 ) fo r $5,745.8 3 per mont h under a n absolut e ne

t lease . Th e Starbuck s Buildin g ha s n o know n encumbrances . Partie s intereste di

n marketin g o r

purchasin g thi s propert y shoul dcontac t

th e Receiver directly . f

. Newnan , Georgia . Th e Receive r

ha s possessio n an dcontro l o f aga s statio n locate da

t 5 McCollu m Station , Newnan , Georgi a3026 5 (th e "Ga s Station") . Thi s ga s statio n wa s purchase dfo r $2,450,00 0 an di s currentl y bein g lease dt o aShel l Ga s franchise e fo r $10,80 0 per

month . Th e Ga s Statio n ha s n o know n encumbrances . Partie s intereste di n marketin g or

purchasin g thi s property shoul dcontac t th e Receive r

directly .

'' ' Under a"doubl e ne t

lease, " th e tenan t

pay s al l taxe s an dinsuranc e expense s tha t aris e fro m th e us e o f th e property . Th e tenan t

pay s rent , an dth e landlordpay s maintenanc e expenses .

3 5Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 3 6 o f 4 1

g . Fairview , Nort h Carolina . O n March 30 , 2009 , th e Cour t grante dth e Receiver' s motio n (Doc . 98 ) fo r possessio n o f propert y locate di

n Fairview , Nort

h Carolin a(th e "Fairvie w Property") . (Doc . 100. ) On Jun e 14 , 2004 , Nade l an dhi s wif e purchase dth e Fairvie w Propert y fo r $335,000.00 . Th e Fairvie w Propert

y wa s asecondar

y residenc e o f

th e Nadel s tha

t i s locate di

n th e mountain s o f Nort h Carolin anea

r th e larg e propert

y owne dby Laure l Preserve , LL C (se e Sectio n V.B.3 , above) . Th e Fairvie w Propert y ha s on e know n encumbrance : aloa n wit h BB& T Ban

k on whic h there i s aremainin g balanc e o f approximatel y $248,560.6 2 Partie s intereste di n marketin g o r

purchasin g thi s propert

y shoul dcontac t

th e Receive r

directly . 2 . Vehicle s an dOthe r Items , a . Vehicles . Th e Receive r

assume dcontro l o f

thre e vehicles : (1 ) 200 8 Mercedes-Ben z E6 3 ("Mercedes") ; (2 ) 200 9 Volkswage n EO S ("Volkswagen") ; an d(3 ) Maserat i Gran dTurism o ("Maserati") . Thes e vehicle s wer e use db y Nei l an dChristophe r

Moody . Th e Mercede s an d Volkswage n were lease db y Valhall aManagement . Becaus e ther e wa s n o valu e t o thes e vehicle s an donl y th e continuin g obligatio n o f leas e payments , th e Receive r surrendere dthe m t o th e leasin g compan y withou t penalty andwithou t

th e lesso r

retainin g an

y clai mto Receivershi p assets . Th e Maserat i wa s lease db

y Vikin g Management . A s wit h th e Mercede s an dVolkswagen , becaus e there wa s n o valu e t o thi s vehicl e andonl y th e continuin g obligatio n o f

leas e payments , th e Receive r surrendere dth e Maserat

i t o th e leasin g compan y withou t

penalty an dwithou t

th e lesso r

retainin g an y clai mt o Receivershi p assets .

3 6Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 3 7 o f 4 1

b . Othe r

Items . Th e Receiver

ha s als o recovere damyriado f othe r item s tha t h e ma y b e abl e to sell , includin g avariet

y o f fumiture , fixtures, computers , an dmiscellaneou s supplies . Th e Receiver wil l take reasonabl e effort s t o maximiz e th e amoun t h e i s abl e t o recove r

fro mth e possibl e sal e o f

al l o f thes e items . Th e Receivershi p Entitie s als o hav e acertificate o f deposi t ("CD" ) andapromissor

y note . Norther

n Tms t Ban k issue dth e C D fo

r approximatel y $1. 5 million . There i s als o a loa n wit h Norther n Trus t fo r $1. 5 millio n wit

h amaturit

y dat e o f December

1 , 2011 . Th e Receiver i s stil l reviewin g th e nature o f thi s loa n andit s relationshi p t o th e CD . Th e promissor y not e i s fro

mQues t Energ y Managemen t

an dtw o individual s t o Valhall a Investment

Partner s i

n th e amoun t

o f $1,100,000 . Interes t

i s bein g pai don thi s note . Th e Receive r

als o ha s tw o promissor y note s that

were execute db

y Valhall a Investment

Partners , L.P. , an dBonds.com , Inc . ("Bonds.com") . On e o f th e note s i s fo

r $400,000.0 0 wit

h 9 % interes t

secure dby th e domai n name www.bonds.com . Bonds.co m pai dal l o f

th e interes t

du e on thi s note , an dth e partie s amende dan drevise dth e note i n th e bes t interes t o f th e Receivership . Th e $400,000.0 0 note i s du e on Octobe r 31 , 2009 , per

a six-mont h extensio n grante dby th e Receiver . Th e othe r note i s fo

r $203,800.00 ; i s du e to matur e on Septembe r

22 , 2010 ; an di s stil l owin g an doutstanding . Th e $203,80 0 note i s a convertibl e not e that

ca n b e converte dinto equity f o th e compan y a

t th e Receiver' s option .

3 7Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 3 8 o f 4 1

E . Litigation . 1 . Fals e Profit s Obtaine dby Som e Investors . A s discusse dabov e i

n Sectio n IV.B.4 , th e Receiver ha s determine dtha

t some purporte dinvesto r

account s receive dmonie s i n a n amount tha t exceede dthei r

investments . Th e Receiver

intend s to seek

to recover

thes e fictitious profit s andredistribut e th e fund s more equitabl y amon g investor s holdin g legitimat e an dallowe dclaims . Th e Receiver ha s continue dto mov e towardinitiatin g thes e "clawback " lawsuit s b y filing aMotio n to Reappoin t Receiver (Doc . 139) . Tha

t motio n wa s grante don Jun e 3 , 200 9 2 . Moodys . Fromth e Receiver' s investigatio n t o date , i t appear s that

asignificant

portio n o f activitie s o f

certai n Hedg e Fund s were manage danddirecte dby Christophe r andNei l Moody . Th e Receive r

believe s tha

t th e Moody s ha

dfiduciary responsibility wit h respec t to th e managemen t

o f thes e Hedg e Funds . Fro mth e documentatio n reviewe dto date , th e Moody s hav e receive dmillion s o f dollar s a s aresul t

o f thei r effort s an dparticipatio n i n Nadel' s activities . Th e Receive r i s preparin g t o institut e appropriat e lega l actio n agains t

th e Moody s t o recove r thi s mone y andasset s tha t wer e acquire dwit

h thi s money . 3 . Recipient s o f

Commissions . Informatio n availabl e t o th e Receive r reveal s tha

t several individual s receive d commission s i

n connectio n wit

h distributio n o f

investment s by th e Receivershi p Entities . Th e Receive r

i s considerin g institutin g litigatio n t o seek th e recovery o f

al l suc h sums . 4 . Othe r

Litigation . Th e Receive r

previousl y ha s bee n contacte db y th e la w firmo f Johnson , Pope , Bokor , Ruppe l & Bums , LLP ("Johnso n Pope" ) regardin g th e institutio n o f aclas s actio n agains t 3 8Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 3 9 o f 4 1

Hollan d& Knight , th e la w firmtha

t prepare dth e private placemen t memorand ausedto solici t investor s int

o th e Nade l scheme . On March 20 , 2009 , Johnso n Pop e o n behal f o f Michae l Sulliva

n an dother s similarl y situated , institute daclas s actio n sui t agains t Hollan d& Knight , Michae l Sulliva

n v . Hollan d& Knight

LLP , Cas e No . 09-cv-0531-EA J (M.D . Fla.) . Shoul dJohnso n Pop e b e successfu l i n thi s litigatio n i

t i s likel y tha

t th e claim s proces s create d fo r th e Receivershi p estat e fo r distribution s t o investor s wit h legitimat e an dallowe dclaim s wil l b e use dto distribut e an y proceeds . Th e Receiver

continue s t o examin e th e action s o f othe r professional s andbusinesse s that provide dservice s t o Receivershi p Entitie s to determin e whethe r he need s to take additional step s wit

h respec t t o an y o f thos e professional s an dbusinesse s t o recover asset s fo r th e receivership . F . Investigatin g Receivershi p Affairs , an dRecoverin g Receivershi p Funds . Th e Receive r

ha s retaine dth e service s o f PDRCertifie dPubli c Accountant s ("PDR") , forensi c accountants , t o assis t i n investigatin g an danalyzin g th e flow o f fund s bot

h i n and ou t o f th e Receivershi p Entities , an dt o assis t i n locatin g additiona l funds , i f any . Th e Receive r ha s als o retaine dth e service s o f Riversid e Financial Grou p ("Riverside") , financial analyst s t o assis t

i n investigatin g andanalyzin g al l o f th e tradin g activity . I

n conjunctio n wit h th e Receiver , PD Ran dRiversid e ar e furthe r attemptin g t o identif

y additional individual s and/o r

entitie s wh o ma

y b e i n possessio n o f

Receivershi p funds . PD Rwil l als o assis t i n determinin g th e amoun t o f eac h investor' s loss .

3 9Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 4 0 o f 4 1

VI . Th e Nex t

Sixt y Davs Th e Receiver

ha s receive donl y aportio n o f th e document s h e ha s subpoenae dfro m thirdparties . I

t wil l b e necessar

y t o obtai n an drevie w al l suc h document s i n orde r to complete a

n understandin g o f

th e flow o f

fund s throug h th e Receivershi p Entities , t o identif y an y additional source s o f

recovery , andt o prepar e a n accounting . Th e Receive r i s workin g diligentl y o n thi s task , but withou t knowin g th e volum e o f

document s h e expect s to receive , i t i s difficult

to estimat e th e tim e neede dfo r completion . Durin g thi s process , th e Receiver i s als o compilin g an danalyzin g individual investo r accounts . Thi s i s anecessary tas k t o asses s an dadministe r investo r claims . Th e Receiver wil l likel y as k

al l investor s t o sen dhi mcopie s o f al l documentatio n relate dto thei r investment s i

n th e Hedg e Funds . H

e wil l revie w an danalyz e al l document s relatin g t o eac h investment

to determin e th e amount s owed , i f any , t o eac h investor . Th e Receive r doe s not expec t to commenc e th e claim s proces s unti l late 200 9 o r earl y 2010 . Th e Receiver wil l provid e amore definitiv e tim e estimat e a s hi s analysi s progresses . Th e Receive r

i s als o reviewin g informatio n to determin e if an y thir dpartie s ma

y hav e liabilit y eithe r to th e Receivershi p estat e o r investors . I

n thi s regardi

t shoul db e anticipate d tha t th e Receiver

wil l brin g action s i

n th e future . Th e Receive r

wil l continu e to attemp t

t o locate additiona l fund s an dothe r asset s and , i f appropriate , wil l institut e proceeding s to recove r asset s on behal f

o f th e Receivershi p Entities . I

n a n effor t t o more full

y understan dth e conduc t

a t issu e an din a

n attemp t t o locate more assets , th e Receive r wil l continu e to conduc t interview s and/o r

deposition s o f

partie s an dthirdpartie s wit

h knowledge .

40Cas e 8:09-cv-00087-RAL-TB M Documen t 14 1 File d 06/09/200 9 Pag e 4 1 o f 4 1

Th e Receiver

wil l als o continu e th e operation s o f all ongoin g businesse s o f th e Receivershi p Entitie s to maintai n and , i f possible , enhanc e thei r

value . Th e Receiver

wil l continu e to marke t

propertie s fo

r sal e an dentertai n offer s fo r purchase . VII . Conclusion . Creditor s andinvestor s i n th e Receivershi p Entitie s are encourage dt o periodicall y chec k th e informationa

l websit e (http://www.nadelreceivership.com/ ) fo r curren t informatio n concemin g thi s Receivership . Th e Receiver an dhi s counse l hav e receive da n enormou s amoun t o f email s an dtelephon e inquirie s an dhav e ha dt o expen dsignifican t

resource s to addres s them . To minimiz e thos e expenses , creditor s andinvestor s ar e strongl y encourage d t o consul t th e Receiver' s websit e before contactin g th e Receive r o r hi s counsel . However , th e Receiver

continue s t o encourag e individual s o r attomey s representin g investor s wh o ma y hav e informatio n tha

t ma y b e helpfu l i

n securin g furthe

r asset s fo r th e Receivershi p estat e or identifyin g other

potential partie s wh o ma y hav e liabilit

y t o eithe r

th e Receivershi p estat e or investor s directl y t o eithe r emai l ksalo@fowlerwhite.com , o r cal l Kathy Sal o a

t 813-228

- 7411 . Date dthi s 9t

h da y o f June , 2009 . Respectfull y submitted .

s / Burto n W . Wiand Burto n W . Wiand , Receive r FOWLERWHIT

E BOGG S P.A . 50 1 E . Kennedy Blvd. , Suit e 1700 Tampa , Florid a3360 2 Phone : 813-228-741 1 Fax:813-229-831 3

40693714v 3 4 1Cas e 8:09-cv-00087-RAL-TB M Documen t 141- 2 File d 06/09/200 9 Pag e 1 o f 2 standardize d Fun d Accountin g Repor t fo rConsolidate d Nade l Entitie s - Cas h Basi s Receivership ; Civi l Cour t Docke t No . 8:09-cv-87-T-26TB M

Reportin g Perio d 03/01/0 9 t o 04/30/0 9

Fun d Accountin g (Se e Instructions) : •Lin e 1 Lin e 2 Line s Lin e 4 Line s Lin e 6 Lin e 7 Line s '•«^ < Lin e 9 Lin e 1 0 Lin e 10 a Lin e 10 b Lin e 10 c Lin e 10 d Lin e lO e

Lin e lO f Lin e 10 g Lin e 1 1 Lin e 11 a Beginnin g Balanc e (A s o f 03/01/09) :

Increase s i n Fun d Balance : Busines s Incom e Cas h an d Securitie s Interest/Dividen d Incom e Busines s Asse t Liquidatio n Persona l Asse t Liquidatio n Third-Part y Litigatio n Incom e Miscellaneou s - Othe r Decrease s i n Fun d Balance : Disbursement s t o Investor s Disbursement s fo rReceivershi p i n Operation s Disbursement s t o Receive ro rOthe rProfessional s Busines s Asse t Expense s Persona l Asse t Expense s Investmen t Expense s Third-Part y Litigatio n Expense s 1 . Attome y Fee s 2 . Litigatio n Expense s Tota l Third-Part y Litigatio n Expense s Ta x Administrato rFee s an d Bond s Federa l an d Stat e Ta x Payment s Tota l Disbursement s fo rReceivershi p Operation s Disbursement s fo rDistributio n Expense s Pai d b y th e Fund : Distributio n Pla n Developmen t Expenses : 1 . Fees : Fun d Administrato r Independen t Distributio n Consultan t (IDC ) Distributio n Agen t Consultant s Lega l Advisor s Ta x Advisor s 2 . Administrativ e Expense s 3 . Miscellaneou s Tota l Pla n Developmen t Expense s Detai l Subtota l Gran d Tota l 579,205.4 3 139,101.8 0 18,056.5 3 5,100.0 0 9,817.3 6 2,582.1 8 

# I 1,299,779.3 0

485,112.4 5

11,098.9 9 •f i

$496,211.4 4 ij . $496,211.4 4 •f.; '

J L

'Lin e 1 Doesn t includ e $1.5 m Scoo p Capita l CD/wil l b e payin g $1.5 m loa nCas e 8:09-cv-00087-RAL-TB M Documen t 141- 2 File d 06/09/200 9 Pag e 2 o f 2 Standardize d Fun d Accountin g Repor t fo rConsolidate d Nade l Entitie s - Cas h Basi s Receivership ; Civi l Cour t Docke t No . 8:09-cv-87-T-26TB M

Reportin g Perio d 03/01/0 9 t o 04/30/0 9

Fun d Accountin g (See Instructions) : Lin e 1 l b

Lin e 1 2 Lin e 12 a Lin e 12 b Lin e 1 3 Lin e 1 4 Lin e 14 a Lin e 14 b Lin e 14 c Distributio n Pla n Implementatio n Expenses :

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# FOWLE R Q002/00 3 Cit y Exhibi t

5

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M LA I 

### ; WHIT E BOGG S

Budo n W . Wian d 811-212-202 9 (Tampa ) 954.703.392 8 (Fi . Laudeniale ) Direc l lax : 813-384-284 8 bwiancKff^rowJcnvhilc.co m Jul y 21 , 200 9 Vi aFacsimil e Rober t C . Anderso n Cit y Attome y Mal l & Anderson , P.A . .'31 4 Eas t Venic e Avenu e Suit e E Venice , Florid a3428 5 rax : (941)480-144 6 Isaac Turne r Manager , City o f

Venic e 40 1 Wes t Venic e Avenu e Venice , F L 3428 5 Fax : 941.480.303 1 Re : SE C v . Arthu r

Nadel , e t al . M.D . Florid aCas e No . 8:09-cv-87-T-26TB M Gentlemen : I hav e receive dreport s an dhav e no w rea danew s articl e tha t at th e mos t recen t meetin g o f th e Cit y Council , aproposal wa s suggeste dtha t th e Cit y Counci l woul dreac h a n agreemen t wit h m c tha t I woul dsel l th e Venic e Je t Cente r t o th e Cit y at apric e detennine dfro

mth e highes t bidde r i n th e marketin g effort s that ar e no w on-goin g t o sel l th e Venic e Je t Center . Th e purpos e o f my lette r i s t o advis e yo u tha

t suc h a n occurrenc e wil l b e unlikely . I hav e a s I hav e explaine dt o yo u fo r aperio do f

man y weeks , bee n pursuin g a n on-goin g effor t t o findaqualifie dbuye r fo r th e Venic e Je t

Center . I hav e ha dsignifican t interes t from a number o f different individual s an dentitie s an da mconfident

that withi n th e near

future , specifi c proposal s fromanumbe r o f source s wil l b e forthcoming . Onc e I hav e complete dm y negotiation s wit

h thes e individual s o r

companies , 1 wil l enter

int o a n agreemen t

wit h th e on e tha

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07/21/200 9 17:3 5 F.K X Rober t C . Anderso n Isaa c Turne r Jul y 21,200 9 Pag e 2 1 believ e i s mos t

advantageou s fo

r my Receivership . A

t tha t tim e I wil l procee dt o propos e approva l o f tha t transactio n b y Judg e Lazana . An y agreemen t

that I migh t mak e wit

h th e Cit y to sel l thi s property base dupo n apric e resultin g fromthes e marketin g effort s woul dclearl y undermin e th e marketin g effort s a s n o reasonabl e busines s perso n o r entity woul dundertak e th e expens e an deffor t necessary t o analyz e apotential purchas e o f

th e Je t Cente r wit h suc h a n agreemen t

in place . Moreover , wer e I to ente r into suc h a

n agreemen t

withou t disclosur e to th e goo dfait h potentia l purchasers , conductin g thes e marketin g effort s woul db e i n ba dfait h an di s somethin g I wil l no t engag e in . I hav e kep t th e Cit y advise dwit

h respec t to th e on-goin g effort s t o marke t thi s facility , hav e offere dto allo w th e Cit y to participat e i n thos e efforts , andhav e alway s bee n ope n to communicatio n wit h Cit y officials . Th e lac k

o f respons e o f

th e Cit y ha s resulte di n substantia l expens e t o th e Receivership , th e necessit y o f filin g aproceedin g wit h th e FAA andma

y resul t i n possibl e additional legal action . Th e purpos e o f

thi s lette r

i s to mak e i t

crysta l clear

to yo u an dth e Counci l that I vie w a s highl y unlikel y tha

t an y circumstance s coul daris e whereb y I woul dundemiin e th e on-goin g marketin g effort s that

I hav e conducte db y enterin g int o aJohimie-Come-Latel y Agreemen t wit h th e Cit y a t th e en do f

th e marketin g process . Becaus e o f th e City' s recalcitranc e to deal wit h thi s issue , th e circumstance s a s the y exis t no w woul drequir e tha t any offe

r b y th e City b e significantl y abov e offer s mad e b y other s t o purchas e th e Je t Cente r in orde r tha t I maintai n goo d fait h wit h thos e wh o hav e participate di n th e marketin g process . Th e substantia l expense s tha t th e Cit y ha s alread y inflicte dupo n th e Receivershi p wil l als o b e part o f m y considerations . 1 stil l a mwillin g t o discus s wit

h an y authorize drepresentativ e o f th e City , a

t an y time , a potential resolutio n t o th e disput e relatin g t o th e buildin g o f

th e hangars . Than k yo u ver y muc h fo

r you r consideration . Sincerely^urs , 

# 'dU_^ ^ BurforrW . Wian d Receive r 

### V BWW/dj b

4161197 6

Fovt'LE R WHIT E BOGG S P.A .

TAMI' A • FOR T .V ( V f R> • T A 1.1 . A H A s S E t . JAC K

SO N \i i i f

• FOR T L AI'II E R» A L ICit y Exhibi t 6

LA W OFFICE S BOONE , BOONE , BOONE . KOD A & FROOK , P.A . p . o . BO X ise e VENICE . FLORID A 342B 4 E.G . (OAN ) BOON E JECFER Y A . BOON E STEPHE N K . BOON E JOH N 5 . KOO A M A f QARE T (PEGGY ) S . FROO K JAUEST . COLLINS . lANDFLAMMe B MO l A MEMBE R O f TH E FLORID A •AR ) ESTABLISHE D 195 6

Jun e 16,200 8 STREE T ADDRESS : lOO l AVENID A DE L CIRC O 342B S • TELEPHON E (84 0 4e»-67i e FA X (941 ) 48B-707 B e-mail : adni@boone-law.con i

VIA EMAI

L AN D HAND DELIVER Y Ms . Lor i Stelzer , Cler

k Cit y o f Venice , Florid a Re : Reques t

t o b e place do n th e Cit

y Counci l Agend afor

Jun e 26,200 8 Dea r Ms . Stelzer : Venic e Je t Center desire s t o mak e on e chang e i n it s letter t o yo u date dJun e 13,2008 . Th e applicatio n wil l b e for

constructib n o f

tw o 8,000-square-foo t

hangar s rathe r

tha n one , bot

h hangar s t o b e locate do n th e wes t sid e o f th e parcel , a s show n o n Exhibi t "A" . Constructio n o f necessar y pavin g an dretentio n doe s no t change . Ther e i s awaitin g lis t

fo r th e tw o hangars . Futur e hanga r constructio n permit s wil l b e applie dfor i f an dwhe n th e nee darises . Al l other part s o f th e Jun e 13 , 2008 , lette r

remain unchanged . Ver y trul y yours , E . G . Boon e ab ccs : Cit

y Attome y Bo b Anderso n Mayo r E dMarti n Cit y Manager

Marti n Blac k Mr . Roger Jemiga n Mr . Ar t Nade l (al l withou t

enclosur e an d al l vi aemail )Cit y Exhibi t 7

cfo^-^O n "-^ ^ OFFICE S 

# • M XV,'^ ^ BOONE , BOONE , BOONE . KOD Aa , FROOK , P.A . p . O . BO X IS9 6 VENICE . FLORID A 3428 4 E.G . (DAN l 600N C STREE T ADDRESS : JEFFER Y A . BOON E ESTABLISHE D I9S S lOO l AVENID A DE L CIRC O 3426 5 STEPHE N K . BOON E JOHNS . KOO A TELEPHON E (941 ) 488-671 6 MARGARE T (PEGGY ) S . FROO KFA X 04I ) 488-707 9 ,....^.,. r ^^...,. ^ «-mail : aclm@boona-law.co m JAME S T . COLLINS . LAN D PLANNE R INO T A MEMBE R O F TH E FLORID A BAR > T|l1 v 1 "700 8

VI A HAN D DELIVERY Mayor an dCit y Counci l Member s Cit y o f Venice , Florid a c/ o Fre dWatt s Venic e Airpor

t Manager 15 0 E . Airpor

t Avenu e Venice , Florid a3428 5 Re : Venic e Je t

Cente r - Tw o Additional Hangar s Dea r Mayo r Marti n an dCounci l Members : W e hav e followe dth e term s outline di n th e letter fromCit y Manager

Mart y Blac k date d Jun e 23 , 200 8 (cop y enclose dfo r reference ) an dwit

h thi s letter

w e reques t

permissio n to procee dt o buildin g permitting . I f al l i s i n order

w e understan dtha

t w e are t o b e o n th e Cit y Coimci l Agend afo

r th e Jul y 22,200 8 meeting . Th e permi t

applicatio n to b e filedi s t o construc t tw o 8,000 square foot

hanga r building s alon g wit h necessar y pavin g andretention . Th e tw o hangar s wil l b e locate do n th e wes t sid e o f th e parce l numbere d1 and5 o n th e drawing . Pleas e se e Exhibi t "A " Concep t Pla n attache din twent

y copies . Th e permi t

ha s bee n obtaine dfromth e Southwes t Florid a Wate r Managemen t

Distric t fo r thi s project . We hav e bee n requeste dt o sho w where al l hai\gar s wil l b e locate do n thi s parce l eve n thoug h furthe

r hanga r constructio n permit s wil l b e applie dfo r i f an dwhe n th e nee d arises . Stor

mwater treatmen t i s show n o n th e Concep t

Pla n a s i s th e landscap e desig n bufferin g an dmitigatio n techniques , als o parkin g areas , acces s andcirculatio n feature s andexterio r

lightin g features . N o additional signag e i s bein g applie dfor . Th e exterio r

norther n Italian buildin g desig n wil l b e th e same a s i s presentl y affixedt o th e recentl y constructe dVenic e Je t Center hangar/storag e buildin g facin g Airpor t Avenue . Th e desig n wil l b e submitte dfo r approval befor

e i t i s applie dt o th e ne w hanga r building .Mayo r andCit y Co u i i Member s Cit y o f Venice , Florid a c/ o FredWatt s Jul y 1,200 8 Pag e 2

Ou r understandin g i s that

Cit y Staf f wil l conduc t

it s technical revie w i n time t o meet th e agend adeadlin e fo

r th e Jul y 22 , 200 8 meeting . Th e Venic e Je t

Center leas e i s date dMa

y 23 , 2006 , andha s 2 8 year s to run . There i s vacant lan dwithi n th e leas e fo

r improvement s t o b e constructed , an dth e leas e specifically call s fo

r additional improvement s b y lessee . Venic e Je t Cente r woul dno t hav e entere dinto th e 30-yea r leas e unles s thi s provisio n wa s apar t o f th e lease . Th e "MinimumStandard s fo r th e Venic e Municipa

l Airport , Venice , Florida, " provide s fo r the constructio n o f

ne w hangar s b y th e FBO . Th e "MinimumStandard s fo r Fixe dBas e Operators , Venic e Municipa l Airport , Venice , Florida, " provide s fo

r an doutline s th e condition s fo r hangar s t o b e buil t

o n th e airpor

t by th e fixedbas e operator . Providin g hanga

r spac e i s on e o f

th e essential operation s o f th e fixedbas e operator , and there i s asizabl e waitin g lis t fo r hanga r spac e bot h a t th e Cit y airpor t offic e an da

t our office . Th e Cit

y o f Venic e operate s 14

4 T-hangar s wit

h 1 2 more about

to b e constructed . Unde r Cit y andFAA mandates , competitio n i s require dan ddiscriminatio n i s no t allowed . Representative s fromVenic e Je t Center , DM K

Engineer s an dSurveyor s andArchitec t Mar k Beeb e wil l atten dth e Jul y 22 , 200 8 meetin g t o presen t th e reques t

t o allo w th e projec t t o proceed . Ver y trul y yours . E . G . Boon e EGB/la f Enclosure s ccs : Cit y Manager

Marti n Blac k Mr . Ar t Nade l Mr . Roger Jemiga n Architec t Mar k Beeb e DMK Engineer s an dSurveyor s (al l withou t

enclosures ) N35-12389\ltiCityofVenice07010 8

BOONE . BOONE . BOONE , KOD A & FROOK . P.A. . ATTORNEY S A T LAW . VENICE . FLORID ANanc y Woodle y - RE : Je t Cente r hanga r concep t pla n 

### Page 1 o f 1 Cit y Exhibi t 8

From : "Roge r

Jemigan " <rwj@venicejetcenter.com > To : "Nanc y Woociley " <nwoodle@ci.venice.fl.us > Date : 7/14/200 8 3:4 6 P M Subject : RE : Je t

Cente r hanga r concep t plan 

### Nancy , Thanks fo r you r tim e an dyou r input , i t was greatly appreciated . Roge rJemiga n 

## Roge r Venic e Je t Center , LL C Hom e Fron t Homes , LL C Gree n Bulidin g System s Tradewind , LL C (941 ) 485-179 9 Offic e (941 ) 866-755 2 Fa x rw j @ venicejetcenter.co m

From : Nanc

y Woodle y [mailto:nwoodle@cl.venice.fl.us ] Sent : Monday , Jul y 14 , 200 8 3:4 1 P M To : Marti n Black Cc : mark@beebedesignstudio.com ; Frederic k Watts ; Joh n Reed ; Jack

Stevenson ; Lor i Stelzer ; Mar y Holcombe ; Roge rJemiga n Subject : Je t Cente rhanga rconcep t pla n

Jack , Mark , Roge r(yjc ) an d I met a t 2;3 0 p m today t o clarif y th e city' s nee d fo rconceptua l pla n t o meet fir e cod e interpretatio n by Fir e Marshal . Concensu s wa s t o reduc

e th e numbe ro f hangar

s fro m 5 t o 4 thereb y meetin g stat e fir e code' s separatio n o f 50 ' betwee n building s o f differen t occupancy . Roge r(yjc ) wil l b e bringin g th e modifie d conceptua l pla n t o you roffic e fo rinclusio n i n th e cit y manager' s repor

t bein g considere d fo rJul y 22t h Cit y Counci l agend a b

y 8 a m o n Tuesday , Jul y 15 . Tlie " fata l flaw " Fre d referre d t o ha s bee n eliminated .



### file://C:\Document s an

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l Settings\Temp\XPgrpwise\487B74BAVe.. . 8/25/200 9Cit y Exhibi t 9 

# VENICEJETCENTE R GATEWA Y T O TH E GUL F COAS T 1 8 Augus t 200 8 Th e Honorabl e EdMartin , Mayor Cit y Counci l o f

th e Cit y o f Venic e Cit y Hal l Venice , Florid a3428 4 " " ^ Ladie s an dGentlemen : I reques t tha t thi s letter accompany th e presentatio n t o Counci l for te n minute s o n Augus t

26 , 2008 , o f our pla n t o buil dfou

r aircraf t storag e hangar s o n aportio n o f our lease dlanda

t th e Airport . Thi s pla n ha s been reviewe db y al l Cit y staf f havin g jm-isdiction , an

dals o bot h th e Outgoin g an dActin g (Jit

y Managers . I t

ha s bee n foundt o confor

mt o all applicabl e plannin g andbuildin g cod e provisions , s o tha

t there are n o impediment s t o th e issuanc e o f buildin g permits . Th e Southwes t Florid aWater

Managemen

t Distric t ("SWFWMD" ) ha s issue dapermi t fo r constructio n on th e site . Consequently , thi s presentatio n i s fo r th e purpos e o f

advisin g Cit

y Counci l o f

th e project , an

d answerin g an

y question s tha

t ma y b e pertinen t

unde r th e circumstances . Venic e Jet Cente r ("VJC" ) ha s operate dth e Fixe dBas e Operatio n an drelate dservice s fo

r approximatel y tw o year s now , imde r a25-yea r leas e an drenewa l optio n that

by no w i s familia

r t o th e Council . W

e hav e conforme dt o al

l provision s o f

tha t lease , an di n particula

r t o th e requirement o f investin g aconsiderabl e amount o f money in th e demolitio n o f tw o derelic t

hanga r buildings , constructio n o f

tw o new ones , andth e renovatio n o f th e 22 0 Airpor

t Avenu e building . Th e planne d constructio n o f

th e fou r new hangar s i s locate do n th e sam e parce l tha t

contain s thos e tw o recently constructe dhanga

r building s an dth e primar

y FB O buildin g (40 0 Airpor t Avenue ) tha

t ha s jus t been completel y renovate dan

dconsiderabl y enlarged . Jus t prio r t o th e executio n o f

ou r lease , SWFWMD hadissue dapermi t fo r hanga r constructio n o n th e ver

y same sit e o n whic h w e pla n t o construc t

thes e fou r hangars . A

t tha t tim e VJ C agree dwit

h th e proposa

l o f th e Cit y Manager

tha t th e entir e site , includin g th e vacant land , shoul db e lef

t together a s on e parcel , togethe r

wit h th e ol dhanga

r building s andth e 40 0 Airpor t Avenu e building . W e als o accepte dth e suggestio n tha t th e leas e includ e aseparate parce l o f 2.5 3 acre s a t th e eas t en do f Airpor t Avenu e fo

r th e same reasons . Th e purpos e o f thi s wa s bot

h t o continu e th e fiill existin g rental income t o th e Cit y o n th e vacan t

land , andt o provide fo

r fiitur e deman dfo r

hanga r space . Fro mou r

poin t o f view , al l o f thi s investmen t

for constructio n require db y th e Cit y leas e contemplate dth e continuin g o f th e buildin g o f

hangar s i n asecondan

dthirdphase . Ther e wa s evidentl y n o nee dt o inves t i n th e FB O renovatio n i f

accessor y hangar s were no t

availabl e t o complet e th e rang e o f

FB O services . W e woul dno t hav e eirtere dint o th e leas e withou t thi s understanding .Venic e Jet Center , LLC : To : Mayor andCit y Council , con' t

Pag e 2 Sinc e inceptio n o f

th e lease , VJ C ha s carefiilly monitore ddeman dfo r hanga r space , a requiremen

t tha t ha s no t bee n satisfie dfo

r many years . Immediatel y afte r completio n o f

th e ne w 10,000 squar

e foo t hanga r i t wa s filled, al l o f

th e spac e wa s utilized , an dsinc e the n w e hav e ha dto stor e aircraf t outsid e whil e turnin g awa y storag e business . A

t th e presen t

tim e w e hav e alon g waitin g lis t

fo r storag e space . Ther e ha s already bee n som e dela y i n processin g ou

r plan s du e to th e chang e o f Cit y Manage r an dth e imderstandabl e tim e pressure o n Cit y staf f that resulted . A

t thi s time , an y fiirthe r dela y wil l resul t

i n aver y seriou s los s o f

revenu e t o VJC . The Actin g Cit

y Manage r

ha s suggeste dtha t

w e mak e thi s presentatio n t o th e Counci l t o communicat

e ou r positio n an danswer

an y question s th e Member s ma y have . T o tha

t endw e respectfiilly point

out th e followin g matters . The fac t tha t oiu

- leas e require dVJ C to perfor mcertai n constructio n doe s no t imply tha t additiona l constructio n consisten t

wit h permitte duse s wa s thereb y prohibited . Th e Permitte dUs e claus e an dapplicabl e Minimmn Standard s rule s make that clear . Ther e ar e n o reference s i n th e leas e t o arequiremen

t o f Cit y Counci l permissio n fo

r construction . Requirement s i n th e leas e fo r th e "City's " approva

l are clearl y standardclause s i n ever y leas e that

refer t o variou s require dCit

y departmenta

l approvals . W e kno w o f

n o instanc e i n whic h vacan t lan da t th e airpor t wa s lease db y th e Cit y fo r specifi c uses , an dthereafter th e Tenant

hadt o go t o Cit

y Counci l fo

r expres s permissio n t o construc t

abuildin g for

apermitte dus e o n that

land . Th e Venic e Buildin g Department recentl y issue dapermi t

fo r VJ C t o enlarg e th e footprin t an dtotal cubi c are ao f

th e 40 0 Airpor

t Avenu e b y approximatel y 50% . Therefore , our applicatio n for

hanga r buildin g permits , asecon dphas e regardin g accessor

y buildings , shoul dreceiv e th e same treatment . Venic e Je t Center ha s bee n agoo dneighbo r t o th e entire Cit

y a s wel l a s nearb y residents , i n stricti y conformin g t o th e term s an dcondition s o f it s lease , an di n goin g fiirther t o enhanc e th e look an dprope r fimctioning o f

th e airport . We designe dth e sit e an dstructur e o f th e ne w hangar s to provid e fo r hanga r wall s tha t wil l lesse n noise , allo w fo r sufficien t ope n space , andagenerou s amount o f green screenin g alon g Airpor t Avenue . Th e fou

r hangar s nex t

t o th e FB O buildin g will satisf y demandfo

r th e immediat e fiiture, andw e wil l wai t wit h th e constructio n o f

additiona l hangar s unti l w e determin e tha t fiiture demandwarrant s it . W e believ e tha

t th e time ha s come fo

r th e "goo dneighbor " polic y t o wor k bot h ways . W

e hav e gone int o th e detail s o f ou r leas e wit h n o intende ddisrespec t

for thos e member s o f

Cit y Coimci l wh o ma

y no t ftilly embrac e th e City' s obligation s t o federa l an dstat e authoritie s a s Sponsor o f th e airport . Fo r

more tha n sixty years , thi s landmar k cit y asse t ha s grow n i n aslow , organi c maimer , respondin g t o norma l deman dfo r service s an dshrinkm g i n are aa s arespons e t o th e City' s increasin g nee dfor

housing . Th e ne w neighbor s wh o hav e recognize dthat the y wer e movin g t o a locatio n nea

r a n airpor t hav e becom e goo dneighbors . We hop e tha t amajorit y o f thi s Counci l wil l joi n themi n recognitio n o f tiie airport' s valu e to th e Cit y o f Venic e an dth e importanc e o f th e goo d wdl l o f th e many peopl e wh o nee dit , us e it , andearn thei r livin g there . Than k yo u fo r you r kin dattention . Verytru l Venice<fe t By : Jwhu r

Nadel , Manage r

40 0 Airpor t Avenue , Venice , Florid a 3428 4\ Cit y Exhibi t 1 0 

## W ^ ^REC

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Revise d 03/0 7 (i « Permi t Fee :Cit y Exhibi t 1 1 EXCERP T FRO M TH E JANUAR Y 13,200 9 CIT Y COUNCI L REGULA RMEETIN G Xin . REQUES T B Y VENIC E JE T CENTER , LLC , T O CONSTRUC T ADDITIONA L HANGA RSPAC E O N IT S LEASEHOL D Jef f Boone , Boon e La

w Firm , representin g th e VJC , state dth e leas e allowe dconstructio n of hangar s o n lan dlease dby th e VJC an ddiscusse dfilin g th e buildin g permi t i n Ma y 200 8 and VJC' s first

presentatio n befor

e counci l in Augus t

2008 . Mr . Boon e adde dtha t VJ C include d additiona l informatio n wit

h th e constructio n plan s no t routinel y required . Mar k Beebe , projec t

architect , displaye ddrawing s anddescribe dplan s fo r constructio n o f

fou r 80-foot b y 100-foot

hangars . Scot t Richie , projec t

engineer wit h DM K Associates , displaye dasit e pla n anddiscusse d SWFWM D permitting . Mr . Boon e commente dthat th e projec t

was propose di

n a n are adesignate dfo

r hanga r construction . Discussio n followe dregardin g je t nois e an dexhaus t

mitigation ; there bein g ademan dfo r fou r hangars ; constructio n costs ; th e hanga r siz e bein g approximatel y 7,00 0 squar e feet ; th e Sarasot a Count y Sheriff s hanga

r containin g offic e space ; hanga r storag e capacity ; Ar

t Nade l bein g th e principa l owner ; constructio n plan s file dwit h th e city ; andth e leasehol dare aallowin g fo r constructio n of

facilitie s suc h a s propose dhangars . (4:06 ) E.G . Da

n Boone , attome y fo

r th e VJC , clarifie dth e owner s o f th e VJ C wer

e Ar t an d Pegg y Nadel . Mr . Boon e explaine dtha t th e leas e permitte dVJC , a s afixedbas e operator , t o buil dan dren t

aircraf t storag e spac e on Governmen t Us e (GU) zone dproperty . Discussio n continue dregardin g designate dhanga r areas , leas e allowance s pertainin g t o hanga r size , an dfire code s limitin g th e number o f hangars . Roge r Jemigan , Venic e Jet

Center , advise dtha

t Huffma n Aviatio n previousl y planne dto construc t 2 0 t o 3 0 t-hangar s o

n th e sam e parce l tha

t VJ C wa s proposin g constructio n of fou r 8,0(X)-foo t hangars . H e continue dtha t VJ C owne danother

2.5 3 acr e parce l o n th e eas t en dof th e fieldtha t woul dfit five additional 8,(X)0-foo t hangars . Respondin g t o Mr . Simmonds , Jef f Boon e indicate dth e parce l hadbee n unde r leas e sinc e 2(X)

6 an dVJ C signe dth e leas e to function a s afixe dbas e operato r (FBO) , an dstorin g ahcraf t i n hangar s wa s standardFB O procedure . Discussio n followe dregardin g th e VJ C losin g revenu e b y no t havin g aircraf

t storag e facilities ; th e entir e projec t

costin g approximatel y $1. 5 million ; financing; designate dhanga r locations ; th e Federa l Aviatio n Administratio n (FAA ) approvin g hanga r location ; leas e term s not

requirin g th e tenant t o file anois e abatement program ; VJ C takin g actio n t o decreas e noise ; waitin g lis t fo r hanga r space ; th e VJ C no t

bein g i n defaul t

of th e lease ; airpor

t lan duse ; an dconstructio n permitting . (4:39 ) Mr . Anderso n reviewe dlegal opinion s regardin g whether o r no t th e cit y hadauthorit

y to den y th e hangar

constructio n request , interpretatio n of minimumstandards , an dth e leas eEXCERP T FRO M TH E JANUAR Y 13,200 9 CIT Y COUNCI L REGULA RMEETIN G

permittin g constructio n of additiona l hanga r space . Mr . Anderso n continue dth e FA A conclude d tha t delayin g adecisio n unti l adoptio n of th e ne w Master

Pla n andAirpor

t Layou t Pla n (ALP ) wa s a n unreasonabl e dela

y of right s affordedto th e tenant , an dh e pointe dout th e cit y coul dfac e substantial ris k

of losin g alega

l action . Mr . Anderso n commente dtha t violatio n of

FAA grant assurance s woul dprobabl y no t trigger th e reversio n of

airpor t propert y t o th e city , bu t

th e cit y woul dmos t

likel y b e remove dft-omfedera l fundin g lists , an dthere migh t b e ademan dfo

r th e retu mo f fund s previousl y provide dt o th e city . H e state dther e were maintenanc e standard obligation s a s lon g a s th e aupor t wa s city-owned . Discussio n ensue dregardin g hanga r spac e designation s i n th e 200 0 ALP . Mr . Watt s displaye da

n ALP drawin g an dnote dexistin g an dpropose delements . Discussio n followe dregardin g th e FA A takin g bac k

th e airpor

t andairpor

t compatibilit

y wit h surroundin g areas . (5:17 ) To mGavlick , 13 0 Ri o Terra , hande dout a n ALP , Terminal Are aPlan , an dFAA Airpor t Complianc e Requirements , an dstate dth e cit y woul db e ou t

o f complianc e wit

h FAA complianc e requhement s i

f hanga r constructio n wa s approved . Ji mMarble , 83 2 Rober t Street , suggeste daddin g a n aircraf t storag e elemen t

t o th e Comprehensiv e Pla

n an durge dth e cit

y t o maintai n aunifie dwaitin g lis t fo r al l aircraf

t storag e requests . Earl Quandt , 21 8 Ri o Terra , discusse dkeepin g th e airpor t small . (5:34 ) To mBrener , 111 8 Bir dBa y Way , commente do n nois e abatement . Walte r Hake , 68 2 Pon dWillo w Lane , discusse dobjection s t o airpor t expansion . Te dKoszarski , 122 9 Lucay aAvenue , commente dtha t Mr . Sinamond s ma

y hav e aconflic t

o f interes t du e t o hi s busines s relationshi p wit h Mr . Boone . Jef f Boon e explaine dthat

Mr . Simmond s di dno t

hav e avotin g conflic t

o f interes t o n any matter that h e o r th e Boon e Law Fir

mwa s representing . Reces s wa s take n fi:om5:4 9 p.nt L unti l 5:5 9 p.m . Jef f Boon e displaye denlarge dexhibit s o f th e AL P an dAirpor

t Terminal Pla

n submitte db y Mr . Gavlic k

an dpointe dou t

th e AL P consiste do f

aserie s o f

map s depictin g area s specifie dfo r aeronautica l developmen t Mr . Watt s provide dadditional informatio n wit h regar dt o th e AL P an dpla n set , notin g tha

t th e definitio n of

aterminal are adi dno t

includ e wha

t coul db e buil t

there . Mr . Gavlic k

reiterate dtha

t th e are ai n questio n wa s designate da s termina l an dfutur

e apro n areas .EXCERP T FRO M TH E JANUARY 13,200 9 CIT Y COUNCI L REGULA RMEETIN G

Jef f Boon e state dth e propose dleasehol dare afor th e hangar s wa s no t

i n th e futur

e apro n area , an daddedthat

hi s clien t wa s oppose dt o fiirthe

r delays . (6:26 ) Discussio n followe dregardin g postponin g th e vote unti l th e FA A wa s mad e aware of argument s presente da

t today' s meeting . Mr . Lang move dt o approv e delaying th e vote to Februar y 10 , 200 9 in order

t o obtai n additiona

l inpu t fro mth e Federal Aviatio n Administratio n regardin g Venic e Je t Center's reques t

to constmc t additional hanga

r spac e o n it s leasehol dan dconstraint s of th e Airpor

t Layou t Plan . Seconde db y Mr . McKeon . ROL L CALL : MS . TAYLOR , YES ; MR . MCKEON , YES ; MR . SIMMONDS , NO ; MR . MOORE , NO ; MR . ZAVODNYIK , YES ; MS . LANG , YES ; MAYORMARTIN , YES . MOTION CARRIED .EXCERP T FRO M TH E FEBRUAR Y 10,200 9 CIT Y COUNCI L REGULA RMEETIN G

V . AUDIENC E PARTICIPATIO N (1:43 ) To mWest , 31 2 Circl e Drive , discusse delecte dofficial s responsibiUties . Joh n Patten , Venic e resident , commente do n speakin g t o counci l durin g audienc e participation . Her b Levine , 80 2 Harbor

Driv e South , discusse dspeakin g durin g audienc e participation . Rosemar y Vauzanges , 53 6 RivieraStreet , commente don airpor t development . Discussio n ensue dregardin g Venic e Jet Cente r (VJC ) investors . Vni . STATU S REPOR T REGARDIN G VENIC E JE T CENTER , LL C (VJC) , REQUES T T O CONSTRUC T ADDITIONA L HANGA RSPAC E O N IT S LEASEHOL D (continue dlate r thi s meeting ) Mr . Anderso n referre dto acop y o f hi s Februar

y 4 , 200 9 correspondenc e to Rebecc aHenry , FA A Plannin g Specialist , requestin g guidanc e wit h regardt o approval o

f th e VJ C reques t

to constmc t fou r additional hangars . H e adde dtha t th e city ha s no t

receive daresponis e t o date . Mayo r Marti n explaine dth e reques t include daconflic t

note dthroug h citize n inpu t wit h regardt o Airpor t Layou t Pla n violations . Subsequently , thi s issu e wa s pu t on hol dbecaus e th e VJ C wa s i n receivership . Mayo r

Marti n indicate dth e city wa s reviewin g aletter fro mth e receiver

askin g tha t th e FAA reques t

mov e forward . E . G . Da n Boone , representin g Burto n Wiand , receive r fo r th e VJC , requeste dtha

t counci l take actio n o n th e hanga

r request . Discussio n followe dregardin g sourc e of fund s use dto finance th e VJC , hanga r constmctio n site , sponso r obligations , andwha

t represent s violatio n o f

FAA regulations . Mr . Anderso n clarifie dtha t h e ha s no t

bee n advise db y th e receiver tha t h e intend s t o sel l th e VJC , LLC , leasehold . (3:22 ) Mr . McKeo n move dt o file a n entry o f

appearanc e o

n behal f o f th e Cit y of Venic e a s Landlordan db e notice do n al l proceedings . Th e motio n die dfor

lac k o f asecond . Discussio n continue dregardin g bein g proactive , sellin g th e VJC , receiver takin g over

avahd lease , pendin g actio n agains t Ar t Nadel , whethe r

o r no t th e cit y ha s standin g to file amotio n t o intervene , reprioritizin g city attome y tasks , negotiation s wit h th e receiver , scheduhn g a worksho p t o discus s airpor t issues , discussion s wit

h tenants , delayin g adecisio n on th e hangars , an ddecreasin g o r

increasin g th e valu e of

thi s asset . To mGavlick , 13 0 Ri o Terra , suggeste dinformin g th e FAA o f other designate dhanga

r location s andrequestin g i f

th e cit y hadth e right

to den y th e additional hanga r request .EXCERP T FRO M TH E FEBRUAR Y 10,200 9 CITY COUNCI L REGULA RMEETIN G

Discussio n continue dregardin g receivin g notificatio n i f th e VJ C i s sold , whether

or no t th e cit y i s acreditor , preservin g th e rights o f th e city , signin g o r

sublettin g of

leas e withou t

consen t of council , involuntar

y assignment , leasehol ddimensions , cit y attome y workloadandtime restrictions , an demplojfing outsid e counsel . (3:54 ) Ther e wa s consensus to instruc t th e cit y attome y t o determin e whether o r no t th e Cit y of Venic e ha s standin g to interven e in th e U.S . Securitie s andExchang e Commissio n action , t o determin e th e standin g of th e Cit y o f Venic e t o interven e i n th e receivership , andi f i t i s determine dth e cit

y ha s standing , t o mov e forwar dwit h appropriat e paperwor

k i n earl y March afte r th e Lorenz o trial . VHI . STATU S REPOR T REGARDIN G VENIC E JE T CENTER , LL C (VJC) , REQUES T T O CONSTRUC T ADDITIONA L HANGA RSPAC E O N IT S LEASEHOL D (continued ) Ms . Lan g requeste dcontactin g th e FAA regardin g other designate dhanga

r location s an dwhethe

r o r no t th e cit y ha s th e right

t o den y th e VJ C reques t

for additional hangars . Discussio n followe dregardin g clarifyin g issue s wit h th e FAA ; alternat e hanga r location s no t bein g identifie din th e leasehold ; leasehol dspecifyin g location s for improvements ; conveyin g impartialit y t o th e FAA ; meetin g leas e obligations ; receiver responsibilit

y t o protec t

an d maintai n th e asset ; needin g approva l t o constmc t

hangars ; languag e i n th e Febmar y 4 , 200 9 lette

r to Rebecc aHenry ; informatio n provide dt o Attome y To mDevin e t o assis t i n renderin g hi s lega

l opinion ; reviewin g Januar y 27 andFebruary 10 , 200 9 counci l meetin g minutes ; FAA respons e no t bein g definitive ; new circumstance s becaus e o f th e receivership ; additional hangar s triggerin g ne w leas e negotiations ; providin g additional informatio n t o th e FAA ; schedulin g a worksho p t o discus s airpor t direction ; hangar s promotin g additional je t aircraf t activit y acros s th e stree t fro mresidences ; workin g wit h D Y Consultants ; afutur e visio n for

th e airport ; th e receive

r sendin g notificatio n t o th e FAA ; an dth e leas e no t bein g acquire dwithou t

counci l approval . (6:54 ) Mr . McKeo n move dto approv e schedulin g acit y counci l worksho p in th e mornin g on Marc h 10 , 200 9 t o discus s th e lon g rang e visio n fo r th e airport . Seconde db y Mr . Zavodnyik . MOTIO N CARRIE D O N VOIC E VOT E UNANIMOUSLY . Ther e wa s consensu s t o includ e publi c commen t a t th e endof

th e Marc h 10 , 200 9 workshop . XH . CIT Y MANAGER' S REPOR T Ms . Woodle y provide dcounci l member s wit h aContingenc y Plan fo r Fixe dBas e Operator Service s provide db y th e Venic e Je t Center . XVn . REPOR T B Y MR . MOOR E Mr . Moor e commente do n Ite m4 o f th e Cit y Manager' s Repor

t an dsuggeste dplantin g additional shad e tree s in Centennial Park . H e als o commente do n landscapin g th e U.S . ByPas s 4 1 b y th e nort

h bridge . Ms . Woodle y responde dtha t th e airpor t landscapin g Reques t

fo r Proposal s wa s complete dandin th e revie w process , an dadde dsh e woul drevie w stat e landscapin g regulation s wit h regardt o th eEXCERP T FRO M TH E FEBRUAR Y 10,200 9 CITY COUNCI L REGULA RMEETIN G

U.S . ByPas s 41/nort

h bridg e are aenhancements . Discussio n followe dregardin g discussin g airpor t landscapin g a

t th e Marc h 10 , 200 9 workshop , Florid aDepartment

of Transportatio n lackin g fund s t o landscap e th e U.S . ByPas s 41/nort h bridg e area , enlistin g assistanc e ft-omVenic e Are aBeautification , Inc. , o r th e Venic e Are a Chambe r of Commerce , an dbudge t

allocation s fo

r landscaping . XVm . REPOR T B Y MR . SIMMOND S Mr . Simmond s hadn o repor t Respondin g to Ms . Lang , Mr . Watt s indicate dthat Venic e Aviatio n Service s wa s a n existin g fixedbas e operato r

maintenanc e faciht

y locate do n Airpor

t Avenue . Ms . Woodle y recommende ddiscussin g th e Contingenc y Pla n fo r FB O Service s provide db y th e Venic e Jet Center a t th e Marc h 10,200 9 workshop .EXCERP T FRO M TH E MARC H 5,200 9 CIT Y COUNCI L COMPREHENSIV E PLA N WORKSHO P Lan dUs e an

dDevelopment

- Housin g an dNeighborhoo dDevelopmen t Discussio n followe dregardin g staf f researchin g th e possibl e acquisitio n of airpor t leases , counci l bein g proactiv e in respec t to th e Venic e Je t

Cente r receivership , an

daddressin g thes e concern s durin g th e March 10 , 200 9 Airpor t Worksho p a

t th e Venic e Conununit

y Center , an dconsultin g staf f on creatin g apolic y tha

t eliminate s conditional us e fo r additiona l habitabl e height .EXCERP T FRO M TH E MARC H 5,200 9 CITY COUNCI L TOW N HAL L MEETIN G

I L QUESTIONS/COMMENT S FRO M TH E AUDIENC E Bruc e Lebedun , 50 8 Everglade s Drive , Golde n Beac h Associate s (GBA ) president , gav e th e membership statu s an

dbrief histor y of th e GBA , state dthei r

oppositio n t o expandin g th e Venic e Je t Cente r (VJC) , desir

e fo r aresolutio n to th e shor

t ter mrental issue , thanke dcounci l fo r al l thei r wor k on th e conprehensiv e plan , an dexpresse dhi s suppor t in settlin g th e sunshin e lawsuit . Te dVaughn , 204 Ri o Terra , gav e abrie f personal history , talke dabou t th e airpor

t disclosure when h e close do

n hi s house , expresse dhi s disma y wit h th e airpor

t nois e an dhi s suppor

t i n keepin g th e airpor

t recreational . Her b Levine , 80 2 S . Harbo r

Drive , expresse dhi s disappointment wit h recen t article s i n loca l newspaper s regardin g cit

y council . Earl Quand t

21 8 Ri o Terra , spoke in favo r of setfling th e sunshin e lawsuit , andcommende d counci l on their

wor k o n th e strategi c an dcomprehensiv e plans , th e airpor t maste r pla n and diversifyin g cit

y advisor y boards . Te dKoszarski , 1229 Lucay aAvenue , commente do n th e expertis e represente do n th e cit y counci l an dthanke dcounci l fo r thei r effort s t o kee p Venic e abeautifu l seren e plac e to live . Beb e Teichman , 40 4 Baynar dDrive , state dho w lovel y Golden Beac h i s to live , talke dabout th e amenitie s in joinin g th e GBA , an dtha t man y Golden Beach resident s joi n th e GB A t o obtai n thos e benefits . Rosemar y Vauzanges , 53 6 Rivier aStreet , talke dabou t th e sunshin e lawsuit , commente do n th e prope r recordin g o

f information , an dsuggeste dth e possibilit y o f th e cit y purchasin g the VJC . Mr . McKeo n reporte do

n th e item s for

discussio n a

t th e March 10 , 200 9 airpor t workshop , includin g airpor

t hangars , lon g ter

mplan for th e airport , andth e VJ C lease . Mayo r Marti n state dcounci l want s t o maintai n th e airport , th e airpor t worksho p wi

U b e hel da

t th e Venic e Communit

y Center , an dwelcome dCit y Manager

Isaac Turner .EXCERP T FRO M TH E MARC H 10.200 9 CIT Y COUNCI L AIRPOR T WORKSHO P

HI . DEFIN E ISSUE S AND LAN D US E SCENARIO S Mr . Watt s displaye daphot o of th e airpor

t from1949 an da

n aeria l ma p illustratin g existin g leaseholds , an dnote dth e airpor t i s zone dGovernment

Us e (GU) . Mr . McKeon displaye daerial map s illustratin g potentia l hanga r sites , discusse dstrategi c thinkin g o n th e propose dhanga

r locations , th e city' s allowanc e o f development

contiguou s t o th e airport , an dalternate airpor

t development

locations . H e suggeste dcounci l addres s tiieir desire s fo r th e 2 0 yea

r visio n concemin g hanga

r development . Discussio n followe dregardin g th e festiva l grounds , previou s Dufresne Henr y airpor t plan s fo r industrial use , relocatio n o f th e Venic e Je t

Cente r (VJC) , funding t o mov e existin g facilities , leve l of je t andhelicopter

activity , development

nea r mnwa y 4/22 , Florid aDepartmen t of Transportatio n (FDOT ) allowin g economi c development grant s up t o 80 % o

f th e tota l development

cos t havin g ftittir

e industria

l activit y fa r awa y fro mresidential , th e propose d narro w acces s roa

din Are a3 , an dnois e abatement purposes . Ms . Mastropier

i state dth e roadin Are a3 woul db e asecur e acces s roa

dtha t woul dno t

impac t aircraf t operations . Discussio n continue dregardin g constructio n standard s o f th e road , previou s discussion s o n airpor t development . Are a3 bein g alogical development area , numbe

r o f existin g t-hangars , preservin g th e golf

cours e an dfestiva

l grounds , chai n link

fenc e alon g wit

h store dvehicle s o

n th e northeaster

n airpor t propert y givin g th e appearanc e of ajun k yard , strategi c planning , mixe d us e in th e area , funding fo r development

plannin g i

n other area s o f th e city , revisitin g th e entrancewa

y to th e airpor

t alon g Airpor

t Avenue , requestin g D Y t o provid e conceptua l framework, fundin g sources , development o f a n emergenc y pla

n if th e VJ C i s no t

in operation , workin g wit

h th e VJ C receiver , th e cit y possibl y operatin g th e VJC , aviatio n fue l sales , an

d possibl e commercia

l development . Mr . McKeo n summarize dth e discussio n statin g th e share dvisio n woul db e t o utiliz e th e Dufresn e Heni y commercial par k plan , hav e th e highes t

priorit y sti^teg y fo

r Are a3 , havin g a lon g rang e aviatio n developmen t plan , usin g Are a2 a s a

n alternativ e t o Are a3 , andmaintainin g th e festiva l grounds . Mr . McKeo n move do

n t o th e propert

y management

segment . H e displaye dachar t depictin g current airpor t leases , reviewe dleas e expiratio n dates , vertica l improvement

clauses , cit

y staf f workin g o n anew standardize dlease , cit y contro l of

leases , standardize dtime fram e on leases , identifyin g astractur e t o reevaluat e aleas e upo n expiration , conductin g afai r market valu e analysis , an drenegotiatin g o n afive yea r basis . H e displaye dandreviewe dleas e example s an d talke dabout

streamlinin g th e leas e proces s t o make i t predictable . Discussio n followe dregardin g th e continuatio n of lon g ter mleases , cit

y constmctin g vertica

l improvement s an dofferin g shorte r ter mleases , staf

f currenti y workin g o n astandar dlease , whether i t i s profitabl e for

th e city t o constmc t

vertica l improvements , th e cit

y losin g revenu e on subleases , condition s i n th e pas t allowin g th e lesse e t o buil dth e vertical improvements , th e cit yEXCERP T FRO M TH E MARC H 10.200 9 CIT Y COUNCI L AIRPOR T WORKSHO P

seekin g abon dt o construc t vertica l improvements , beginnin g wit h constmctin g atermina l i n Are a3 , definitio n of

aterminal , revenue s i

n th e airpor

t enterpris e fund , andth e visio n t o contro l airpor t lan dandvertical assets . Discussio n continue dregjirding th e orde r o f th e agend aa s i

t pertain s t o audienc e participation . Mr . Simmond s lef

t th e meetin g a

t 9:5 9 a.ra . andreturne da

t 10:0 8 a.m . IV. MASTE RPLAN OVERVIE W Mr . Ya p outline dD Y Consultants ' rol e a s listenin g t o cit y an dpubli c concerns , state deveryon e shoul dremai n ope n minde dan dreac h aconsensu s betwee n th e cit y andpublic , an dsettl e th e question s regardin g critical aircraft . Ms . Mastropier

i reporte da

n aircraf t operation s coun t

ha s bee n implemente dthat include s si x camera s on th e airfield , explaine dth e camera s operation s an ddat atransmission , alon g wit h th e leve l of dat adetai l an dtyp e of

aircraf t activit y captured . Sh e mentione dth e targe t dat e fo r nex t airpor t worksho p woul db e Apri l 7 , 2(X)9 . Mr . Ya p outline dth e purpos e andscop e fo r th e nex t workshop , which encompasse s ageneral visio n o f th e airport . Discussio n followe dregardin g counci l consensu s t o maintai n ageneral aviatio n airpor t creatin g apositiv e atmosphere , determinin g th e major point s o f agreement s an ddisagreements , reviewin g th e impact s t o th e community , addressin g th e adherenc e of th e Auport

Layou t Plan (ALP) , recent conversation s wit

h th e Federa

l Aviatio n Administratio n (FAA) , modification s to th e current ALP in orde r

t o execute th e master

plan , resubmissio n of

th e ALP t o FAA , contac t wit h FA A regardin g th e VJC , incorporatui g specifi c languag e regardin g aeronautical an dnon aeronautical use s in th e ALP , nois e relate dconcerns , hehcopte r activity , earl y momin g flights, talkin g t o pilot s regardin g nois e abatement procedures , coordinatio n of ho t lin e complaints , time s o f complaint s an dcurren t

airpor t respons e t o complaints . Reces s wa s taken from10:2 9 a.m . unti l 10:3 7 a.n xEXCERP T FRO M TH E MARC H 10,200 9 CIT Y COUNCI L REGULA RMEETIN G

IV . VENIC E JE T CENTER , LLC , REQUES T T O CONSTRUC T ADDITIONA L HANGA RSPAC E O N IT S LEASEHOL D - FAILE D Burto n Wiand , attome y an dreceiver fo r th e Venic e Je t

Center (VJC) , explaine dhi s rol e an d urge dcounci l member s t o approv e hanga r constmctio n i n order

t o maximiz e VJ C asset

value . Mayor Martin summarize dcounci l members ' concern s regardin g th e hangar s bein g propose do n alocatio n identifie dfo

r other purposes , guaranteein g th e apphcan t hadfinancial resource s t o buil dhangars , an dth e cit

y havin g avali dleas e wit

h th e VJC . Mr . Simmond s move dt o permi t Venic e Jet

Center , LLC , t o construc t additiona l hanga r spac e o n it s leasehol da s depicte don th e conceptua l plan . Seconde db

y Ms . Taylor . Mr . Wian dresponde dtha t th e VJ C leas e wa s entere dint o b y avali dentity , discussion s wit h financial institution s regardin g availabilit y o f constructio n fiinds wa s encouraging , an dh e woul d assure th e financial viabilit y of prospectiv e owners . Mr . Wian dinvite dcounci l member s l o visi t hi s web site , www.nadelreceivership.co mto revie w cour t fihngs, etc . Mr . Anderso n reviewe dpreviou s correspondenc e t o Mr . Wian drequestin g tha t th e cit y b e kep t informe dof

al l futur e development s regardin g VJ C including , bu t no t limite dto , busines s operations , financing andconstmctio n of additional leasehol dimprovements , an dproposal s t o sel l o r transfe r any ownershi p interest . Mr . Wian dresponde dthat acces s to thi s informatio n wa s available , however , areques t t o b e "insid e th e company " coul dno t b e granted . Wit

h regardt o th e reques t

relatin g t o finances, Mr . Wian drepUe

dtha t absent financing, th e hangar s woul dno t b e buil t Mr . Anderso n an

dMr . Wian ddiscusse dth e city' s authorit y under term s o f th e leas e andMr . Wiand's authorit y under th e receivership . Mr . Wian dassure dtha t cit y official s woul db e notifie dwhen h e too k step s t o marke t th e property . Mr . Anderso n clarifie dtha t counci l wa s requestin g acknowledgment tha t th e cit y wa s aplaye r

regardin g dispositio n o

f thi s asse t an dwante dassurance s tha t th e cit y woul d b e kep t informe dregardin g decision s such a s marketin g o f th e asse t o r chang e i n operations . Mr . Wian dreiterate dth e cit

y coul dno t

b e aparticipan t

in VJ C operation s whil e it wa s in hi s receivership . Discussio n continue dregardin g th e cit y bein g proactiv e in VJ C busines s operation s andth e cit y bein g apotential purchaser . Mr . Anderso n discusse dasecon dletter writte n t o Mr . Wian dregardin g th e VJ C providin g sufficien t evidenc e o f

it s financial capabiht

y t o construc t

th e propose dleasehol dimprovements . Mr . Wian dresponde di t

wa s unlikel y h e woul dus e investo r fund s t o constmc t

hangars , an

d pointe dou t

tha t financing ma

y b e forthcomin g from apotentia l ne w owner . Discussio n followe dregardin g th e judg e makmg th e final decisio n regardin g apiu-chaser , workin g cooperativel y wit h auport tenant s t o develo p a20-yea r vision , ne w hanga

r viabilit y study , andhanga

r rental income no t

goin g t o th e airpor

t enterpris e fund . Detaile ddiscussio n continue dregardin g th e VJ C leas e containin g clause s tha t permi t buildin gEXCERP T FRO M TH E MARC H 10,200 9 CIT Y COUNCI L REGULA RMEETIN G

new hangar s an

drequire evidenc e o

f financial capabilit

y t o constmc t

leasehol dimprovements . (4:09 ) Mr . Anderso n indicate dthat Paragrap h 1 4 of

th e VJ C lease . Us e o

f Premises , cam e closes t t o affording a

n opportunit

y t o constmc t

additional hangars . E.G . Da n Boone , representin g th e VJC , claime dtha t th e minimu mstandard s portio n of th e leas e allowe dfo r constmctio n of

additional hangars . Mayor Marti n suggeste dguaranteein g financial viabilit y an doption s t o buil dhangar s o n asit e more preferabl e to th e cit

y woul dclea

r u p anumber

o f issue s associate dwit

h thi s project . Mr . Wian dindicate dh e wa s requestin g th e releas e o f buildin g permit s a

t thi s time , an d questione dwhether

o r no t afinancial viabilit

y claus e wa s include din buildin g codes . H e continue dthat

hangar s woul dno t

b e buil t i f financing wa s no t

available . Discussio n followe dregardin g coimci l takin g actio n o n thi s issue , th e abiht y t o constmc t hangars , increasin g th e valu e o f thi s asse t

approvin g hanga

r constioiction subsequen t t o identifyin g avali dpotential buyer , andcontingencie s regardin g financial viabihty . Mr . Anderso n clarifie dtha t Mr . Wiandwa s requestin g th e landlord' s approva l fo r th e tenan t

to construc t fou r 8,00 0 squar e foo t

hangars , that

approval woul denhanc e th e asset , that th e asse t coul db e markete da s afixedbas e operatio n wit h di e potentia l o f

constmctin g th e hangars , and , i f financial capabilit

y wa s shown , th e cit

y woul dissu e abuildin g permit . Discussio n ensue dregardin g issuin g buildin g permit s prio r to submittin g plan s an dgoin g throug h th e applicatio n process , recoupin g investo r funding , an drespondin g to Mr . Black' s Jime 200 8 letter . Mr . Turne r

indicate dthat

hanga r plan s wer e subnnitted , an dstaf f approva l wa s dependen t

upo n counci l endorsin g th e VJ C constmctio n reques t (4:30 ) Ji mMarble , 83 2 Rober t Street , requeste dinformatio n wit h regardto hanga

r financial viabiUty . Gar y Budway , 195 3 Setdemen t Road , requeste ddisclosur e o f Nade l investors . Te dKoszarski , 122 9 Lucay aAvenue , questione dif th e VJ C wa s acquure

dwit h il l gotte n gains . Mik e Rafferty , 98 9 Cayma

n Avenue , requeste dtha t

name s o f Nade l investor s b e provided . To mGavUck , 13 0 Ri o Terra , suggeste dthat th e cit y ge t alegal opinio n regardin g th e validit y of th e VJ C lease . Bob Bumis , cit

y busines s ovraer , questione dth e nee dfo r hangars . Walter Hake , 68 2 Pon dWiUo

w Lane , urge dcounci l member s no t t o approv e constmctio n withou t aguarante e o f

wha t typ e of plane s woul db e accommodated .EXCERP T FRO M TH E MARC H 10,200 9 CIT Y COUNCI L REGULA RMEETIN G

Beb e Teichman , 40 4 Baynar dDrive , requeste dthat

counci l member s approv e th e constructio n reques t To mBrener , 111 8 BirdBa y Way , questione dwhether thi s wa s a

n involuntar

y transfer of th e lease . Ms . Lan g presente dquestion s regardin g th e Nadel C investors , th e leas e bein g in default , evidenc e o

f need , marke t

analysis , an dstaf

f recommendations . Ms . Woodley explaine dtha t staf f wa s instmcte dt o revie w concep t plan s fo r fata l flaws. Afte

r eliminatin g afifth footprint an dreconfigurin g t o mee t

Southwes t

Florid aWate

r Management Distric t (SWFWMD) , plan s went throug h technical revie w fo r Governmen

t Us e zonin g violations . Site plan s hav e als o bee n submitted , however , staf f wil l no t issu e comment s unti l counci l approva

l of th e conceptua

l plan . (5:02 ) Mr . Wian dcommente dtha t investo r name s wer e no t

publishe dandinvestment

fund s wer

e no t use dt o purchas e th e VJC , an dnote dthere wa s n o transfe r of th e lease , tha

t al l material portion s o f th e leas e wer e observed , andofferedassuranc e of builder viability . Discussio n followe dregardin g th e motio n language . ROLL CALL : MR . MOORE , NO ; MS . TAYLOR , YES ; MS . LANG , NO ; MR . ZAVODNYIK , NO ; MR . MCKEON , YES ; MR . SIMMONDS , YES ; MAYORMARTIN , NO . MOTION FAILED . XVI . REPOR T B Y MR . MOOR E Mr . Moor

e discusse dth e validit

y of th e existin g VJ C lease , i f th e leas e allowe dhanga r constmction , whether

o r no t th e lesse e defaulte do n th e lease , an dsuggeste dretainin g a

n exper t to rende r a n opinion . Discussio n followe dregardin g th e VJ C leas e bein g valid , verbiag e tha t allow s constmctio n o

f additional hanga

r space , minimu mstandard s language , possibl e frauddurin g procurement o f th e VJC , an dfinancial viabilit y of aVJ C purchaser . (6:23 ) Mr . Simmond s spoke i n oppositio n t o obtainin g a n outsid e legal opinion . Discussio n continue dregardin g purchasin g th e leas e an denterin g int o aleas e wit h a n LLC . Ther e wa s consensu s t o direc t th e city attome y t o engag e outsid e counse l i n Sarasot aCount y wit h expertis e i n commercial lease s t o render a n opinio n regardin g if

th e Venic e Je t

Center leas e i s vali dandentitie s constmctio n o f hangars , i

f fraudulent

fund s negate th e lease , an dth e city' s abilit y unde r th e minimu mstandard s fo r financia l viabihty . Discussio n continue dregardin g th e city' s interes t in purchasin g th e VJC . Mr . Turne r

indicate dtha

t staf f bega n researchin g th e possibiht y of purchasin g th e VJ C an

d clarifie dtha

t staf f wa s no t preparin g aproposal .EXCERP T FRO M TH E MARC H 10,200 9 CIT Y COUNCI L REGULA RMEETIN G

Mr . Anderso n cautione dcounci l wit h regar dt o takin g action s tha t affect th e valu e o f

th e leasehol dandbecomin g a

n activ e bidde r

for th e VJC .EXCERP T FRO M TH E MARC H 24,200 9 CIT Y COUNCI L REGULA R MEETIN G XVn . REPOR T B Y MR . MCKEO N Respondin g to Mr . McKeon' s question s regardin g th e Venic e Je t Center (VJC) , Mr . Anderso n indicate dtha

t he , Mr . Turner , an

dMayor Marti n formulate dquestion s fo r submitta l to outsid e counsel . Mr . Anderso n continue dwit h arevie w of

attome y conflic t of interes t checks , notin g tha

t hi s relationshi p wit

h Northe mTms t

di dno t conflic t wit h hi s representin g th e cit

y on VJ C matters . XVm . REPOR T B Y MAYO RMARTI N Mayor Martin brough t

counci l up t o dat e o

n conversation s wit

h Bar t Vemace , FA

A Orlando Actin g Manager , regardin g th e FA A permittin g take off

s an dlanding s o

f heavy plane s o n Runwa y 4/22 , th e extensio n o

f Runwa y 4/22 , modification s to th e Venic e Gol f Association , andtimin g o f counci l action s relate dt o th e Venic e Je t Center . Respondin g t o counci l concern s concemin g aPar t 1 6 complaint , Mr . Anderso n reviewe d correspondenc e t o Burto n Wiand , attome y andreceiver fo r th e VJC , regardin g respondin g to counci l request s for informatio n concemin g VJC , LLC . I n addition , Mr . Turner

advise dthat

staf f woul dhol dof

f on inquirie s regardin g th e cit y acquirin g th e VJ C leas e unti l afte r outsid e lega

l counse l rendere dthei r

opinion .EXCERP T FRO M TH E APRI L 14,200 9 CIT Y COUNCI L REGULA RMEETIN G

XXn . REPOR T B Y MR . SIMMOND S Mr . Simmond s commente do n mid-mnwa y takeoff s affectin g traffi c counts . Mr . Watt s indicate dtha

t camera s wer

e probabl y missin g afe

w takeoffs , however , discussion s wer e underwa y wit h consultant s regardin g repositionin g th e cameras . Respondin g to Mr . Simmonds , Mr . Anderso n discusse dcorrespondenc e fromBurto n Wiand , receiver fo r Venic e Je t

Cente r (VJC) . Discussio n followe dregardin g VJ C assets .EXCERP T FRO M TH E APRI L 30.200 9 STRATEGI C PLAN WORKSHO P F . Strategi c Goa l No . 6 , Maintai n aGrowin g Divers e Ek»nomy Mr . Snyder

reviewe dth e strategie s o

f Strategi c Goal No . 6 wit

h th e exceptio n o

f Strateg y No . 5 , which wa s outline dby Airpor t Directo r Fre dWatts . i ' Discussio n ensue dregardin g approva l of tw o hotel s in th e vicinit

y o f 1-7 5 an dtw o o n th e Island . Afte r Mr . Watts ' presentation , discussio n ensue dregardin g locatio n o f th e specia

l event s area , development

interferin g wit

h futur e airpor t operations , funding th e propose dpurchas e of th e Venic e Je t

Center (VJC) , takin g aproactiv e positio n concemin g th e purchas e o f th e VJC , nois e abatement program . Wes t

Coas t Inlan dNavigatio n Distric t ownin g aright-of-way o f approximatel y 100 fee

t wes t of th e Intracoastal Waterway , endangere dwildUfe , circu s aren a property , increasin g parking , acces s t o U.S . Busines s 41 , relocatio n o f U.S . Pos t Offic e into th e circu s aren aproperty , hanga r constmction , receivin g aVJ C marketin g packe t fro mBurton Wiand , utilizin g th e VJ C a s arevenu e source , prohibitin g certai n type s o f jets , an densurin g tha

t circu s aren adevelopment

comphment s th e propose dVenic e Islan dResor t & Sp adevelopment . Mayor Marti n requeste da

n updat e fromstaf

f wit h regardto funding source s fo r redevelopment o f th e circu s aren aare aan

dacces s roa

dto U.S . Busines s 41 .EXCERP T FRO M TH E MA Y 12,200 9 CITY COUNCI L REGULA RMEETIN G

XII . CIT Y MANAGER' S REPOR T Mr . Turne r

reviewe daletter

andpacke t

o f informatio n fromBurto n Wiand , receiver fo r th e VJC , regardin g entitie s intereste di n purchasin g th e VJ C an dit s assets . And y Magenheimer , appraiser wit h Slack , Johnston , andMagenheimer , Inc . recommende dagains t obtainin g a

n appraisa l du e to possibl e lega

l actio n regardin g intentional devaluatio n of th e VJ C lease . Mr . Tumer aske d Mr . Magenheimer

no t t o perfor mth e appraisal unti l issue s regardin g hanga r constmctio n an

d acquirin g a

n outsid e opinio n fro

mCharle s J . Bartiett , IcardMerril l et . al , regardin g th e leas e by andbetwee n th e Cit

y of Venic e an

dVJC , LLC , wer e brought before council . Mr . Turner als o note dtha t h e andMr . Magenheime

r discusse dth e right

of first refiisa l i f another entit y purchase d th e VJC , andpointe dout

tha t Mr . Wian dwoul dprobabl y no t b e intereste din thi s unles s counci l approve dth e hanga

r reques t Mr . Tume r

recommende dwaitin g fo

r th e outsid e opinio n befor e counci l proceede dwit

h developin g aproposal fo r acquisitio n of

th e VJC . Respondin g to Mr . Zavodnyik , Mr . Tume r indicate dtha

t state statute s relativ e t o sunshin e law s andconfidentialit

y agreement s were no t

applicabl e t o th e cit

y havin g acces s t o material s disseminate dto potential purchaser s of th e VJC . Discussio n followe dregardin g confidentialit y agreement s confhctin g wit h Sunshin e Laws , avoidin g potentia

l lawsuits , obtainin g th e Cit y Attorney' s opinio n wit h regardto propert

y appraisals , th e cit

y interferin g wit

h function s o

f th e receiver , an

dprotectin g th e city' s interests . Mr . Anderso n advise dh e schedule dameetin g on Friday , Ma y 15 , wit h Mayor Marti n an

d Mr . Tume r

to discus s signin g th e confidentiaht y agreemen t

an dobtainin g a

n appraisal . XVra . AUDIENC E PARTICIPATIO N (3:58 ) E . G . Da

n Boone , attome y fo

r th e VJ C receiver , clarifie dstatement s mad e b y John Patten regardin g previou s owner s of th e VJC . Mart y Dover , 74 0 White Pin e Tre e Road , urge dcounci l no t t o restric t

pubU c parkin g i

n downtow n Venice . Mayor Marti n responde dtha

t counci l aske dstaf

f t o giv e priorit

y t o developin g additiona l parking . Her b Levine , 80 2 Harbo r

Driv e South , aske di

f Housin g andUrba

n Development

(HUD ) woul d b e involve dwit

h Grov e Terrac e afte

r completio n of

th e redevelopment

an di f th e cit y woul d continu e t o collec t

taxes . Ms . Lan g responde dthat

HU D woul dcontinu e to b e involve dwit h th e propert

y whic h woul db e owne db y th e Venic e Housin g Authority . Mr . Anderso n indicate dtha t in Ue u o f taxe s th e VH A woul dmake apaymen t t o th e Cit

y o f Venice . Mr . Levin e commente don di e shor t termrenta l ordinanc e an dth e VJC .EXCERP T FRO M TH E MA Y 12,200 9 CIT Y COUNCI L REGULA RMEETIN G

Joh n Patten , Venic e resident , discusse downer s of th e VJC . XrX . ADJOURNMEN T Ther e bein g n o furthe

r busines s t o come before council , th e meetin g wa s adjoume dat 4:1 3 p.m .MINUTE S O F A SPECIAL MEETING CIT Y COUNCIL , VENICE , FLORID A MAY 26,200 9 A Specia l Meetin g of

th e Cit y Counci l wa s hel dthi s date in Counci l Chamber s a t Cit y Hall . Mayor Marti n calle dth e meetin g t o order a t 10:3 6 a.m . ELECTE D OFFICIAL S AN D OTHER S PRESEN T Rol l wa s calle dwit

h th e followin g electe dofficial s present : Mayor EdMartin , Vic e Mayo

r Su e Lang , an dCounci l Member s Ki t McKeon , John K . Moore , Joh n Simmonds , an d Emi e Zavodnyik . Vick

i Taylor wa s absent . Als o present : Cit

y Attome y Bo b Anderson , Cit y Cler k Lor i Stelzer , Cit

y Manager

Isaac Turner , Financ e Directo r

Jef f Snyder , an

dRecordin g Secretar

y Jud y Gamel . I . COUNCI L DISCUSSIO N - VENIC E JE T CENTE R(VJC ) LEAS E Mr . Anderso n provide dbackgroun dinformatio n on outsid e lega l opinion s andcorrespondenc e fro m Burto n Wiand , VJ C receiver , an dth e Federal Aviatio n Administratio n (FAA) . Mr . Tume r

requeste ddirectio n fromcounci l regardin g obtainin g a n appraisa l o f th e VJC . Mayor Marti n reviewe dattorney Charle s Bartiett' s opinio n concemin g five question s submitte db y Mr . Anderso n o n behal f

of cit y council . Discussio n followe dregardin g counci l members ' understandin g o f Sectio n 4 5 of

th e VJ C lease , DemoUtio n andConstmctio n of

Improvements , o f

th e VJ C leas e regardin g th e lessee' s right t o constmc t fou r additional hangars . Mr . Anderso n advise dtha t par t of th e leasehol dwa s undevelope dlan dan dindicate da

n argument coul db e mad e wit

h respec t to wh y leas e vacan t

lan dfo r 3 0 year s without

apla n to develo p i t

fo r aviatio n purposes . Mr . Anderso n als o reviewe dportion s o f Mr . Bartiett' s letter

an dindicate dther

e wa s n o definitiv e statement a s to whether

o r no t th e leas e preclude dadditional hangar s o r allowe d additional hangars , an dadde dtha t litigatio n wa s th e only wa y t o mak e tha t determination . (11:02 ) Ms . Lan g discusse dmotive s fo r acquirin g vacan t

land ; leas e term s remainin g basicall y unchange di n th e ne w lan dleas e approve da t th e Ma y 23,200 6 counci l meeting ; plan s for hangar s no t bein g presente dfor

approval ; reason s t o den y constmctio n of additiona l hangars ; an

d requestin g financial informatio n fro

mdi e VJC . Mr . Simmond s commente do n Rebecc aHenry' s December 14 , 2008 , lette r

an dwarne dof

the possibility o f

aPar t 1 6 investigatio n i

f th e hangar s were no t

approved .Mayo r Marti n mentione dtha

t additional fact s were brough t ou t subsequen

t t o Ms . Henry' s letter

an d indicate dth e cit

y an dth e FAA , no t

th e receiver , woul dbea

r expense s fo

r aPar t 1 6 investigation . (11:15 ) Discussio n followe dregardin g th e leas e requirin g submitta l o f specification s prio r

t o hanga r construction ; submitta

l of concep t plans ; demonstratin g financial viability ; paro l evidence ; counci l approvin g hangar s subjec t t o subsequent

verificatio n o f

financial viabihty ; leas e affordin g th e discretio n t o promote VJC' s sel f interest ; goo dfait

h obligations ; th e cit

y purchasing th e VJC ; claim s o f th e cit y intentionall y lowerin g th e valu e o f th e VJC ; demonstratin g anee dfo r additional hangars ; approvin g additional hangar s a s par t of th e Join t Automate dCapita

l Improvemen

t Progra m(JACIP) ; hanga r utilization ; FA

A acknowledgin g th e nee dfor additional hangars ; th e leas e no t bein g clea

r in definin g obhgation s of

parties ; receiver

no t respondin g t o th e city' s reques t fo r financial data ; takin g acours e o f

actio n wit

h th e leas t obstacles ; andlegal actio n agains t th e city . n . AUDIENC E PARTICIPATIO N (12:06 ) To mGavhck , 13 0 Ri o Terra , commente do n providin g financial viabiUt y an dAirpor

t Layou t Pla n designation s fo

r futur e hangars . Henr y Holzapfel , 21 4 Ri o Terra , discusse dreceivin g proo f o f financial capability , improvin g leas e agreements , an ddeaUn

g wit h th e FAA . Mike Rafferty , 98 9 Cayma n Avenue , hande dou t

an ddiscusse dinformatio n regardin g Venic e Municipal Airpor

t operations . E . G . Da n Boone , representin g Burto n Wiand , commente do n th e likeUhoodof th e cit y winnin g Utigation , lega

l costs , submissio n o f

concep t plans , rebuildin g th e VJ C administratio n building , hangar s housin g al l type s of aircraft , an dprovidin g evidenc e of financial capabihty . i n . ADJOURNMEN T Ther e bein g n o furthe

r busines s t o com e before council , th e meetin g wa s adjourne da t 12:2 9 p.m .

ATTEST : Mayor - Cit y o f Venic e

Cit y Cler kEXCERP T FRO M TH E JUN E 9,200 9 REGULA RMEETIN G

X . REVISI T CIT Y COUNCI L DECISIO N REGARDIN G TH E VENIC E JE T CENTE R(VJC ) REQUES T T O CONSTRUC T ADDITIONA L HANGAR S Respondin g t o Mr . Moore , Ms . Depew clarifie dprocedur e regardin g motion s to revisi t an dto reconsider previou s counci l action . Henr y Holzapfel , 21 4 Ri o Terra , urge dcounci l to deny th e hanga r constructio n reques t

du e to th e existin g leas e no t

containin g languag e relatin g t o constmctin g additiona l hangars . Randal l Greene , 75 0 Villa s Drive , supporte ddenial of th e reques t

an dcommente do n problem s tha t additional hangar s an

dai r ti-affic woul dcreate . (2:29 ) Mik

e Rafferty , 98 9 Cayma

n Avenu e Eas t

displaye dan

dreviewe ddocument s representin g 25 7 communit y member s wh o oppos e constmctio n of aircraf t storag e hangar s alon g Aiiport

Avenue . Chri s Davis , 34 0 Shor

e Road , oppose dhanga

r constmctio n an

ddiscusse dexistin g us e o f th e propose dhanga

r site . Ji mShortill , 22 2 Ri o Terra , state dtha t counci l mus t

mak e allowance s fo

r growt h if th e auport i s to prosper . Rosemar y Vauzanges , 53 6 RivieraSfreet , hande dout an ddiscusse dFedera

l Aviatio n Administratio n (FAA ) regulation s fo r Par t 1 6 - Rule s of

Practic e fo

r Federally-Assiste dAirpor t Enforcement

Proceedings . E . G . Da n Boone , attome y representin g Burto n Wiand , receiver fo r th e VJC , informe dcounci l member s tha

t h e wa s speakin g o

n behal f o f Mr . Wian dan

dadvise dtha

t federa l authoritie s authorize dMr . Wian dt o file aPar t 1 6 actio n if

hanga r constmctio n wa s no t

approved . John Patten , Venic e residen t discusse dth e existin g VJ C leas e approva l process . (2:57 ) Mr . Simmond s displaye dandrea dLind aandMike Rafferty' s e-mai l requestin g suppor t fo r council' s previou s denia l of th e VJ C applicatio n fo

r new aircraf

t storag e hangar s alon g Airpor t Avenue . Mr . Simmond s als o reviewe dth e Venic e Municipa l Golf Cours e leas e an

d discusse dPar

t 1 6 an dPar

t 1 3 investigatio n procedures . Mr . McKeo n commente do n th e validit

y o f th e VJ C leas e an

dth e reques t

t o constmc t additional hangars , an

dals o discusse dth e propose dhanga r locatio n an

dth e lac k

o f communicatio n wit

h Mr . Wiand . Respondin g t o Mayor

Martin , Mr . Tume r

discusse dinforma

l communication s wit

h Roger Jemigan , VJC , regardin g propose dhanga r location s andprovidin g th e cit y wit h aright of firs t refusal , an dadde dtha

t Mr . Jemigan never

provide dadefinitiv e answer . Mr . Anderso n advise dcounci l member s concemin g communication s wit h Mr . Wian dan

d indicate dthere were n o substantiv e negotiation s regardin g th e hanga r reques tEXCERP T FRO M TH E JUN E 9,200 9 REGULA RMEETIN G

Mr . Tume r

reporte dtha

t staf f performe datechnica l revie w o f conceptua

l plans , elevations , an

d survey s include di

n th e agend apacke t

and , prio r

t o issuin g counci l approve dpermits , woul d reques t final drawing s fo

r submissio n an dapproval b y council . Discussio n followe dregardin g FA A reviewin g propose dhanga r plans , revisio n b y ane w VJ C owner , financial feasibiUty , buildin g permi t approval process , propose dhanga r relocation , modification s t o th e existin g lease , ability o f th e VJ C t o engag e i

n negotiations , receiver activel y marketin g th e leasehol dt o athir dparty , negotiatin g relocatio n o f propose dhangar s wit h VJ C purchaser , an

drequirin g cit

y approval of

leas e assignments . (3:22 ) Mr . Anderso n confirme dtha t th e city ca

n perfor mdu e diligenc e whe n th e receiver disclose s apurchaser

an dals o tha

t th e cit y ca n reques t proo f o f financial capabihty fro

m anyon e desirin g to constmc t hangars . Mr . Tume r

commente do

n th e forma

l FA A Airpor

t Layou t Pla n (ALP) revisio n process . Mr . Tume r

lef t th e dai s from3:27 p.m . unti l 3:3 1 p.m . Mayo r Marti n discusse dsubmittin g ahanga r concep t pla n to th e FA

A wit h detail s regardin g wh y city di dno t

favo r approval , FAA approval of th e propose dhangars , lessenin g th e city' s exposur e t o possibl e lawsuits , andretainin g option s fo r du e diligenc e an

dproo f o f financial capability . Mr . Anderso n discusse dth e city' s optio n t o deal wit h th e actual purchaser

of th e VJ C an

dth e actua l develope r

o f th e hangar s versu s conditiona l approval fo r propose dconstmctio n fo r th e purpos e of

enhancin g propert

y value . Discussio n ensue dregardin g suppositio n that th e cit y i s delayin g constmctio n approval , Mr . Wiand' s lac k

of communicatio n wit

h th e city . Par

t 1 6 legal action , an dFA A directive s regardin g hanga

r approval . Mr . Anderso n advise dcounci l t o expec t aPar t 1 6 complaint

i f th e previou s denia l of

th e hangar s reques t

wa s reaffirmed . Counci l member s discusse drespondin g t o aPar t 16 , whether

o r no t th e pre-condition s fo

r a Part 1 6 hav e bee n met , th e cit y bein g mor e proactive , communicatin g wit h Mr . Wiand , right

of firs t refusal , acquisitio n of

th e VJC , an dproperty appraisals . (3:54 ) Mr . Simmond s move dto permi t th e Venic e Je t

Center , LLC , t o constiiic t additiona l hanga r spac e o n it s leasehol da s depicte do n th e conceptual pla n presente dtoday . Seconde db y Ms . Taylor . Mr . Moor e submitte dtha t Mr . Simmonds ' motio n wa s ou t of order , andsuggeste dtha t th e motio n shoul db e t o rescin dcounci l actio n o f Marc h 10,200 9 t o den

y hanga r constmction . Mr . Simmond s withdre w th e motion . Mr . Simmond s move dto rescin dth e actio n tha t counci l too k

on March 10 , 2009 . Seconde dbyEXCERP T FRO M TH E JUN E 9,200 9 REGULA RMEETIN G

Ms . Taylor . Ms . Lan g expresse doppositio n to th e motio n t o rescin dcounci l actio n o f March 10 , 2009 . Mr . Anderso n clarifie dUia t counci l actio n of

Marc h 10 , 200 9 denie dconstmctio n o f fou r hangars , an

din order

t o revers e tha

t decision , approval to rescin dth e Marc h 1 0 vot e wa s necessary . ROL L CALL : MR . SIMMONDS , YES ; MR . MCKEON . NO ; MR . ZAVODNYIK , NO ; MR . MOORE , NO ; MS . TAYLOR , YES ; MS . LANG , NO ; MAYORMARTIN , NO . MOTIO N FAILED . Mr . McKeo n move dt o du-ec t Mr . Anderso n an dMr . Tume r t o engag e i n goo dfait h negotiation s wit

h Mr . Wiandin a

n attemp t t o resolv e conflict s resultin g fromtoday' s vote i n order t o reac h a

n outcome mutually beneficia l t o bot h th e cit y an dMr . Wiand . Seconde dby Mr . Zavodnyik . Respondin g to Mr . Anderson , Mayo r Marti n propose ddiscussion s regardin g hanga r relocation , th e cit y biddin g o

n th e VJC , an

da n optio n t o matc h th e winnin g bid . Counci l member s explore dtopic s open fo r discussio n wit

h Mr . Wiandincludin g enhancin g th e leas e value , acquirin g th e lease , th e confidentialit y agreement

puttin g th e cit

y i n conflic t

wit h pubU c record s laws , andbiddin g o n th e VJC . Respondin g t o Mayor

Marti n indicatin g that

avote o n Mr . McKeon' s motio n wa s not neede d an dtha t counci l shoul ddirec t

Mr . Anderso n an dMr . Tume r t o follo w up wit

h ameetin g wit

h Mr . Wiand , Mr . Simmond s state dh e wante dth e recordto reflec t tha t h e objecte dto anythin g bu t approval o f

Mr . McKeon' s motion . Mr . Simmond s move dtha t Mr . Anderso n an dMr . Tume r no t hav e conversation s wit

h Mr . Wian dt o se e i

f ther e are solutions . Th e motio n die dfo

r lac k o f asecond . Mr . Anderso n clarifie dtha t counci l vote dt o reaffir

mth e March 10 , 200 9 decisio n denyin g th e hanga r reques t an dconfirmedit

wa s council' s directio n tha t h e andMr . Tume r

mee t wit h th e receive r t o discus s th e VJC . Reces s wa s take n fro

m4:2 4 p.m . unti l 4:3 6 p.m .EXCERP T FRO M TH E JUL Y 14,200 9 CITY COUNCI L REGULA RMEETIN G

Vm . CIT Y ATTORNEY' S REPOR T Mr . Anderso n requeste dauthorizatio n t o engag e Thoma s R . Devin e o f Kapla n Kirsch , Washingto n D.C , t

o assis t in representatio n i

f th e cit y i s serve dwit

h th e Par t 1 6 complaint regardin g th e Venic e Je t

Center . Mr . Turne r

state dth e Par

t 1 6 complaint

ha dbee n filedwit

h th e FAA in Washingto n D.C , an d advise dtha t

h e concurre dwit

h Mr . Anderson' s reques t

t o hire Mr . Devine . Mr . Anderso n reviewe dMr . Devine' s qualifications , an dnote dtha t

resolutio n befor

e servic e o

f th e Par t 1 6 complain

t woul dnegat e th e nee dt o engag e Mr . Devine . Respondin g to Mr . Moore , Mr . Anderso n explaine dth e cit y ha s no t hadservic e o n th e Par

t 1 6 complain t and , therefore , di dno t

hav e pendin g Utigation an dcoul dno t schedul e aPrivate Attomey-Clien t

Session . Mr . Moor e move dto approv e Cit y Attome y Bo b Anderson' s reques t t o engag e Thoma s R . Devine , Kapla

n Kirsch , Washingto n D.C , t o assis t i n representatio n i

f th e cit y i s serve dwit

h th e Par t 1 6 complaint

regardin g th e Venic e Je t Center . Seconde db y Ms . Taylor . MOTIO N CARRIE D WIT

H MR . SIMMOND S OPPOSED . Xn . REQUES T FO RDIRECTIO N O N CONTEN T O F A PROPOSE D MEETIN G WIT H BURTO N W . WIAN D REGARDIN G TH E VENIC E JE T CENTE R(VJC ) Mr . Tume r

advise dtha

t h e an dMr . Anderso n me

t wit h Burto n Wiand , receiver

fo r th e VJC , an

d indicate dtha

t Mr . Wiandma

y possibl y sho w interes t

i n settiement

term s tha t includ e 1 ) th e cit

y approvin g constmctio n o

f th e fou r hangar s an drelate dconstmctio n a s submitte do n th e site plan , 2 ) th e VJ C demonstratin g financial capabilit y prio r t o th e issuin g of

buildin g permits , 3 ) consideratio n o

f aspecifi c lan dswa

p proposal t o constmc t

hangar s o

n th e opposit e sid e of

th e taxiway , an d4 ) consideratio n of givin g th e cit

y th e right

of firs t refusa l regardin g sal e o f

th e VJC . Mr . Timier

continue dtha

t Mr . Wian dadvise dtha

t h e wa s goin g t o file th e Par t 1 6 complain t an dwouldlitigate fo

r damage s du e to hanga

r constmctio n no t

bein g approved . Mr . Tume r requeste dspecifi c directio n fromcounci l regardin g th e propose dsettiement terms . Discussio n ensue dregardin g resolutio n of thi s matter , operatin g o n th e assumptio n tha t th e cit y wi U b e serve dwit

h th e Par t 1 6 complaint . Private Attomey-Clien t Sessio n discussions , an

d whethe r o r no t to discus s merit s of

th e Par t 1 6 complain t Marshal l Happer , 11 7 Maitellag o Drive , recommende dtha t Mr . Anderso n an dMr . Wiand discus s possibl e settlement and , if n o resolutio n ca

n b e found , judiciall y determin e whether or no t th e receive r

i s entitie dt o approval for

constmctio n of

fou r hangar s wit

h n o ren t increase , an

d defen dth e Par

t 1 6 complaint . Mr . Tume r

lef t th e dai s fro

m5:1 4 p.m . unti l 5:1 8 p.m . Ji mMarble , 83 2 Rober

t Street , discusse dPar

t 1 6 procedure s an dth e valu e of th e VJ C propert

y wit h an dwithou t

approva l t o constmc t

hangars .EXCERP T FRO M TH E JUL Y 14,200 9 CIT Y COUNCI L REGULA RMEETIN G

(5:23 ) Ms . Lang readaportio n o f correspondenc e date dJul y 1 , 200 9 fromCatherin e Lang , Federa l Aviatio n Administratio n Actin g Associate Administrato r fo r Airports , t o Senato r

Me l Martine z regardin g hanga r developmen t

an dfinancia

l abiUt y o f th e proponen t

wishin g to buil d hangar s bein g lef

t up t o th e city . Discussio n foUowe

dregardin g deUberatin g about settlement

meeting s a

t aPrivat e Attomey

CUen t Sessio n an

dth e city' s interes t

i n acquirin g th e VJ C leasehold , th e appraisal bein g o n hold , scheduUng aPrivate Attomey-CUen t Sessio n prio r

t o bein g serve dwit

h th e Par t 1 6 complaint andcancelin g i

f there i s n o service , settUng thi s issue , no t makin g adecisio n a

t thi s meeting , and attomey s discussin g asettlement . Mr . Simmond s move dto authoriz e Mr . Turner andMr . Anderso n t o discus s wit h th e receive

r pursuin g approvin g constmctio n of th e fou r hangar s an drelate dconstmctio n a s submitte do n th e site pla n an dth e VJ C demonstratin g financial capabiht y prio r t o th e issuin g of

buildin g permits . Seconde db y Ms . Taylor . Discussio n ensue dregardin g th e constmctio n o f hangar s bein g alegall y defendabl e leas e optio n fo r th e owner

o f th e VJC , settiemen t

discussion s wit

h Mr . Wiand , includin g th e valu e o f th e hangar s in asettiement

offer , vahdity of

th e hanga

r constmctio n request , Mr . Wian dstatin g h e ha s n o intentio n of

buildin g hangars , financial documentatio n no t bein g provide db y Mr . Wiand , problem s wit

h th e lease , th e city' s interes t in purchasin g th e VJC , th e evenmal owner o f th e VJ C constmctin g th e hangars , an dacquirin g additional option s fromMr . Wiand . (6:03 ) Mr . Zavodnyik

suggeste dincludin g consideratio n o f aspecifi c lan dswa

p proposal t o constmc t hangar s on th e opposit e sid e of th e taxiwa

y an dconsiderin g givin g th e cit y th e right

o f first refusa l regardin g sal e o f

th e VJ C a s par

t o f Mr . Simmonds ' motion . Discussio n followe dregardin g whethe r o r no t to discus s settiement

term s wit h Mr . Wiand , hirin g outsid e legal counse l wit h expertis e i n aviatio n la w an dFA

A regulations , discussin g only Utigation stiateg y andsettiement of pendin g Utigation a

t th e Privat e Attoraey-CUen t Session , schedulin g bot

h aPrivate Attorney-Clien t Sessio n an da

n ope n discussio n a

t th e Jul y 2 8 counci l meeting , an dsettiement

opportunities . Mr . Tume r

reiterate dhi s reques t

for directio n fromcouncil , no t approval of

hanga r constmction . Mr . Simmond s move dt o ca U th e question . Seconde db y Ms . Taylor . ROLL CALL : MR . MOORE , YES ; MS . TAYLOR , YES ; MS . LANG , YES ; MR . ZAVODNYIK , YES ; MR . MCKEON , YES ; MR . SIMMONDS , YES . MOTIO N CARRIED . ROLL CALL O N MR . SIMMONDS ' MOTION : MS . LANG , NO ; MR . MOORE , NO ; MR . MCKEON , YES ; MR . SIMMONDS , YES ; MR . ZAVODNYIK , NO ; MS . TAYLOR , YES . MOTIO N FAILED WIT H A TI E VOTE . Mr . McKeo n move dt o authoriz e Mr . Turner andMr . Anderso n t o discus s wit h th e receiver pursuin g approval of

constmctio n o

f th e fou r hangar s an drelate dconstmctio n a s submitte d o n th e site plan , th e VJ C demonstratin g financial capabiUt y prio r t o th e issuin g of

buildin g permit , an dalan dswa

p proposal t o constmc t

hangar s o

n th e opposit e sid e of

th e taxiway , wit

h th e intentEXCERP T FRO M TH E JUL Y 14,200 9 CIT Y COUNCI L REGULA RMEETIN G

t o come to amutually acceptabl e agreement fo r approval b y cit

y council . Seconde dby Mr . Simmonds . ROL L CALL : MS . TAYLOR , YES ; MR . MCKEON , YES ; MR . SMMONDS , YES ; MR . MOORE , NO ; MR . ZAVODNYIK , NO ; MS . LANG , NO . MOTION FAILED WIT H A TIE VOTE . Mr . Anderso n requeste dtha t aPrivat e Attomey-Clien t Sessio n to discus s litigatio n an d settiement b e schedule da s par

t of th e Jul y 28 , 200 9 counci l meeting , assumin g that servic e i s made o n th e cit

y on th e Par

t 1 6 complaint . Discussio n ensue dregardin g scheduUng th e Privat e Attomey-CUen t Sessio n an

dope n discussio n a s a n agend aitem . Mr . Zavodnyi k

requeste dtha

t th e aftemoo n meetin g b e devote dsolely to th e Comprehensiv e Plan . Mr . Turner

reviewe dComprehensiv e Pla n discussio n item s an

dpointe dout

tha t budget item s als o require ddiscussion . (6:28 ) Mr . Simmond s move dt o approv e Mr . Anderson' s reques t t o schedul e aPrivat e Attomey

CUen t Sessio n a s par

t o f th e Jul y 28 , 200 9 Special Meetin g to discus s litigatio n strateg y and settiemen t i f servic e i s made on th e cit y regardin g th e Venic e Je t Center Par t 1 6 complaint . Seconde db y Mr . Zavodnyik . MOTIO N CARRIE D O N VOIC E VOT E UNANIMOUSLY . Mr . Tume r

clarifie dtha

t a n agend aite mwoul dals o b e include dfo r a n open meetin g discussion .Cit y Exhibi t 1 2 

## HAL L & ANDERSON , P . A . ATTORNEY

S AT LA W 131 4 EAS T VENIC

E A VENU

E SUIT E E VENICE . FLORID

A 3428 5 ROBERTC . ANDERSO N WAYNEC . HALL * Telephone : (941 ) 480-099 9 Facsimile : (941 ) 480-144 6 Website : www . Iawvers.com/ha-la w E-mail : whalKSihall-anderson.co m randerson&hall-anderson.con i 'Boar dCertifie dWith . Trusli . an dEstate s Lawyer Februar y 4 , 200 9

Ms . Rebecc aR . Henr

y Plannin g Specialis t U . S . Departmen t

o f Transportatio n Federa l Aviatio n Administratio n Orland o Airport s Distric t

Offic e 595 0 Hazeltin e National Drive , Suite 40 0 Oriando , Florid a32822-502 4

RE : Venic e Municipa

l Airpor t Dea r Ms . Henry : Venic e Je t

Center . LLC i s afixedbas e operato r operatin g a

t th e Venic e Municipa

l Airpor t pursuant to aleas e wit

h th e Cit y o f Venic e date dMa

y 23,2006 . On Januar

y 13,200 9 th e .fe

t Cente r aske dth e Venic e Cit

y Counci l fo

r it s approval o f

aplan fo r th e Je t Center t o construc t

fou r 8,00 0 squar e foot hangar s an drelate dappurtenance s on vacan t landlocate dwithi n it s leasehold . 1 h e approve dAirpor

t Layou t Pla n fo r th e Venic e Municipa

l Airpor t i s ama p serie s prepare d b y Dufresne-Henry , Inc . Th e ma p serie s contain s si x sheets . I hav e enclose dacopy o f Sheet 2 o f 6 entitle dAirpor

t Layou t Pla n an dacop y o f

Shee t 3 o f 6 entitle dTerminal Are aPlan . On the enclose dTerminal Are aPla n 1 hav e show n th e thre e parcel s whic h compris e th e Venic e Jet Cente r leasehol d(outline din red ) andth e locatio n o f th e fou r propose dhangar s (outline di n green) . Order 5190.6A , Airpor

t Complianc e Requirements , date dOctober 2 , 198 9 addresse s di

e obligation s o f

a n airpor t owner regardin g th e us e o f

airport property . Sectio n 4-17(f

) o f th e orde r states : "Continue dadherenc e to a n AL P i s acomplianc e obligatio n o f th e airpor

t owner . Th e erectio n o f

an y sti-uctur e o r an y alteratio n i

n conflic t wit h th e ple ma s approve d b y th e FA A ma

y constitut e aviolatio n o f

thes e obligations. "02/02/201 0 15:4 8 FA X @|002/00 2



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# DAT E FILE D

, DECi 1 0 200 8 COMMISSIO N O N ETHICf. < I n r e SU E LANG . . Responden t Complain t No . 08-13 7 

### BECM B B

Y DE C f 5 200 8 PUBLI C REPOR T AN D ORDERDISMISSIN G CCSSFL^OT?!' * ^ ^^oWmye r O n Friday , December

5 , 2008 , th e Commissio n on Ethic s me t i n executiv e sessio n and considere d(hi s complain t

for lega l sufficienc y pursuan t t o Commissio n Rul e 34-5.002 , F.A.C . Th e Commission' s revie w was limite dt o question s o f jurisdictio n o f

th e Commissio n ando f

the adequac y o f

th e detail s o f

th e complain t

t o alleg e aviolatio n o f

th e Cod e o f

Ethic s fo r Publi c Officer s an dEmployees . N o fiictual investigatio n precede dth e review , an dtherefor e th e Commission' s conclusion s d o not reflec t on th e accurac y o f

th e allegation s o f

th e complain t Th e Commissio n vote dt o dismis s th e complaint for legal insufficiency , base don the followin g analysis : 1 . Thi s complain t

was filedby Edwar

dWinsto n Wihnor e o f

Venice , Florida , 2 . Th e Respondent , Su e Lang , allegedl y serve s a s amembe r o f th e Venic e Cit

y Council . 3 . Th e complain t

allege s tha

t th e Responden t

live s withi n amil e o f

th e Venic e Cit

y Airport . Accordin g to th e Complainant , th e Respondent ha s lon g bee n an outspoke n opponen t o f the Altpor

t an dit s activitie s becaus e he r home lie s nea

r th e en do f

arunway , andunde

r th eAirport' s curren t FA A designation , jet s an dturbo-pro p aircraf t ar e allowe dt o us e th e runways . Accordin g t o th e Complainant , th e Responden t want s t o se e je t

an dlarg e aircraf

t traffic eliminated , an dcampaigne d"o n issue s discouragin g developmen t at th e Venic e Cit

y Ainiort. " 4 . Subsequen t

t o he r

election , th e Complainan t vmtcs , tiie Responden t communicate dprivatel y wit h othe r Counci l member s an dth e Mayo r o n avariety o f

issue s tha t woul dcom e before th e Council , includin g issue s relate dto th e Aiiport , an duse dprivate citizen s a s conduit s t o conve y infonnatio n sh e woul db e prohibited , unde r Florida' s open meeting s ("Sunshine" ) law , fi-ompersonall y communicatin g outsid e apubli c meeting . 5 . Additionally , th e complain t allege s tha

t th e Responden t

an dttv o other

Cit y Counci l member s wh o liv e clos e t o th e Airpor t rejecte dan Airport

Maste r Pla n an dAiipor

t Layou t Pla n drafte db y aconsultan t

hire db y th e Cit

y Coimci l i n 2005 , an dvote dt o "engag e a new engineerin g firmtha

t wil l agre e t o dra w th e plan t o thei r ow n specifications. " Accordin g t o th e Complainant , th e Responden t ha s "vote don issue s relate dt o th e Maste r Pla n Update andthe Airpor t Layou t Plan " o n numerou s occasions . 6 . Th e Complainan t

als o contend s tha

t th e Respondent : ha s attempte d"t o interfer e wit h private businesse s locate do n aiiport property , includin g votin g t o direc t th e Cit y Attorney t o draf t provision s tha

t allo w th e Cit

y t o contro l sublease s at

th e Airport

an drejectin g busines s sign s tha t ha dbee n approve db y City stafiP' ; ha s vote dagains t th e Venic e Municipa

l Join t Automate dImprovemen t

Program , whic h woul dhav e fiuide drepair s t o th e aiiport ; andha s sough t t o influenc e appointment s t o th e Airpor t Advisor y Board , an dultimatel y vote dt o abohs h tha t Board .7 . Finally , th e complain t allege s that

th e Responden t

disclose dinfonnatio n sh e wa s furnishe di n a"shade " meeting , "i n orde r t o benefi t he r plan t o hal t

al l busines s opportunitie s a t th e Cit y o f Venic e Airport. " 8 . Sectio n 112.313(6) , Florid aStatutes , states : N o publi c officer , employe e o f a n agency , o r

loca l governmen t attome y shal l corruptl y us e o r attemp t to us e hi s o r

he r officia l positio n o r

an y propert y o r

resourc e whic h ma

y b e withi n hi s o r he r tmst , o r perfor mhi s o r he r officia l duties , t o secur e aspecial privilege , benefit , o r

exemptio n fo

r himself , herself , o r others . Pursuan t t o Section . 112.312(9) , Florid aStatutes , "corruptly " i s define da s don e vfit h awrongfu l inten t

andfor th e purpos e o f

obtaining , o r compensatin g o r

receivin g compensatio n for , any benefi t resultin g fromsom e ac t

o r omissio n o f

apubli c servan t

whic h i s inconsisten t wit h th e prope r

performanc e o f

hi s o r her publi c duties . 9 . Sectio n 112.313(6 ) prohibit s th e corrupt , intentional us e o f one' s publi c position , property , o r

resource s for

jjersona l gain , o r

t o benefi t another . 10 . It mus t b e observe da t

th e outse t

tha t th e Respondent' s purporte dunderlyin g goa l o f limitin g o r

reducin g th e numbe r

an dtype s o f

aircraf t usin g th e Aiipor t

i s no t inconsistent

vrit h th e prope r performanc e o f

he r publi c duty . Whil e reasonabl e mind s may diffe r a s to wiiethe

r reducin g airpor

t fiinctionalit

y i s goo dpubli c policy , i t i s unquestionabl y publi c policy , anda s suc h i s withi n th e purvie w o f th e City Counci l t o determine . Accordingly , th e allegation s regardin g Respondent' s vote s an dothe r efforts , a s aCounci l member , regardin g di e Aiipor t Master Plan , th e chang e i n engineerin g firms, an dth e like , ar e legall y insufficient t o alleg e a violatio n o f

Sectio n 112.313(6) , Florid aStatutes . 11 . A s t o th e allegation s o f Sunshin e law violations , t o th e exten t th e complaint

ma y b e rea da s allegin g tha t

di e Responden t

misuse dhe r

offic e b y communicatin g wit h other Councilmember s outsid e th e sunshin e on variou s issue s unrelate dt o th e Airport , i t i s legall y insufficien

t t o state aviolatio n o f

Sectio n 112.313(6) , Florid aStatutes , becaus e n o fact s ar c allege dwhich indicate an y benefi t

t o th e Responden t

o r an y othe r

perso n o r

entity a s aresul t

of the communications . Th e Sunshin e law . Sectio n 286.011 , Florid aStatutes , prohibit s tw o or mor e member s o f

aboardfrommeetin g an ddiscussin g matter s o n whic h foreseeabl e actio n wil l b e take n b y di e bpard . See . Boar do f Publi c Instructio n o f

BrowardCounty v . Doran . 22 4 So . 2d 69 3 (Fla . 1969) . However , th e Commissio n ha s n o jurisdictio n ove r thi s statute . Knowing violation s o f

th e Stmshin e la w ar e secon ddegre e misdemeanors , an dallegation s o f violation s of th e la w ar e withi n th e jurisdictio n o f th e State Attorney' s Office . 12 . Th e allegatio n tha t tiie Responden t

privatel y communicate dwit h other Council member s anduse dcitizen s a s conduit s t o conve y informatio n sh e was preclude dfro mpersonally communicatin g doe s indicat e abenefi t t o th e Respondent , i n tha t thes e communication s advance dhe r

effort s to reduc e Airport usage , whic h woul dallegedl y benefi t he r becaus e sh e live s nea r th e Airport . However , i n orde r t o violat e th e law , th e conduc t mus t b e undertake n "fo

r th e pmpos e o f

obtauiin g apersona l benefit . Th e chang e i n Aiipor t activitie s canno t

b e sai dt o b e personal , t o th e Respondent , becaus e th e perceive dbenefit—reductio n i n nois e an dair traffic—^woul

db e share db y everyon e i n th e surroundin g area . Indeed , accordin g t o the Complainant , th e Responden t campaigned , an dwa s elected , o n thi s platform . A s previously stated , chang e in airpor

t usag e i s amatte r

o f publi c policy ; tha t

th e Responden t

ma y enjoy a n incidental benefi t

a s aresul t

o f suc h chang e doe s not

alte r tha t fact . Compare . Blackbur n v . State . 58 9 So . 2 d431 , 43 5 (Fla . Dist . C t App . 1s t Dis t 1991 ) (mcidenta l benefi t enjoyedb y count y commissioner

in using , fo

r he r campaign , material s prepare dfo r he r us e a s a commissioner

doe s no t

convert he r reques t t o prepar e th e material s int o an illega l act) . 4Therefore , notwithstandin g that th e mechanis msh e chos e ma y hav e violate dsome other provisio n o f

law , th e allegatio n tha t

Responden t

use dhe r positio n t o alte r

Aiipor t activitie s i s legall y insufficien

t t o alleg e aviolatio n o f

Sectio n 112.313(6) , Florid aStatutes . 13 . Th e allegation s tha t th e Responden t

vote do n issue s relate dt o th e Airpor t implicate Sectio n 112.3143 , Florid aStamtes , whic h states , in pertinen t part : (3)(a ) N o county , municipal , o r othe r local publi c office

r shal l vot e i n a n officia

l capacity upo n an y measure whic h woul dinure t o hi s o r he r special privat e gai n o r

loss ; whic h h e o r

sh e know s woul dinur e t o th e special privat e gai n o r los s o f an y principal b y who mh e o r

sh e i s retaine do r

t o th e paren t

organizatio n o r subsidiary o f

acorporat e principal b y whic h h e o r sh e i s retained , othe r than a n agenc y a s define di n s . 112.312(2) ; o r whic h h e o r sh e know s woul dinur e t o th e specia l privat e gai n o r los s o f a relativ e o r

busines s associat e o f

tiie publi c officer . Suc h publi c office r shall , prio r

t o th e vote bein g taken , publicl y stat e t o th e assembl y th e natur e o f

th e officer' s interes t

i n th e matte r

from whic h h e o r

sh e i s abstainin g fromvotin g and , withi n 1 5 day s afte r th e vot e occurs , disclos e th e natur e o f hi s o r he r interes t a s apubli c recor di n amemorandu mfiledwith th e perso n responsibl e for recordin g th e minute s o f th e meeting , wh o shal l incorporat e th e memorandu mi n th e minutes . 14 . Sectio n 112.3143 , Florid aStatutes , prohibit s alocal pubU c office r fromvotin g o

n matter s whic h woul dinure t o he r ow n special privat e gai n o r tha t o f aprincipal b y whomsh

e i s retained . Ke

y t o thi s analysi s i s tha t

th e gai n o r

los s b e a"special private " one , becaus e no t ever y vote whic h ma

y affec t a n officia l i n some wa

y wil l inure t

o that official' s "special private gain or loss. " Th e Commissio n ha s sai dtha t if th e siz e o f

th e clas s o f

person s affecte db y th e measur e i s sufficienU y large , an dther e i s n o disproportionat e impac t o n th e votin g official , th e gai n or los s wil l no t b e "special. " Nothin g i n th e complaint suggest s that

th e effec t o f Airpor t developmen

t o n traffic , noise , o r

property value s wil l b e any differen t for th e Responden t

than fo r an y o f th e residence s i n th e surroundin g neighborhoods . Under th e fact s alleged , wher e th e Respondent' spersotia l interest s ar e th e sam e a s asubstantia l numbe r o f he r constituent s an dsh e wa s elected , a t leas t i n part , o n aplatfor mdiscouragin g developmen t a t th e Aiiport , w e canno t

conclud e tha t

an y o f th e meastire s sh e allegedl y vote do n woul dhav e inure dt o he r "specia l private " gain . Accordingly , th e complain t i s legall y insufficien t

t o alleg e aviolatio n o f Sectio n 112.3143 , Florid aStatute s 15 . Th e Complainan t als o allege s aviolatio n o f Articl e II , Sectio n 8(g) , Florid a Constitution . Tha t

provisio n state s onl y that , " A cod e o f ethic s fo r

al l stat e employee s an d nonjudicia l officer s prohibitin g conflic t betwee n publi c dut y an dprivat e interest s shal l b e prescribe db y law, " an ddoe s no t establis h an y standar do f conduc t whic h a n individua l woul d b e capabl e o f

violating . 16 . Regardin g th e allegatio n describe dmparagrap h 7—^tha t th e Responden t

misuse d confidentia l infonnation—Sectio n 112.313(8) , Florid aStatutes , provides :

DISCLOSUR E O RUS E O F CERTAI N INFORMATION.— A curren t o r forme r publi c officer , employe e o f an agency , o r

loca l governmen t

attome y ma y no t

disclos e o r

us e informatio n no t availabl e t o member s o f th e genera l publi c an dgaine db y reaso n o f hi s o r he r official position , excep t

for infonnatio n relatin g exclusivel y t o governmenta l practices , fo r hi s o r he r persona l gai n o r

benefi t o r for th e persona l gai n o r

benefi t o f an y othe r

perso n o r

busines s entity . 17 . Thi s sectio n prohibit s a n officia l fro musin g infonnatio n no t availabl e t o th e genera l publi c fo r

persona l ga mo r

fo r th e benefi t

o f another . Th e Complainan t doe s no t indicate , othe r

tha n i n avagu e an dconclusor y manner , wha t informatio n wa s used , ho w i t wa s used , o r ho w it s us e benefitte dth e Respondent . Therefore , th e complain t i s legall y insufficien t

t o alleg e aviolatio n o f

Sectio n 112.313(8) , Florid aStatutes .Accordingly , thi s complain t i s hereb y dismisse dfor feilure t o constitut e alegally sufficien t complain t

with th e issuanc e o f

thi s publi c report . ORDERED b y th e Stat e o f Florid aCommissio n o n Ethic s meetin g i n executiv e sessio n on December

5,2008 . Date 

# \.^;crtcC^ ^ Chery l Forthill i Chair , Florid aCommissio n on Ethic s

cc : Mr . Michae l J . Roper , Counse l for Responden t Mr . EdwardWinsto n Wilmore , Complainant CEF/vadCas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 1 o f 5 3 Cit y Exhibi t

1 6

UNITE D STATE S DISTRIC T COUR T MIDDL E DISTRIC T O F FLORID A TAMP A DIVISIO N SECURITIE S AND EXCHANG E COMMISSION ,

Plaintiff , ARTHURNADEL ; SCOO P CAPITAL , LLC ; SCOO P MANAGEMENT , INC .

Defendants , SCOO P REA

L ESTATE , L.P. ; VALHALLA INVESTMEN T PARTNERS , L.P . VALHALLA MANAGEMENT , INC. ; VICTORY IR

A FUND , LTD. ; VICTORY FUND , LTD. ; VIKIN G IR

A FUND , LLC ; VIKIN G FUND , LLC ; AND VIKIN G MANAGEMENT , LLC ,

Relie f Defendants . Cas e No . 8:09-cv-0087-T-26TB M

TH E RECEIVER' S THIR D INTERI M REPOR T Receivershi p Informatio n an dActivit y fro mMa y 15 , 200 9 throug h Augus t 12 , 200 9 Car i R . Nelson , FB N 028018 6 Gianluc aMorello , FB N 03499 7 May aM . Lockwood , FB N 017548 1 Ashle y Bruc e Trehan , FB N 004341 1 FOWLE RWHIT

E BOGG S P.A . P.O . Bo x 143 8 Tampa , F L 3360 1 T : (813 ) 228-741 1 F : (813 ) 229-831 3 Attomey s fo

r Receiver , Burto n W . Wian dCas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 2 o f 5 3

TABL E O F CONTENT S INTRODUCTIO N 1 BACKGROUN D 2 I . Procedur e an dChronolog y 2 II . Th e Receiver' s Rol e an dResponsibilitie s 5 A . Operatin g th e Busines s o f th e Receivershi p Entitie s 6 B . Takin g Possessio n o f Receivershi p Propert y 6 C . Investigatin g Receivershi p Affair s an dRecoverin g Fund s 6 D . Reportin g o n Asset s an dLiabilitie s an dImplementin g Claim s Proces s 7 III . Overvie w o f

Preliminar y Finding s 7 A . Fictitiou s Tradin g Result s 8 B . Depletio n o f

th e Hedg e Funds ' Asset s 1 0 C . Investo r

Losse s an d"Fictitiou s Profits. " 1 1 D . Nadel' s Tradin g Activitie s i n th e Hedg e Fund s 1 2 ACTION S TAKE N B Y TH E RECEIVE R1 5 IV. Securin g th e Receivershi p Estat e 1 5 A . Takin g Possessio n o f Defendants ' Headquarter s 1 5 B . Securin g Receivershi p Fund s 1 6 C . Locatin g Additiona l Fund s 1 8 D . Receivershi p Accountin g Repor t 1 9 E . Obtainin g Informatio n fro mThir dPartie s 1 9 V . Asse t

Analysi s an dRecover y 2 0 A . Expansio n o f

Receivershi p t o Includ e Additiona l Entitie s 2 0 1 . Venic e Je t

Center , LL C 2 1 2 . Tradewind , LL C 2 3 3 . Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; an dLaure l Mountai n Preserv e Homeowner s Association , In c 2 5 4 . Marguerit e J . Nade l Revocabl e Trus t UAD 8/2/200 7 2 7 5 . Guy-Nade l Foundation , In c 2 8Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 3 o f 5 3

6 . Lim e Avenu e Enterprises , LLC , an dA Victoria n Garde n Florist , LL C 2 9 7 . Vikin g Oi l & Gas , LL C 3 0 8 . Hom e Fron t

Homes , LL C 3 0 9 . Summe r

Plac e Developmen t

Corporatio n 3 2 B . Recover y o f

Rea l Propert y 3 3 1 . Thomasville , Georgi a3 3 2 . Grad y County , Georgi a3 4 3 . Graham , Nort h Carolin a3 4 4 . Raleigh , Nort h Carolin a3 5 5 . Tupelo , Mississipp i 3 6 6 . Newnan , Georgi a3 6 7 . Fairview , Nort h Carolin a3 7 8 . Sarasota , Florid a(Fruitvill e Road ) 3 7 9 . Oberlin , Ohi o 3 8 C . Recover y o f

Vehicle s an dOthe r

Item s 3 9 1 . Vehicle s 3 9 2 . Condominiu mNot e an dMortgag e 4 0 3 . Bonds.co mAsset s 4 0 4 . Ques t

EM G Promissor y Not e 4 2 5 . Miscellaneou s Item s 4 2 D . Recover y o f

Profit s fro mInvestor s 4 2 E . Recover y o f

Asset s fro mChristophe r D . Mood y an dNei l V . Mood y 44 1 . Vikin g Oil' s Interes t in Ques t EM G 44 2 . Moodys ' Interes t i n Bonds.co m44 3 . Queen' s Wreat h Jewels , In c 44 F . Recover y o f

Fee s fro mRecipient s o f Commission s 4 5 G . Othe r

Litigatio n 4 6 VI . Investigatin g Receivershi p Affair s an dTracin g Receivershi p Fund s 4 7 VII . Th e Nex t

Sixty Days 4 7 CONCLUSIO N 4 9Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 o f 5 3

INTRODUCTIO N Burto n W . Wiand , th e Court-appointe dReceiver fo r th e Receivershi p Entitie s a s define dherein , hereb y files thi s ThirdInteri mRepor t (th e "Report" ) t o infor

mth e Court , th e investors , an dother s intereste di n thi s Receivership , o f

activitie s to dat e a s wel l a s th e propose dcours e o f

action. ' A s o f

th e dat e o f

filing thi s Report , th e Cour t ha s appointe d Burto n W . Wianda s Receive r ove r th e followin g entitie s an dtrust : a ) Defendant s Scoo p Capital , LLC ("Scoo p Capital" ) an dScoo p Management , Inc . ("Scoo p Management" ) (which , alon g wit h Arthu r Nadel , are collectivel y refene dt o a s "Defendants") ; b ) Relie f

Defendant s Scoo p Rea

l Estate , L.P . ("Scoo p Rea l Estate") ; Valhall a Investmen t

Partners , L.P . ("Valhall aInvestmen t Partners") ; Victor

y IR A Fund , Ltd . ("Victor y IR A Fund") ; Victor y Fund , Ltd . ("Victor y Fund") ; Vikin g IR

A Fund , LLC ("Vikin g IR A Fund") ; an dVikin g FundLL C ("Vikin g Fund" ) (collectivel y referre dt o a s th e "Hedg e Funds''); ^ c ) Relie f

Defendant s Valhall aManagement , Inc . ("Valhall aManagement") , an dVikin g Management , LLC ("Vikin g Management" ) (which , alon g wit h Scoo p Capital andScoo p Management , are collectivel y refene dto a s th e "Investmen t

Managers") ; an d d ) Venic e Je t

Center , LLC ; Tradewind , LLC ; Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; Laure l Mountai n Preserv e Homeowner s Association , Inc. ; Marguerit e J . Nade l Revocabl e Trus t UAD 8/2/07 ; Guy-Nade l Foundation , Inc. ; Lime Avenu e Enterprises , LLC ; A Victorian Garde n Florist , LLC ; Vikin g Oi l & Gas , LLC ; andHome Front Homes , LLC . Th e foregoin g entitie s an dtrus t are collectivel y refene dt o a s th e "Receivershi p Entities. "

Thi s Repor

t i s intende dt o repor

t on informatio n an dactivity fro mMa y 15 , 2009 , throug h Augus t 12 , 2009 . Thus , unles s otherwis e indicated , th e informatio n reporte dherei n reflect s th e informatio n i

n th e Receiver' s possessio n a s o f Augus t 12 , 2009 . ^ Whil e thes e fund s ar e refene dt o a s hedg e fund s i n thi s Report , th e Receiver' s investigatio n ha s raise dseriou s question s a s t o whethe r the y wer e ever

operate da s legitimat e investment vehicles .Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 5 o f 5 3

Th e Receiver

wa s appointe don Januar

y 21 , 2009 . B y Januar

y 26 , 2009 , th e Receiver establishe da

n informational website , www.nadelreceivership.com . Th e Receiver ha s update dthi s websit e periodicall y an dcontinue s t o updat e i t wit h th e Receiver' s mos t significant action s t o date ; important cour t filings i n thi s proceeding ; an dother new s tha t migh t b e o f interes t t o th e public . Thi s Report , a s wel l a s al l previou s andsubsequen t reports , wil l b e poste don th e Receiver' s website . BACKGROUN D I . Procedur e an dChronology . Defendant Arthu r Nade l ("Nadel" ) wa s th e Hedg e Funds ' principal investment adviso r anda n office r an ddirecto r

o f Scoo p Managemen t

andsol e managin g member o f Scoo p Capital . O n o r

abou t Januar y 14 , 2009 , Nade l fledSarasot acount y an ddisappeare d fo r nearl y tw o weeks . On Januar y 21 , 2009 , th e Securitie s andExchang e Commissio n (th e "Commission" ) filedacomplain t

i n thi s Cour

t chargin g th e Defendant s wit h violation s o f

federa l securitie s law s (th e "Commissio n Proceeding") . Th e Commissio n allege s that Nade l use dth e Investmen t

Manager s t o defrau dinvestor s i n th e Hedg e Fund s fro

ma t leas t Januar y 200 8 forwar db y "massively " overstatin g investmen t retum s an dth e valu e o f fun dasset s to investor s i

n thes e fund s an dissuin g fals e accoun t statement s t o investors . Th e Commissio n als o assert s that

Nade l misappropriate dinvesto r fund s b y transferrin g $1.2 5 millio n fro m Vikin g IR

A Fundan dValhall aInvestmen t Partner s t o secre t

bank accounts . Th e Cour

t foundth e Commissio n demonstrate d2 i prim afaci e cas e that

Defendant s committe dmultipl e violation s o f

federa l securitie s laws .Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 6 o f 5 3

O n tha t sam e day , o n th e SEC' s motion , th e Cour t entere d(i ) a n Orde r

o f Preliminar y Injunctio n an dOthe r

Relie f a s t o th e Investmen t

Manager s an dal l Relie f Defendant s (Doc . 7 ) an d(ii ) aTemporar y Restrainin g Orde r an dOthe r

Emergenc y Relie f

a s t o Nade l (th e "Nade l TRO" ) (Doc . 9) . Amon g othe r things , thes e order s enjoine dth e Defendant s an d Relie f Defendant s fro mfurthe r violation s o f

federa l securitie s law s an dfroz e thei r assets . O n Februar y 3 , 2009 , th e Cour t entere da n Orde r

o f Preliminar y Injunctio n an dOthe r Relie f a s t o Nade l (th e "Nade l Preliminar y Injunction" ) (Doc . 29) , th e term s o f whic h ar e essentiall y identica l t o thos e o f

th e Nade l TRO . Als o o n th e sam e da y th e Commissio n filedit s complain t th e Cour t

entere dan orde r appointin g Burto n W . Wian da s Receive r fo r th e Investmen t

Manager s an dHedg e Fund s (th e "Orde r Appointin g Receiver") . {Se e generall y Orde r Appointin g Receive r

(Doc . 8). ) Betwee n Januar y 27 , 2009 , an dAugus t 10 , 2009 , o n th e Receiver' s motions , th e Cour t entere dorder s expandin g th e scop e o f receivershi p t o includ e additiona l entitie s a s follows : Januar y 27 , 200 9 (Doc . 17 ) Venic e Je t Center , LLC Tradewind , LLC Februar y 11 , 200 9 (Doc . 44 ) Laure l Mountai n Preserve , LL C Laure l Preserve , LL

C Marguerit e J . Nade l Revocabl e Trus t UA D 8/2/0 7 Laure l Mountai n Preserv e Homeowne r Association , Inc . Marc h 9 , 200 9 (Doc . 68 ) Guy-Nade l Foundation , Inc .

^ Bot h th e Nade l TR O an dth e Nade l Preliminar y Injunctio n require dNade l t o mak e aswor n accountin g t o th e Cour t an dth e Commissio n o f al l fund s receive db y hi mfro man y o f th e Defendant s o r

Relie f Defendant s an daswor n identificatio n o f al l account s i n whic h h e ha s a n interes t

o r ha s th e powe r

o r righ t t o exercis e control . (Docs . 9 , 29. ) I n respons e t o thes e Orders , o n Marc h 31 , 2009 , Nade l submitte dalette r assertin g hi s Fifth Amendmen t righ t agains t self-incriminatio n an drefuse dt o provid e thi s information . (Doc . 102. )Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 7 o f 5 3

Marc h 17 , 200 9 (Doc . 81 ) Lim

e Avenu e Enterprises , LL

C A Victoria n Garde n Florist , LL

C Jul y 15 , 200 9 (Doc . 153 ) Vikin g Oi l & Gas , LL

C Augus t 10, 200 9 (Doc . 172

) Hom

e Fron t Homes , LL

C O n Jun e 3 , 2009 , th e Cour

t entere da n orde r Reappointin g Receiver . (Doc . 140. ) Th e Januar y 21 , 2009 , andJun e 3 , 2009 , Order s wil l b e refene dt o collectivel y a s th e "Order s Appointin g Receiver. " Pursuan t t o th e Order s Appointin g Receiver , th e Receiver ha s th e dut y andauthorit

y to : "administe r

an dmanag e th e busines s affairs , funds , assets , chose s i n actio n andan

y othe r property o f

th e Defendant s an

dRelie f Defendants ; marshal an d safeguar dal l o f th e asset s o f

th e Defendant s andRelie f Defendants ; an dtake whatever action s are necessar

y fo r th e protectio n o f

th e investors. " (Order s Appointin g Receiver a t l

2. ) On Januar

y 27 , 2009 , Nade l sunendere dt o th e FB I i n Tampa , Florida . Nade l wa s aneste dandcharge dwit h tw o count s o f

securitie s frau

dan dwire fraudbase do n th e fraudulent investment

schem e discusse dherein . On January 30 , 2009 , Magistrat e Judg e Mar k Pizz o o f th e Unite dState s Distric t Cour t fo r th e Middl e Distric t

o f Florid adenie d Nadel' s reques t

fo r areleas e o n bon dawaitin g trial , decidin g insteadtha t Nade l shoul d remai n i n jai l base don , amon g othe r things , aris k

o f flight . On o r

abou t Februar y 2 , 2009 , Judg e Pizz o entere daDetentio n Orde r denyin g bai l an daRemova l Orde r requirin g tha

t Nade l b e transfene dt o th e Metropolitan Correctiona l Cente r i n Ne w York , Ne w Yor

k to awai t trial . U.S . v . Nadel , (Cas e No . 8:09-mj-0103 9 M.D . Fla . (Docs . 5 , 6)) . On Februar

y 26 , 2009 , Judg e Denis e Cote o f th e Unite dState s Distric t Cour t fo r th e Souther n Distric t o f Ne w Yor

k agree dt o releas e Nade l o n $ 5 millio n bail , contingen t o n aCas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 8 o f 5 3

number o f condition s includin g $ 1 millio n i n cash , livin g restrictions , an dspecifi c bond guarantees . Judg e Cot

e als o require dNade l to full y andcompletel y cooperat e wit h th e SEC . On Apri l 28 , 2009 , Nade l wa s indicte do n si x count s o f securitie s fraud , on e coun t o f mai l fraud , andeigh t

count s o f wire fraud . Th e maximu msentenc e fo r eac h charg e i s 2 0 year s o f imprisonment . O n Apri l 30 , 2009 , Nade l pleade dno t guilt y t o th e fifteen charges . I n Jun e 2009 , Nade l sought

areductio n o f

bail . Judg e John G . Koeh l agree dt o remov e th e $ 1 millio n cas h securit

y andinsteadimpose da$ 1 millio n personal recognizanc e bond , requirin g Nade l t o findfou

r financially soun dco-signers . A s o f th e date o f

thi s Report , Nade l ha s no t met th e condition s fo

r bai l an di s stil l bein g hel di n th e Metropolitan Conectiona l Center . I n th e Commissio n Proceeding , on Apri l 6 , 2009 , Nade l filedhi s answer an d affirmativ e defenses , i

n whic h h e denie dnearl y ever y allegatio n i

n th e Complain t

andset fort h tw o affirmativ e defenses . (Doc . 104. ) Nade l als o purporte dto set fort h a "Counterclaim, " whic h th e Cour t struc k on th e Receiver' s motion . (Docs . Ill , 112. ) II . Th e Receiver' s Role an dResponsibilities . Th e Receive r

function s a s a

n independen t

agen t o f th e court . Th e Unite dState s Suprem e Cour

t ha s explaine dthat : [ areceiver ] .. . i s a

n office r o f th e court ; hi s appointmen t i s provisional . H

e i s appointe do n behal f

o f al l parties , an dno t

o f th e complainan t

o r o f th e defendan t

only . H e i s appointe dfo r th e benefi t

o f al l partie s wh o ma

y establis h right s i

n th e cause . Th e mone y i

n hi s han di s in custodi alegi s fo r whoeve r ca n make ou t atitl e t o it . . . I

t i s th e cour

t itsel f whic h ha s th e car e o f th e property i

n dispute . Th e receive r

i s bu t th e creatur e o f th e court ; h e ha s n o powe r excep t suc h a s ar

e confene dupo n hi mby th e orde r

o f hi s appointmen t

an dth e cours e an d practic e o f

th e court .Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 9 o f 5 3

Boot h V . Clark , 5 8 U.S . 322 , 33 1 (1854) . Generally , th e Receiver i s charge dby th e Cour

t wit h maximizin g investors ' andcreditors ' recoveries . T o thi s end , th e Cour t directe dth e Receiver to engag e i

n th e followin g activities : A . Operatin g th e Busines s o f th e Receivershi p Entities . Th e Cour t grante dth e Receive r

th e "full andexclusiv e power , duty , an dauthority " to "administe r

an dmanag e th e busines s affairs , funds , assets , chose s i n actio n andany other propert y o f th e Defendant s andRelie f Defendant s . ... " (Order s Appointin g Receive r a t I. ) B . Takin g Possessio n o f Receivershi p Property . Th e Cour t directe dth e Receive r

t o "[t]ak e immediat e possessio n o f al l property , asset s an destate s o f

ever y kin do f th e Defendant s andRelie f Defendants , whatsoeve r

and wheresoever , located , belongin g t o o r i n th e possessio n o f

th e Defendant s andRelie f Defendant s .... " (Order s Appointin g Receive r T J 1. ) C . Investigatin g Receivershi p Affair s an dRecoverin g Funds . Th e Cour t als o directe dth e Receive r t o "[i]nvestigat e th e manner i n whic h th e affair s o f th e Defendant s an dRelie f Defendant s wer e conducte dandinstitut e suc h action s an dlega l proceedings , fo

r th e benefi t

an do n behal f

o f th e Defendant s andRelie f Defendant s andthei r investor s andother

creditor s a s th e Receive r deem s necessary agains t thos e individuals , corporations , partnerships , association s and/o r unincorporate dorganizations , whic h th e Receive r ma y clai mhav e wrongfully , illegall y o r otherwis e improperl y misappropriate do r transferre dmonie s or

othe r proceed s directl y o r

indirectl y traceabl e fro

minvestor s i

n th e Defendant s or

Relie f Defendant s .... " (Order s Appointin g Receive r ^ 2. )Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 1 0 o f 5 3

D . Reportin g o n Asset s an dLiabilitie s an dImplementin g Claim s Process . Th e Cour t furthe r directe dth e Receiver

t o "[p]resen t

to thi s Cour

t arepor t reflectin g th e existenc e andvalu e o f th e asset s o f

th e Defendant s andRelie f Defendant s an do f

th e exten t o f liabilities , bot

h thos e claime dt o exis t

by other s an dthos e th e Receive r believe s t

o b e lega l obligation s o f

th e Defendant s an dRelie f Defendants. " (Order s Appointin g Receive r ^ 3. ) A s contemplate dby th e Order , th e Receive r wil l ultimatel y institute aclaim s proces s primaril y fo

r th e benefi t

o f th e Receivershi p Entities ' investor s wh o hav e been defraude dand suffere dlegitimate losse s a s aresul t o f th e activitie s o f

Nade l andothers . III . Overvie w o f

Preliminar y Findings . Th e Receiver

continue s th e proces s o f

reviewin g voluminou s record s fro mth e office s o f Receivershi p Entities , a s wel l a s record s fro mmor e tha

n thirty (30 ) different

institutions , includin g bank s andbrokerag e firms. Th e Receive r als o i s i n th e proces s o f

obtainin g document s fro

madditional thirdparties . Th e Receiver ha s forme dsome preliminary conclusion s base don hi s revie w o f aportio n o f

th e record s received . Whil e thes e conclusion s are no t

final, andma

y chang e a s th e revie w become s mor e complete , th e Receive r believe s the y shoul db e share dwit h th e Court , th e investors , an dothe r potentiall y intereste dparties . I n th e Commission' s Emergenc y Motio n an dMemorandu mo f La w i n Suppor t o f Temporar y Restrainin g Orde r

an dOthe r

Emergenc y Relie f

(Doc . 2 ) an dsupportin g papers , th e Commissio n presente devidenc e showin g Nade l defraude dinvestor s throug h hi s contro l o f th e Hedg e Funds ' adviser s and/o r managers , Scoo p Capital an dScoo p Management . Throug h th e Investmen t

Managers , Nadel , alon g wit h Christophe r

Moody andNei l Moody ,Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 1 1 o f 5 3

wa s ultimatel y responsibl e fo r controllin g th e Hedg e Funds ' investment activities . Whil e th e Commission' s evidenc e showe dtha t Nade l defraude dinvestor s sinc e a t leas t Januar y 2008 , th e Receiver' s investigatio n ha s uncovere devidenc e showin g tha t th e fraudbega

n a t leas t a s earl y a s 200 3 an di

n al l likelihoo dbefor

e then . A . Fictitiou s Tradin g Results . Th e Receiver' s investigatio n ha s reveale dtha t fo r eac h Hedg e Fund , th e Hedg e Fund' s performanc e a s disclose dt o investor s fro ma t leas t 200 3 forwar

dwa s base dmainl y on tradin g result s tha

t Nade l purporte dt o hav e i n brokerag e transaction s cleare dthroug h Goldma n Sach s Group , Inc . (i n whic h mone y wa s purportedl y trade dt o generat e th e purporte dretum s Nade l wa s paying) . Th e retum s reporte dt o investor s andpotential investor s wer e base don fictitious performanc e result s tha t were create dby Nade l andthe n include di

n adatabas e maintaine dby Scoo p Management . Thes e fictitiou s performanc e result s forme dth e basi s o f gros s misrepresentation s t o investors . Tabl e 1 , below , show s acompariso n o f actual tradin g result s i

n th e Hedg e Funds ' Goldma n Sach s account s to th e value s represente dt o investor s andto distribution s paid . Specifically , fo

r eac h yea

r fro m200 3 t o 2008 , th e tabl e list s from , lef t t o righ t (1 ) th e pertinen t year ; (2 ) th e amoun t

o f gain s th e Investmen t

Manager s represente dtha t th e Hedg e Fund s ha dachieve dthat

year ; (3 ) th e actual combine dtotal gai n o r los s experience dtha

t yea r i n th e account s fo

r th e Hedg e Funds , pe r

statement s fro

mGoldma

n Sachs ; (4 ) th e differenc e betwee n what

th e Investmen t

Manager s represente dth e Hedg e Fund s hadachieve di n performanc e versu s th e actual tradin g result s i n th e Goldman Sach s account s fo r th e Hedg e Fund s (identifie da s "Difference") ; an d(5 ) th e actua l distribution s pai dby th e Hedg e Fund sCas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 1 2 o f 5 3

fo r th e pertinen t

year , includin g distribution s t o investor s an dmanagement andperformanc e incentiv e fee s paid . Tabl e 1 : Gains/(Losses ) Yea r 200 3 200 4 200 5 200 6 200 7 200 8 Tota l Investmen t

Managers ' Represente dGain s ($ )

23,716,74 9

- y 4^50^45.-; . 61,169,05 8 %=30,003^1?I 8 54,665,57 1 •;:, . •- ; mm^94 i 272,840,29 5 Hedg e Fund s

Actua l Amounts($ ) 17,237,00 8 4,637,87 8 5,739,30 1 (18,549,355 ) (24,989,307 ) .a493.^4 ) (18,418,129 ) Differenc e ($ ) 6,479,74 1 42.312,467 : 55,429,75 6 68,553,13 3 79,654,87 9 38^^28,44 ^ 291,258,42 4 Distribution s ($ )

16,729,14 7 49,329^38 7 75,078,84 0 75i444;^2 r 60,034,32 1

., v 73,443,31 0 350,059,12 7 A s Tabl e 1 shows , fo

r 200 3 throug h 2008 , th e Hedg e Funds ' performanc e a s represente dt o investor s wa s significantl y overstate dandthus , false . Specifically , fo r th e year s 200 3 t o 2008 , th e Investmen t Manager s represente dtha t th e Hedg e Funds ' tradin g activity generate dmore than $27 2 millio n i n gain s when , i

n reality , th e Hedg e Funds ' investmen t

account s actuall y los t

approximatel y $18. 4 million . Further , whil e th e Hedg e Fund s los t

approximatel y $18. 4 millio n fo r thi s sam e period , more tha n $35 0 millio n wa s pai db y th e Investmen t

Manager s i

n distribution s t o investor s andt o themselve s an dother s a s fees . A s thi s tabl e shows , fro ma t leas t 200 3 throug h 2008 , th e Investmen t Manager s were makin g distribution s an dpayin g fee s tha t th e investmen t

performanc e o f

th e Hedg e Fund s never supported . Th e Investmen t

Manager s als o were creditin g fictitiou s profit s t o account s where th e accountholder s wer e no t takin g distributions . Thes e fictitiou s profit s wer e likewis e unsupporte db y th e Hedg e Funds ' investmen t performanc e an dserve donl y t o furthe rCas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 1 3 o f 5 3

increas e th e Hedg e Funds ' insolvency . Thi s negativ e cas h flow mad e th e eventua l collaps e o f Nadel' s enterpris e inevitable . I n short , th e investmen t

retum s andperformanc e a s represente dt o investor s wer e base do n grossl y overstate dperformanc e number s create dby Nadel , an dth e result s reporte d to investor s wer

e fiction. Th e tru e result s o f th e tradin g activity tha

t actuall y occurre dwere never include di

n dat areporte dt o investor s or potential investors . B . Depletio n o f

th e Hedg e Funds ' Assets . Evidenc e als o show s that

th e Hedg e Fund s directl y o r indirectl y pai dsubstantial fee s to Scoo p Capital an dScoo p Management , to othe r Receivershi p Entities , an dto other third partie s i n th e for mo f management , advisory , and/o r profi t incentiv e fee s and"finder " fees . A s reflecte di

n Tabl e 2 , below , accordin g t o th e Hedg e Funds ' documents , fro m200 3 throug h 200 8 the y pai dapproximatel y $97,168,12 2 i n total fees . Profit

incentiv e fee s wer

e pai dt o Scoo p Management , Vikin g Management , Valhall aManagement , an dthir dparties , base don apercentag e o f

profit s tha

t never occuned . Suc h payment s significantl y deplete d th e Hedg e Funds ' asset s an ddiverte dthos e asset s t o Scoo p Capital andScoo p Management , whic h were controlle db y Nadel , andt o Valhall aManagemen t an dVikin g Management , whic h were controlle db

y Nei l andChristophe r

Moody .

1 0Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 1 4 o f 5 3

Tabl e 2 : Fee s Pai dfro mHedg e Fund s t o Investmen t Manager s an dOther s Performanc e Yea r Management

Fee s Incentiv e Fee s Total Fee s 200 3 200 4 200 5 200 6 200 7 200 8 1,521,37 7

3,644,18 8 5,057,63 3 5,^56,64 6 6,206,97 2 6,771,23 2 5,929,18 7 11,737,58 6 15,292,26 4 1|;500,94 5 13,666,39 3 9,083,69 8 7,450,56 5 15,381,77 4 20,349,89 7 18,257,59 0 19,873,36 5 15,854,93 1 Total 28,958,04 8 68,210,07 4 97,168,12 2 Significant

sum s fro mth e proceed s o f

Nadel' s schem e als o mad e thei r wa y into other account s controlle dby Nade l and/o r hi s wife . Marguerit e "Peg " Nadel . A s o f December

31 , 2008 , accordin g to th e balanc e shee t fo r Scoo p Management , Scoo p Management ha d transferre dapproximatel y $17,177,896.5 6 to account s owne deithe r individuall y o r

jointl y b y th e Nadels . Thes e amount s are i n additio n t o th e amount s Mrs . Nade l receive dfro mScoo p Management

a s compensation . Accordin g t o it s balanc e sheet . Scoo p Managemen t als o transferre dapproximatel y $6,433,804.4 0 t o othe r entitie s controlle db

y Nadel . T o date , th e Receiver ha s no t uncovere dan

y sourc e o f

income fo

r Nade l o r hi s wif e (durin g th e tim e o f Nadel' s scheme ) tha t

wa s no t i n som e manner

funde dwit

h mone y fro

mthat scheme . Documentatio n an dothe r informatio n tha

t th e Receive r

ha s collecte dshow s tha t mone y derive dfromth e schem e wa s use dby Nade l to purchas e and/o r fun dothe r businesses . Th e Receiver

ha s expande dth e Receivershi p t o includ e additional businesse s controlle db y Nadel . (Se e discussio n o f expansio n i

n Sectio n V.A , below. ) C . Investo r

Losse s an d"Fictitiou s Profits. " T o date , th e Receive r

ha s discovere dan didentifie dapproximatel y 37 1 investor s wh o investe dslightl y mor e tha n $39 7 million . Base do n documentatio n analyze dto date , it

1 1Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 1 5 o f 5 3

appear s tha

t investor s hav e out-of-pocke t losse s o f

approximatel y $16 8 million . Th e Receiver ha s als o discovere dtha

t som e investor s wer

e pai dmore tha

n thei r tota l investments . Thes e overpayment s wer e o f "fictitiou s profits. " T o date , th e Receive r ha s discovere d approximatel y $3 9 millio n i n suc h fictitious profits . Th e Receive r ha s initiate deffort s t

o recover thes e fictitious profits , andthos e effort s ar e discusse di n Sectio n V.D , below . Further , i t appear s that , althoug h separatel y numbere dinvesto r account s were usedi

n communication s wit

h investor s an dbrokerag e account s were use dfo r eac h Hedg e Fund , i

n realit y there wer

e no t separat e funds . Du e t o th e metho dNade l use dt o trad e securities , distinction s mad e betwee n th e individual Hedg e Fund s an dbetwee n investo r

"accounts " hav e littl e meaning . Th e document s reviewe dreveal tha t Nade l treate dth e Hedg e Fund s a s a singl e sourc e o f

mone y regardles s o f

th e Hedg e Fundwit

h whic h investor s purportedl y invested . Th e Receiver

ha s reache dth e preliminary conclusio n base do n availabl e researc h an devidenc e tha t

investo r fund s wer e commingle di n Nadel' s an dth e Receivershi p Entities ' accounts . D . Nadel' s Tradin g Activitie s in th e Hedg e Funds . I n th e Executiv e Summarie s disseminate dto investors , Nade l represente dtha t th e Hedg e Fund s were generatin g th e annual return s reflecte di n Tabl e 3 , below , primaril y throug h tradin g i

n th e quadrupl e Qs.* *

" Th e tem i "Quadmpl e Qs " (ticke r symbol : QQQQ ) refer s t o th e NASDAQ-10 0 Trackin g Stock , a n exchange-trade dfun

d("ETF" ) liste don th e NASDA Q intende dt o trac k th e NASDA Q index .

1 2Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 1 6 o f 5 3

Tabl e 3 : Fun d Performanc e a s Represente d i n Executiv e Summarie s Yea r 200 2 200 3 200 4 200 5 200 6 200 7 2008 * Valhall a

21.59 % ALSW o 28.96 % 30.19 % 19.99 % 19.24 % 10.97 % Victor

y 40.93 % 42.52 % 30.30 % 25.90 % 18.94 % 19165 % 11.82 % Vikin g

26.98 % 46.42 % 30.46 % 27.40 % 19.08 % 20.60 % 11.43 % Vikin g IR

A 26.88 % 45.23 % 29.93 % 26.36 % 18.93 % 20.55 % 11.52 % Victor

y IR A N/A 30.43 % 32.16 % 27.31% * 19.50 % 20.02 % 11.72 % Scoo p Rea l Estate N/ A 

### n/ A 48.67 % 32,14 % 21.15 % 21.75 % 12.31 % * Result s are fo

r a n incomplete year . Whil e Nade l di d trad e i n quadruple-Qs , he di d no t achiev e fo

r th e Hedg e Fund s th e amoun t o f retum s h e represente d t o investors . Rather , base d o n th e document s th e Receiver' s financia

l exper t ha s analyze d t o date , th e Hedg e Fund s a s awhol e los t significant sums . Specifically , Tabl e 4 , below , show s th e actual accoun t profit s an d losse s fo

r th e Hedg e Fund s fo

r th e indicate d time . Tabl e 4 : Actua l Profit s an d Losse s fo r th e Hedg e Fund s Accoun t Nam e Scoo p Rea

l Estate Ltd . 2/1/04-12/31/0 8 Valhall aInvestmen t

Partners , L P 10/01/02-12/31/0 8 Vikin g FundLL C 3/01/03-12/31/0 8 Vikin g IR A Fun dLtd . 3/01/03-12/31/0 8 Victor y Fund , Ltd . 6/01/02-12/31/0 8 Victor y Fund , Ltd . 2/01/03-8/31/0 3 Victor y IR A Fund , Ltd . Hedg e Fun dTota l Accoun t Profit/(Losses ) ($6,637,880 ) $2,863,87 5 ($8,073,752 ) ($2,053,443 ) $1,825,70 1 ($66,776 ) ($5,941,164 ) ($18,083,439 ) Overal l Annualize d

Rat e o f Retur n -33.35 % 3.98 % -19.40 % -24.53 % -16.70 % -18.45 % -18.63 %

1 3Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 1 7 o f 5 3

Betwee n 200 2 and2008 , th e highes t annualize drate o f

retur n Nade l appear s t o hav e achieve dwa s approximatel y 4% , whil e th e res t o f th e Hedg e Fund s experience dannualize d retum s of-16.70 % t o -33.25% . Althoug h thes e actual performanc e number s demonstrat e th e disparit y betwee n wha

t Nade l an dother s were claimin g th e Hedg e Fund s were achievin g an d th e retum s th e Hedg e Fund s were actuall y achieving , th e performanc e o f eac h individua

l Hedg e Fundi s no t

significan t

becaus e i

t appear s tha t

Nade l arbitraril y allocate ddail y result s o f tradin g transaction s amon g th e Hedg e Funds . Thi s activity resulte di n th e comminglin g o f th e Hedg e Funds ' asset s andmake s th e performanc e result s o f eac h individual Hedg e Fun d immaterial . I

n short , Nade l wa s losin g significan t sum s o f money whil e representin g tha t h e wa s achievin g annual retum s fro m18.93 % t o 48.67 % (for year s wit h ful l activity) . Further , a s show n i

n Tabl e 5 , below , whil e th e Hedg e Funds ' account s experience d losses , al l bu

t on e o f Nadel' s personal account s an dothe r account s maintaine dessentiall y fo r th e benefi t

o f Nade l andi

n th e sol e contro l o f

Nade l (collectivel y refene dt o herei n a s "Nadel' s Accounts" ) experience dsignifican t gains . Tabl e 5 : Actua l Profit s an dLosse s fo r Nadel' s Account s Accoun t Nam e Scoo p Capital LLC 12/01/04-12/31/0 8 Scoo p Managemen t 10/01/02-12/31/0 8 Arthu r Nade l 6/01/02-10/31/0 8 Marguerit e Nade l 8/01/07-1/30/0 9 Nadel' s Account s Tota l Accoun t Profit/Losse s $11,331,46 4 $737,14 1 $10,781,02 9 $10,03 3 $22,859,66 7 Overal l Annualize d

Rat e o f Retur n 49.37 % 36.72 % 71.62 % -15.49 %

1 4Cas e 8:09-cv-00087-FlAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 1 8 o f 5 3

Th e tradin g activit

y i n th e Hedg e Funds ' account s andNadel' s Account s appear s to hav e been essentiall y th e same , an dtradin g i n thos e account s wa s don e concunently . Virtuall y all tradin g allocate dt o ever y accoun t wa s i n quadruple-Qs . Give n th e dramati c difference s i

n tradin g result s i

n Nadel' s account s a s compare dt o th e Hedg e Funds ' account s an dpreliminar

y informatio n receive dby th e Receive r concemin g Nadel' s tradin g practices , th e Receiver

believe s tha

t thi s evidenc e ma

y indicat e tha

t Nade l engage di

n afraudulent practic e know n a s "chen y picking. " I n cherry picking , th e trade r allocate s profitabl e trade s to himsel f an dunprofitabl e trade s to clients . See , e.g. , S.E.C . v. K . W . Brow n an dCo. , 55 5 F . Supp . 2d1275 , 1302-130 7 (S.D . Fla . 2007 ) (holdin g tha t "cherry-picking " day-tradin g schem e operate dby officer s constitute dschem e t o defrau dunder Securitie s Exchang e Act) . Analysi s o f

th e tradin g activity andcas h flows i s ongoing . However , i n light o f th e fac t tha t Nade l trade dth e sam e investment s fo r al l Hedg e Fund s andth e account s h e owne dand/o r controlle dfo

r hi s benefi t

andtha t ther e wa s awid e disparity betwee n th e result s allocate dto th e Hedg e Funds ' account s andthos e allocate dt o Nadel' s Accounts , ther e i s n o apparen t logical explanatio n othe r

tha n th e imprope r

diversio n o f

profitabl e transaction s by Nadel . ACTION S TAKE N B Y TH E RECEIVE R Sinc e hi s appointmen t

o n Januar

y 21 , 2009 , th e Receiver

ha s take n anumbe r

o f step s t o fulfill hi s mandate s under th e Orde r Appointin g Receiver , describe di n Sectio n 11 , above , IV . Securin g th e Receivershi p Estate . A . Takin g Possessio n o f Defendants ' Headquarters . O n th e da

y o f hi s appointment , th e Receive r too k possessio n o f

th e Receivershi p Entities ' office s a

t 161 8 Mai n Street , Sarasota , F L 3423 6 (th e "Office") . Th e Offic e wa s

1 5Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 1 9 o f 5 3

usedb y Nade l a s th e headquarter s fo r administerin g hi s contro l o f th e Investment

Managers , Hedg e Funds , an dothe r Receivershi p Entities . Th e Receiver secure dth e premise s by changin g th e lock s an dinventorie dall o f th e physical propert

y a t th e premises . Th e Receive r provide dchang e o f

addres s notification s t o th e Unite dState s Posta l Servic e andFedera

l Express , a s wel l a s al l know n servic e provider s to th e Receivershi p Entities . Th e Receiver als o ende dth e Office' s lease ; turne dove r th e keys ; an dsol dth e offic e fumitur e an dothe r item s fo r $3,500.00 . All o f

th e document s fro

mth e Offic e hav e been move dto th e Tamp a offic e o f Fowler White Bogg s P.A . ("Fowle r White") . Th e Receive r

als o remove dseveral server s an dcomputer-relate dequipmen t fro mth e premise s tha

t wer e use db

y Nade l an dth e entitie s h e controlled . Th e Receiver retaine d experience dforensi c informatio n technolog y expert s wit h th e firmE-Hounds , Inc . ("E

Hounds") , to assis t

i n securin g andanalyzin g th e electroni c dat ao n th e computers . E

Hound s personne l hav e possessio n o f th e equipment , hav e secure dth e data , andare underwa y i n thei r forensi c analysis . B . Securin g Receivershi p Funds . At th e outse t

o f th e Receivership , approximatel y $556,758.3 3 i n cas h andcas h equivalent s i

n financia

l account s title di

n th e name o f

th e Hedg e Fund s an dInvestmen t Manager s wer e identifie dandfroze n pursuan t

t o th e Nade l TR O an dth e Preliminar y Injunction , itemize da s follows :



## .^m^^mm:::^- : fc"... Scoo p Managemen

t Valhall aInvestmen

t Partners Victor y IR A Fun d $30,343.5 3

$16,248.6 8 $134,101.5 8

1 6Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 2 0 o f 5 3

VictotyFund ; Vikin g IR A Fund VildngFun d; Vikin g Managemen t $80,686.7 1 $70,212.6 5 = $56,896.0 7 $8,897.2 5 I n addition , cas h an d cas h equivalent s i n financial account s title di n th e nam e o f othe r Receivershi p Entitie s a

t th e tim e thos e entitie s were brought into receivershi p were approximatel y $626,828.06 , itemize da s follows :

1/27/0 9 (E> #17 ) 1/27/0 9 (Doc . 17 ) ,2/11/0 9 (Doc . 44 ) 2/11/0 9 (Doc . 44 ) 

## mim(im- M i n 1/0 9 (Doc . 44 ) 3/9/09(1^68 ) 3/17/0 9 (Doc . 81 ) 3/17/0 9 (Doc , 8B ^ 7/15/0 9 (Doc . 153 ) 

## smmm^a.^'Z ) V^nip e Je t Center j LL C Tradewind , LL

C Laure l Moimtai n Preserve , LL C Laure l Preserve , LLC Mni^erit e J . Nade l Rev . Tms t Laure l Mtn . Preserv e Homeowner Assoc . Guy-Niuie l Foorafetipn , hic . Lime Avenu e Enterprises , LL C A ViotortM Garde n Florist , LL C Vikin g Oi l & Gas , LL C Hom e Fron t

fiMmes, LL C $69,761.4 1 $77,782.7 2 $5,328.0 3 $22,640.2 2 $381,142^1 4 $0.0 0 $58,092.4 9 $1,623.8 9 $10,456.9 6 $0.0 0 n^ * Thus , total cas h a

t th e inceptio n o f

th e Receivershi p an d a s th e Receivershi p wa s expande dto includ e eac h additiona l Receivershi p Entit y indicate dwa s approximatel y $1,183,586.39. ' Upon hi s appointment , th e Receive r wa s initiall y concerne dtha t th e Receivershi p Entitie s might

hol dposition s i

n volatil e securitie s tha

t woul drequire a

n exi t strateg y to avoi d o r minimiz e losses . Th e Receive r immediatel y investigate dth e natur e o f th e Receivership' s holding s an d determine dtha t n o suc h exi t

strategie s were require dbecaus e almos t al l o f th e relativel y liqui dholding s were i n cas h o r cas h equivalents . I n light o f th e imminen t

sal e o f Hom e Fron t

Homes , LLC (discusse di n Sectio n V.A.8 , below) , th e Receive r

doe s no t maintai n ful

l authorit y ove r thi s checkin g account . Therefore , th e Receive r

doe s no t includ e th e balanc e o f

thi s accoun t

fo r fun daccountin g purposes . * Thi s amoun t

doe s no t

includ e an y sumfo

r non-cas h o r

non-cas h equivalen t

asset s th e Receive r ha s recovered . Fo r

adiscussio n o f

thes e assets , pleas e refer

t o Sectio n V , below) .

1 7Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 2 1 o f 5 3

Th e Receive r

coordinate dwit

h th e SEC to mov e swiftl y to freez e all fund s o f whic h the y wer e aware . Th e Receive r

an dhi s attorney s engage di n apreliminar

y revie w o f document s andother

informatio n fo

r th e purpos e o f

identifyin g institution s tha t potentiall y hel drelevant

financia l account s o r

line s o f credit . Th e Receive r

immediatel y forwarde d copie s o f th e asse t

freez e order s t o th e pertinen t institution s andconfirme dthat the y understoo dthei r

obligation s under

th e freez e orders . Receivershi p fund s are cunentl y bein g hel di n five institutions : (1 ) Northe mTrus t Bank , N.A. ; (2 ) Wachovi aBank , N.A. ; (3 ) Branc h Bankin g an dTrus t Company ("BB&T") ; (4 ) Ban k o f Coweta ; an d(5 ) Thomasvill e National Bank . VJ C als o maintain s a n insignificant

amoun t o f fund s i n asmal l operatin g accoun t wit h Ban k o f America . Al l Receivershi p fund s are cunentl y bein g hel di n non-interes t

bearin g accounts . Th e Receive r i s contemplatin g th e mos t appropriat e actio n to tak e wit h respec t t o thes e fund s i

n ligh t o f th e cunen t state o f th e economy an dfinancial institutions . He wil l likel y consolidat e th e fund s into on e to thre e institution s andwil l explor e th e relativ e benefit s an drisk s o f movin g th e fund s into interest-bearin g account s and/o r revenue-generatin g investments . C . Locatin g Additiona l Funds . On e o f th e Receiver' s highes t

prioritie s i s t o locat e an drecove r any additional funds . Th e Receiver

ha s retaine daforensi c accountin g firmt o assis t i n tracin g funds . A s o f

th e date o f thi s report , th e Receive r

ha s als o identifie dan drecovere da n additional $120,000 ^ a s wel l

' Thi s amoun t

i s comprise do f

tw o $60,00 0 payment s th e Receive r recovere dfro

mtw o individuals . Th e Receive r determine dthat

th e transfer s mad e t o thes e individual s in th e amoun t o f $60,00 0 eac h wer e a

n improper

diversio n o f

investo r fund s an dobtaine dcour t order s t o recove r

thes e funds .Cas e 8:09-cv-00087-F^L-TB M Documen t 17 6 File d 08/17/200 9 Pag e 2 2 o f 5 3

a s acertificate o f

deposi t ("CD" ) issue dby Norther n Trus t Ban k fo r approximatel y $1. 5 million . There i s als o aloa n wit h Northe mTrus t

fo r $1. 5 millio n wit

h amaturit

y date o f December 1 , 2011 . Th e Receive r

i s considerin g th e bes t

cours e o f actio n t o tak e wit

h respec t to th e Northe mTrus t

C D an dloan . Th e Receive r wil l continu e t o diligentl y investigate an d wil l update th e Cour

t an dth e investor s i f

additiona l fund s are located . D . Receivershi p Accountin g Report . Attache da s Exhibi t

A t o thi s Interi mRepor

t i s acas h accountin g repor t showin g th e amount o f money on han da

t inceptio n o f

th e Receivershi p (Januar y 21 , 2009 ) les s operatin g expense s plu s revenu e throug h Jun e 30 , 2009 . Thi s cas h accountin g repor t doe s no t reflec t non-cas h or

non-cas h equivalen t

assets . Thus , th e valu e o f al l property discusse dSectio n V , below , i s no t

include din thi s accountin g report . Fro mMa y 1 , 2009 , throug h Jun e 30 , 2009 , th e Receiver

receive d$424,280.0 8 i

n busines s income fro

mongoin g operation s o f som e Receivershi p Entities; ^ $23,900.5 4 i n cas h an dsecurities ; $54,082.5 0 i n interest/dividen d income ; $200,00 0 i

n busines s asse t

liquidation ; an d$589,313.1 7 i n third-party litigatio n income . (Ex . A. ) E . Obtainin g Informatio n fro mThir dParties . Sinc e obtainin g contro l o f th e Receivershi p Entities , th e Receiver an dhi s professional s hav e haddiscussion s - includin g continuin g discussion s - wit h anumber

o f peopl e associate dwit

h Nade l and/o r

th e Receivershi p Entities , includin g * Officer s o f

som e o f th e Receivershi p Entitie s

o ^ A s discusse di

n Sectio n V.A , below , muc h o f th e entities ' busines s incom e i s derive dfro m rental payments . Th e Venic e Je t Center' s incom e i s derive dfro mfiael sale s an dstorag e o f aircraft .

1 9Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 2 3 o f 5 3

* Person s responsibl e fo r maintainin g th e financia l book s o f

Receivershi p Entitie s * Person s responsibl e fo r operatin g th e busines s o f Receivershi p Entitie s * Person s responsibl e fo r performin g accountin g services , an d * Person s responsibl e fo r administerin g th e Hedg e Funds . Th e Receiver

an dhi s professional s hav e als o reviewe ddocument s locate di n th e Office ; document s obtaine dfro mth e accountan t

fo r several Receivershi p Entities ; informatio n store do n th e Receivershi p Entities ' compute r network ; document s obtaine d fro mother businesse s controlle dby Nadel ; document s obtaine dfro mfinancia

l institution s andothe r thirdparties , includin g lawyer s an dother s wh o assiste dNadel' s businesse s wit h thei r transactions ; an dinformatio n availabl e i n th e publi c record . V . Asse t

Analysi s an dRecovery . A . Expansio n o f

Receivershi p t o Includ e Additiona l Entities . A s aresul t

o f th e revie w o f

thes e record s ando f

th e discussion s note dabove , th e Receiver sought an dsuccessfull y obtaine dth e expansio n o f th e Receivershi p to include : Venic e Je t

Center , LLC ; Tradewind , LLC ; Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; Laure l Mountai n Preserv e Homeowner s Association , Inc. ; th e Marguerit e J . Nade l Revocabl e Trus t

UA D 8/2/07 ; th e Guy-Nade l Foundation , Inc. ; Lime Avenu e Enterprises , LLC ; A Victorian Garde n Florist , LLC ; Vikin g Oi l & Gas , LLC ; an dHom e Front Homes , LLC . Alon g wit

h Summer

Plac e Developmen t

Corporation , thes e entitie s wil l hereinafter b e refene dt o collectivel y a s th e "Additiona l Entities." ' Th e Receiver' s investigatio n reveale d

' Th e Receive r

gaine dcontro l o f

Summer Plac e Developmen t

Corporatio n by virtu e o f

Scoop Capital' s ownershi p interes t i n that entity . However , fo

r variou s reasons , aforma l order expandin g th e Receivershi p t o includ e thi s entit y ha s no t bee n sought .

2 0Cas e 8:09-cv-00087-F^L-TB M Documen t 17 6 File d 08/17/200 9 Pag e 2 4 o f 5 3

tha t th e Additional Entitie s were purchase dand/o r fundedwit

h mone y derive dfro

mNadel' s fraudulen t investment

scheme . Th e followin g discussio n o f th e Additional Entitie s include s adescriptio n o f asset s th e Receiver

ha s acquire da s aresul t

o f th e businesses ' inclusio n i n th e Receivership ; known encumbrance s relate dt o thos e assets ; an daction s take n b y th e Receive r

wit h respec t t o thos e assets . Wher

e possibl e th e Receive r

ha s include destimate dvalue s o f thes e assets . However , given th e state o f

th e U.S . economy a

t th e tim e o f

thi s Repor

t an dth e possibilit

y fo r additional informatio n no t ye t uncovere db

y th e Receiver , i

t i s importan t

t o not e tha t an y suc h estimations , valuation s o r appraisal s are subjec t

to change . Du e t o th e poo r state o f th e rea l estate markets , th e estimate s provide dma y diffe r markedl y fro

mth e actual amount s realize dupo n th e sellin g o f an y rea l property . 1 . Venic e Je t

Center , LLC . Venic e Je t

Center , LL C ("VJC") , i s aFlorid alimite dliability compan y formedi n Apri l 2006 . Nade l wa s it s managin g member an dregistere dagent , an dit s principal addres s i s th e Office . Th e asset s o f VJ C wer e purchase dwit h proceed s o f

Nadel' s scheme , andover tim e additional proceed s o f th e schem e were transfene dt o VJC . VJ C i s aviabl e busines s wit h potential to generat e asset s for th e Receivershi p estate . On Januar y 27 , 2009 , th e Cour

t expande dth e Receivershi p to includ e VJC . VJ C i s a full y operatin g fixed-base operator , o r "FBO, " an dinclude s aflight school , fuelin g service , hanga r rentals , andacafe . Sinc e th e Receiver' s appointmen t a s Receive r

o f VJC , h e ha s take n contro l o f

i t an di s continuin g t o operat e th e business . Th e Receive r i s continuin g VJC' s longstandin g pursui t o f apermi t t o buil dne w hangar s a t th e VJC . Th e Receiver

2 1Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 2 5 o f 5 3

believe s tha

t th e permi t

to buil dmor

e hangars , whic h wa s requeste dwel l befor e th e Receiver' s appointment , wil l make th e VJC more attractiv e t o potentia l purchaser s and ultimatel y wil l increas e th e valu e o f th e business . Par t 1 6 Complain t

Agains t Cit v o f Venic e Th e Receiver

ha s encountere dsome problem s i n connectio n wit

h th e ongoin g management

o f th e VJC . Th e Cit

y o f Venic e (th e "City") , i

n contraventio n o f

it s leas e and specifi c directio n fro

mth e Federa

l Aviatio n Authority ("FAA") , ha s refuse dt o grant VJC authorizatio n to develo p fou r hangar s a

t th e VJ C facility . Th e Cit y official s hav e publicl y announce dthei r

intent t o terminat e th e VJC' s leas e wit h th e Cit y an dtak e ove r

VJC' s operations . Th e Receive r continue s to vigorousl y resis t an y unwanante dinterferenc e b y th e Cit y wit h wha t appear s t o b e asubstantial andvaluabl e property right o f VJ C (an do f

th e Receivershi p estate) . O n Ma y 14 , 2009 , th e Cour

t grante dth e Receiver' s reques t fo r leav e to file acomplain t

agains t th e Cit y o f Venic e pursuan t

to Thl e 1 4 o f

th e Cod e o f

Federa l Regulations , Par

t 16 . (Doc . 132. ) O n o r abou t Jul y 2 , 2009 , o n behal f o f th e VJC , th e Receiver serve dth e complain t

on th e Cit

y an dfiledi

t wit h th e FAA' s Offic e o f

th e Chie f Counse l (Docke t

No . 16-09-05) . Th e City' s answe r t o th e complain t

i s du e o n o r

befor e Septembe r

2 , 2009 , per

a n extensio n grante db

y th e FAA . Th e Receiver i s als o contemplatin g filing alawsui t agains t th e Cit y base do n it s conduc t wit h respec t to Receivershi p assets . Th e Receiver

ha s possessio n an dcontro l o f abuildin g owne db y VJ C locate da t 40 0 Airpor t Avenu e East , Venice , Florida , 3428 5 (th e "VJ C Building") . Th e VJ C Buildin g ha s on e know n encumbrance : aloa n wit h Northe mTrus t

Bank , N.A. , on whic h there i s a

2 2Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 2 6 o f 5 3

remainin g balanc e o f

$1,963,790.00 . Th e Receive r ha s conducte dmarketin g effort s regardin g th e VJ C an dth e VJC Building . Partie s intereste di n purchasin g thi s propert y shoul dcontac t

th e Receiver . 2 . Tradewind , LLC . Tradewind , LL C ("Tradewind" ) wa s forme di n Delaware i

n Januar y 200 4 and registere dfo

r th e first tim e i n Florid ai

n Marc h 2008 . Nade l wa s Tradewind' s managin g member an dregistere dagen t

andit s principal addres s i s th e Office . Tradewin down s an d control s five plane s an

don e helicopte r

andown s 3 1 airpor

t hangar s a

t th e Newnan-Cowet a Count y Airpor t i n Georgi a(th e "Georgi aHangars") . Th e Receiver' s investigatio n reveale d tha t Tradewin dwa s fundedwit h mone y fro

mNadel' s scheme . Tradewin di s aviabl e busines s wit

h potential t o generat e asset s fo r th e Receivershi p estate . O n Januar

y 27 , 2009 , th e Cour

t expande dth e Receivershi p to includ e Tradewind . Tradewin di s afull

y operatin g business . Sinc e th e Receiver' s appointmen t a s Receiver

o f Tradewind , h e ha s take n contro l o f i t an di s continuin g to operate th e business . Tradewin d collect s approximatel y $28,00 0 i n monthl y ren t

(mainl y fro

mth e hangars ) an dincur s varyin g monthl y expenses , whic h includ e lan drent , loa n payments , payroll , andvariou s utilities . Th e Receive r i s entertainin g offer s t o purchas e thi s busines s o r an y o f it s assets . Th e Receive r

ha s possessio n an dcontro l o f th e Georgi aHangars , whic h hav e one know n encumbrance : aloa n wit h th e Bank

o f Cowet awit

h aremainin g balanc e o f approximatel y $950,953.41 , an dmonthl y payment s o f $8,055 . There i s als o monthl y rent o f $3,079.8 9 du e to th e Newnan Cowet aAviatio n Authority . Th e Receive r ha s bee n makin g thes e monthl y payment s a s he believe s the y ar e in th e bes t interes t o f th e Receivership .

2 3Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 2 7 o f 5 3

Th e Receiver

als o acquire dpossessio n an dcontro l o f th e five plane s an dhelicopter . The followin g tabl e show s th e year , model , an dknow n encumbrance s relatin g t o eac h aircraft . 

### [:^:,--md0-:-:: ^ Pipe r PA

28/14 0 Cessn a15 2 Learje t 31 A Citatio n Baro n Schweizer 30 0 

## ;;,yp r 197 1 197 8 199 6 199 2 197 7 199 7 Aircrar e i

> Airplan e Airplan e Airplan e Airplan e Airplan e Helicopte r « v • •

• • ••;# ; • •' • iCnown

- £ttii^mbran(»»'

- - .. . t ? None . None . Loa n wit h General Electri c Capital Corporatio n ("GECC" ) entere dint o o n Ma y 17 , 2006 , fo

r approximatel y $2. 4 million . Loa n wit h VF S Financing , Inc . ("VFS" ) entere dint o o n Ma

y 23 , 2008 , fo

r approximatel y $2. 1 millio n None . None . il^onT^b y Re^lv« r

Settle dwit

h GECC ; dispose do f

Learjet Settle dwit

h VFS ; dispose do f Citatio n Sol d On Apri l 17 , 2009 , th e Cour t authorize dth e sal e o f

th e Schweizer

helicopte r

fo r $200,000.00 . (Doc . 108. ) On Ma y 1 , 2009 , th e Cour

t authorize dth e Receiver' s settlement s wit h GEC C andVF S t o dispos e o f th e Learjet

an dth e Citation , respectively , i n ful l satisfactio n o f

th e respectiv e loans . (Doc . 119. ) Becaus e i t appeare dtha

t th e aircraf

t were value dsignificantl y les s tha n th e amoun t

o f th e loan s on th e aircraft , th e Receive r determine d tha t thes e settlement s were i n th e bes t

interes t o f th e receivership . Th e Receiver' s determinatio n t o abando n thes e aircraf t wa s du e in larg e part

t o th e expens e o f

continue d maintenanc e o f

th e aircraf

t an ddifficultie s i

n marketin g th e aircraft . Th e Receive r

i s cunentl y evaluatin g th e valu e o f th e othe r thre e aircraf

t and , althoug h the y ar e title di

n th e name o f

Tradewind , plan s t o includ e the ma s additional asset s o f th e VJC .

24Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 2 8 o f 5 3

3 . Laure l Mountai n Preserve , LLC ; Laure l Preserve , LLC ; an d Laure l Mountai n Preserv e Homeowner s Association , Inc . Laure l Mountai n Preserve , LL C ("Laure l Mountain") , wa s formedi n Florid ai

n December 2003 . Nade l wa s Laure l Mountain' s manage r an dmember , andit s principal addres s i s th e Office . Laure l Mountai n wa s "withdrawn " a s alimite dliabilit y compan y i

n Januar y 2006 . Laure l Preserve , LL C ("Laure l Preserve") , wa s formeda s aNort h Carolin alimite d liabilit y compan y i

n Februar

y 2006 . Nade l wa s Laure l Preserve' s registere dagen t and manager , an dit s principal addres s i s th e Office . Additionally , Laure l Preserve' s "Registere d Office " addres s wa s ahom e i n Fairview , Nort

h Carolin atitle di

n th e name s o f

Nade l an dhi s wife . Althoug h Laure l Preserve' s 200 6 Operatin g Agreemen t identifie s Nade l andhi s wif e a s member s o f

Laure l Preserv e wit

h eac h havin g mad e a"capital contribution " o f $750 , th e Laure l Preserv e 200 7 federa l income tax retu midentifie s Scoo p Capital a s owne r o f 100 % o f Laure l Preserve . Th e Laure l Mountai n Preserv e Homeowner s Association , Inc . (th e "HOA") , i s aNort

h Carolin anon-profi t

corporatio n formedi

n March 2006 . Nade l wa s th e HOA' s registere dagent , an dit s principal addres s wa s th e Fairview , Nort h Carolin ahome . Documentatio n reviewe dandinformatio n obtaine db y th e Receiver

show s tha

t Laure l Preserv e hold s titl e t o approximatel y 42 0 acre s nea r Asheville , Nort

h Carolin ai

n Buncomb e an dMcDowel l counties , intende dfo r developmen t

o f home-site s (th e "Laure l Mountai n Property") . Th e Laure l Mountai n Propert y wa s originall y purchase db y Laure l Mountai n i n 200 3 an dthe n "sold " t o Laure l Preserv e i n Februar y 2006 . Laure l Mountai n provide d financing fo

r that purchas e i

n th e for mo f a$2,900,00 0 loa

n to Laure l Preserve . Accordin g t o documentatio n retrieve dfro mth e Office , Laure l Mountai n an dLaure l Preserv e receive d

2 5Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 2 9 o f 5 3

significant fundin g i

n th e for mo f "loans " fro

mScoo p Capital , Scoo p Management , Tradewind , Nade l an dMrs . Nade l andBB& T Bank . On Februar

y 11 , 2009 , th e Cour

t expande dth e Receivershi p t o includ e Laure l Mountain , Laure l Preserve , an dth e HOA . Sinc e th e Receiver' s appointmen t a s Receive r

o f thes e entities , h e ha s take n contro l o f the man di s workin g o n marketin g fo r sal e th e Laure l Mountai n Property . Thi s propert y currentl y doe s no t

generat e an y income . Th e Laure l Mountai n Propert y encompasse s 2 9 lots , includin g 2 3 estate-size dand6 cottage-size dlots . Ther e i s als o acabi n hom e on thi s propert y that , accordin g to th e Buncomb e Count

y Propert y Appraiser , i s value da t $319,800 . Th e Laure l Mountai n Property' s infrastructure i s full y developed : infrastructure an dutilitie s are currentl y i n plac e an dar e full y functional . Th e Laure l Mountai n Propert y ha s thre e know n encumbrances . Th e first encumbranc e i s a$360,157.3 7 loa n fro mBB& T Bank . Th e secon dencumbranc e i s a $1,900,00 0 interes t

onl y loa n fro mWachovi aBank , N.A . Ther e i s amonthl y paymen t o f $5,149.6 6 du e o n thi s latter loa n andth e Receive r

presentl y i s no t

makin g payment s on thi s loan . Th e thir dencumbranc e i s a n easemen t

o f approximatel y 169 acre s o f th e Laure l Mountai n Property , whic h wa s grante dt o alan dconservanc y i n 200 5 (th e "Conservanc y Easement") . I

t appear s that

thi s donatio n was mad e i n par t fo r th e Nadels ' ow n tax benefit . Th e Receive r

ha s determine dtha

t i t woul dlikel y b e i

n th e bes t interest s o f

th e Receivershi p t o recove r thi s easemen t

fro mth e conservanc y a s i

t ma y generat e a

n exponentia l increas e i

n th e valu e o f

th e ful l acreage . Th e Receive r

plan s to file a

n actio n t o recove r

th e Conservanc y Easemen t i n th e nea r future .

2 6Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 0 o f 5 3

Th e Receive r

ha s consulte dwit

h arealto r

wh o previousl y liste dth e Laurel Mountai n Propert y an di s entertainin g offer s to purchas e or proposal s t o marke t

thi s develope dpropert

y either by lo t o r i n it s entirety . Th e Receive r i s stil l evaluatin g th e cunen t valu e o f thi s property , but

i t appear s that

th e valu e i s higher

than th e amoun t

o f th e encumbrances . Partie s intereste di

n purchasin g thi s property shoul dcontac t th e Receive r

directly . For more informatio n regardin g th e Laure l Mountai n Property , pleas e visi t http://www.laurelmountainpreserve.com .

4 . Marguerit e J . Nade l Revocabl e Trus t UAD 8/2/2007 . Th e Marguerit e J . Nade l Revocabl e Trus t Under Agreemen t

Date d8/2/200 7 (th e "Trust" ) wa s create don Augus t 2 , 2007 . Th e truste e i s identifie da s Mrs . Nadel . Th e Receiver' s investigatio n reveale dtha t th e Trus t was funde dentirel y wit

h proceed s o f

Nadel' s schem e throug h (1 ) atransfe r o f $500,00 0 fro

mScoo p Managemen t

i n Augus t 200 7 and(2 ) a transfer o f $150,00 0 fro

mScoo p Capital on th e da y befor e Nade l fled. I

t als o reveale dthat Nade l controlle dth e accoun t i n whic h th e mone y hel db y th e Trus t purchase dan

dsol d securities . Significantly , a s allege di n th e criminal complain t

agains t Nadel , i n a n apparen t note Nade l lef

t fo r hi s wif e befor e fleeing, h e instructe dher t o "us e th e trus t

(yours ) t o you r benefi t a s muc h an da s soo n a s possible. " Unite dState s v . Nadel , Cas e No . 0 9 MA G 169 (S.D.N.Y.) , Compl . ^ 17 , attache da s Exhibi t 1 4 t o th e Receiver' s Declaratio n i n Suppor t o f Secon dUnoppose dMotio n to Expan dreceivershi p (Doc . 37-15) . On Februar

y 11 , 2009 , th e Cour

t expande dth e Receivershi p t o includ e th e Trust . Sinc e th e Receiver' s appointmen t a s Receive r

o f thi s Trust , h e ha s take n contro l o f it s ban k account . Th e Receive r

ha s use dthes e fund s fo

r Receivershi p cost s an dexpenses .

2 7Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 1 o f 5 3

5 . Guy-Nade l Foundation , Inc . Th e Guy-Nade l Foundation , Inc . (th e "Foundation") , i s aFlorid anon-profi t corporatio n formedi

n December

200 3 fo r "charitable , educational an dscientifi c purposes. " Nade l wa s it s incorporato r an dregistere dagent

and , accordin g t o th e Foundation' s 200 6 federa l ta x retum , als o it s President . Th e Foundation' s principal addres s i s th e Office . O n March 9 , 2009 , th e Cour t expande dth e Receivershi p t o includ e th e Foundation . Sinc e th e Receiver' s appointmen t a s Receiver

o f th e Foundation , h e ha s take n contro l o f i t an di s workin g on marketin g th e rea l propert y owne dby th e Foundation . Th e Receiver

ha s gathere dinformatio n tha t indicate s th e Foundatio n wa s fundedwit h proceed s o f

Nadel' s scheme , whic h wer e transfene ddirectl y fro mScoo p Capita

l or indirectl y throug h transfer s fro mth e Nadels ' personal accounts . I n addition , i

n December 200 3 andDecember

2004 , th e Foundatio n wa s deede dapproximatel y 2 2 lot s locate di n Nort h Carolin afro

mLaure l Mountai n andNade l an dhi s wife . Thes e lot s are essentiall y adjacent to eac h other . Th e lot s appea r t o hav e been purchase dby Laure l Mountai n an dth e Nadel s a s par t o f th e same general transactio n i n whic h Laure l Mountai n purchase dth e Laure l Mountai n Property . A

t th e tim e o f

thos e transactions , Nade l wa s alread y perpetratin g hi s scheme , an dessentiall y al l o f th e Nadels ' income wa s derive dfro mthat scheme . Additionally , th e Receive r ha s possessio n andcontro l o f tw o smal l parcel s o f unimprove dlandi

n Thomasville , Georgi a(thi s lan di s separat e fromth e Thomasvill e Propert y discusse di

n Sectio n V.B.I , below ) owne dby th e Foundation . Th e Receiver ha s no t ye t determine dth e valu e o f thi s property . Partie s intereste di n purchasin g thi s propert y shoul dcontac t

th e Receiver .

2 8Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 2 o f 5 3

6 . Lim e Avenu e Enterprises , LLC , an dA Victoria n Garde n Florist , LLC . Lim e Avenu e Enterprises , LL C ("Lime" ) wa s formedi n Florid ai

n Augus t 2006 , an d Nade l wa s amanagin g membe r o f Lime . Lim

e own s abuildin g locate da t 59 9 Nort h Lim e Avenue , Sarasota , Florid a3423 7 (th e "Lim e Building") . Lim e purchase dth e Lime Buildin g i n Augus t 2006 . Publi c record s andothe r informatio n reviewe dby th e Receive r indicate tha

t Lim e wa s formedb y Nade l andMrs . Nade l (wh o als o wa s amanage r o f Lime ) fo

r th e purpos e o f

purchasin g th e Lime Building . Th e Lim e Buildin g house s aflower shop , whic h i s owne db y A Victoria

n Garde n Florist , LLC ("Victoria n Garden") , whic h wa s formedi n Florid ai n Apri l 2005 . Th e Receiver' s investigatio n reveale dtha t Lime an dVictoria

n Garden were fundedwit

h proceed s fro

mNadel' s scheme . On March 17 , 2009 , th e Cour t expande dth e Receivershi p to includ e Lim e an d Victoria n Garden . Th e Receive r

ha s possessio n an

dcontro l o f

th e Lime Building . Th e Lim e Buildin g ha s on e know n encumbrance : amortgag e owe dto th e individual s wh o sol dth e buildin g to Lim

e on whic h th e balanc e i s approximatel y $600,000 . Th e Receiver

als o too k contro l o f

th e busines s an ddetermine dtha t ownershi p o f

th e florist wa s no t i n th e bes t

interes t o f th e Receivership . Th e flower sho p di dno t

hav e sufficient revenu e t o cove r

it s expenses , thu s th e Receive r originall y planne dto clos e th e business . Th e Receive r

ha s allowe dth e prio r

owne r to operat e th e flower

sho p an dwil l likel y seek

approval fromth e Cour t to abando n thi s business . Th e Receive r i s presentl y attemptin g t o negotiat e aresolutio n o f th e mortgag e relatin g to th e Lime Building .

2 9Cas e 8:09-cv-00087-F^L-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 3 o f 5 3

Th e Receiver

als o ha s possessio n an dcontro l o f tw o van s owne db

y Lime : a199 9 For dva n an da200 3 Dodg e van . Th e Receive r doe s no t hav e a n estimatio n o f

valu e o f thes e van s a t thi s time , an dther e are n o know n encumbrance s o n thes e vans . 7 . Vikin g Oi l & Gas , LLC . Vikin g Oi l & Gas , LL

C ("Vikin g Oil" ) i s aFlorid alimite dliability compan y formed i n Januar y 200 6 by Nei l V . Mood y an dChristophe r

D . Mood

y (th e "Moodys" ) t o mak e personal investment s i

n a n oi l an dga s venture . It s principal addres s i s th e Office . Th e Receiver' s investigatio n reveale dtha t Vikin g Oi l wa s fundedwit h proceed s fro

mNadel' s scheme . Th e fund s investe di n Vikin g Oi l were use dto purchas e a n investmen t

interes t i n Ques t Energ y Managemen t

Group , Inc . ("Ques t

EMG") . Betwee n Februar y 200 6 an dApri l 2007 , throug h Vikin g Oil , th e Moody s investe d$ 4 millio n to fun daworkin g interes t

i n Ques t EMG . A s discusse di

n Sectio n V.C.4 , below , th e Receiver als o ha s possessio n o f

promissor

y note fro mQues t EM G an dtw o individual s t o Valhall aInvestmen t Partner s i

n th e amount

o f $1,100,000 . On Jul y 15 , 2009 , th e Cour t expande dth e Receivershi p t o includ e Vikin g Oil . Sinc e th e Receiver' s appointmen t a s Receive r

o f thi s entity , h e ha s take n contro l o f i t andi s determinin g th e mos t

pruden t cours e o f

actio n t o take wit

h respec t t o th e workin g interes t

i n Ques t EMG . Th e Receive r

i s presentl y seekin g t o hire aconsultan t to valu e thi s investment . 8 . Hom e Fron t

Homes , LLC . Home Front

Homes , LLC ("Hom e Fron t Homes") , i s aFlorid alimited-liabilit y compan y that

wa s forme di

n 2006 . Nade l wa s th e sol e managin g membe r o f Hom e Fron t

30Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 4 o f 5 3

Homes , an

dScoo p Capita

l owne damajorit

y membershi p interes t

i n i t B y virtu e o f

thi s controllin g interest , th e Receive r assume dcontro l over

Hom e Front Home s befor

e i t wa s place di n receivership . Hom

e Front Home s i s engage di

n th e busines s o f

manufacturing , marketing , andsellin g energy-efficient homes . Home Fron

t Home s i s a

n operatin g business . Th e Receiver

institute dlitigatio n t o preserv e th e valu e o f Home Front

Home s for

th e Receivershi p estate . Hom e Fron t Homes , LL C v . Bria n C . Bishop , Cas e No . 2009-CA

2037N C (12t

h Jud . Cir. , Sarasot aCounty , Florida) . On behal f o f Home Front

Homes , th e Receiver suedBria

n C . Bishop , aforme

r employe e wh o als o hada n ownershi p interes t

i n Home Front

Home s fo

r breac h o f

non-compet e covenant s i n hi s employmen t

agreemen t

and o f apurchas e agreemen t

(wherei n Home Front

Home s purchase dth e assets , goodwill , an d customer s o f

Mr . Bishop' s company . Hom e Front , Inc.) , a s wel l a s breac h o f apromissor

y not e an dtortiou s interferenc e wit h abusines s relationship . Sinc e endin g hi s employmen t wit h Hom e Fron t Homes , Mr . Bisho p ha

dstarte dacompetin g busines s i n direc t violatio n o f hi s non-compet e agreemen t andha dsolicite dHom

e Front Home s customers . Thi s matte r

ha s been settle dan dth e litigatio n i s n o longer pending . Mr . Bisho p wa s ordere dt o compl y wit

h th e restrictiv e covenants , andth e compan y forgav e certai n purporte d deb t owe dfro

mMr . Bisho p t o Hom e Front Homes , whic h deb t

appeare duncollectible . Informatio n availabl e t o th e Receive r indicate s that

Bisho p ha s bee n violatin g th e Court' s orde r agains t hi mwit h impunity . Th e Receive r wil l likel y institut e contemp t proceeding s agains t Bisho p i n th e immediat e future . Followin g th e litigatio n wit h Mr . Bishop , th e Receive r (a s Receive r

fo r Scoo p Capital ) gaine dcontro l o f a75 % interes t

i n Home Front

Homes . O n o r

abou t Augus t 4 ,

3 1Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 3 5 o f 5 3

2009 , th e Receiver

entere dinto a

n agreemen t

to sel l Hom

e Fron t Home s i n exchang e fo

r $800,00 0 a s follows : $600,000.0 0 b y wire transfer

a s wel l a s asecure dpromissory note i n th e principal amount

o f $200,000.00 . On Augus t 10 , 2009 , th e Cour

t expande dth e Receivershi p to includ e Hom e Front Homes . (Doc . 170. ) Th e propose dsal e wil l provid e $280,00 0 to th e Receivership , whic h include s th e promissor y note , an dwil l giv e th e purchaser s th e opportunit y t o resolv e claim s o f

creditor s o f

Hom e Front Homes . Th e remainder o f th e sal e proceed s wil l b e pai dt o M& l Ban k to satisf y a$ 3 millio n loa

n tha t wa s secure db y th e asset s o f

Hom e Front Homes . Th e Receiver

wil l obtai n Cour

t approval to finalize th e sal e o f

Home Fron

t Home s andwil l file amotio n fo r approval i

n th e immediate future . I f th e Cour t approve s th e sale , th e closin g wil l take place , andth e promissory note wil l b e du e andpayabl e eightee n month s thereafter .

9 . Summe r

Plac e Developmen t

Corporation . Summer Plac e Developmen t

Corporatio n ("Summe r

Place" ) i s aFlorid acompany tha t wa s forme di

n 200 5 fo r th e purpos e o f

"an y an dall lawfu

l business. " Th e Receive r ha s no t sought aforma l orde r expandin g th e Receivershi p t o includ e Summer Place . However , a s o f Januar y 20 , 2007 , Nade l wa s amanagin g membe r o f Summer Place , an dScoo p Capital own s afifty-percent

interes t i n Summe r

Place . B y virtu e o f

thi s fifty-percent

interest , th e Receive r ha s no t assume dful

l contro l ove r

Summer Place , bu t

i s workin g wit

h th e other managin g member

an dfifty-percent

owne r i n directin g th e operatio n o f Summe r Plac e fo r th e benefi t

o f th e Receivershi p estate . Summer Plac e i s th e owne r

o f apropose daffordabl e residential housin g developmen t sit e in Manate e County , Florida . Summe r Plac e i s a

n operatin g business . Th e Receiver

3 2Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 6 o f 5 3

intend s to sel l Scoo p Capital' s equit y interes t i n thi s entity i

n amanner

whic h woul db e mos t beneficia l t o th e Receivershi p estate . Partie s intereste di n marketin g o r

purchasin g thi s busines s shoul dcontac t

th e Receive r

directly . B . Recover y o f

Rea l Property . I n additio n t o th e asset s discusse di n conjunctio n wit

h th e expansio n o f

th e Receivershi p i

n Sectio n V.A , th e Receive r ha s als o recovere danumber o f othe r assets , mos t o f whic h are i

n th e proces s o f

bein g valued , assessed , andotherwis e analyze dfo r liquidation , disposition , o r

othe r action . Again , give n th e state o f th e U.S . economy a

t th e tim e o f submissio n o f

thi s Report , th e Receive r emphasize s tha

t any estimates , appraisals , or valuation s ar e subjec t

to chang e becaus e o f

marke t forces . I n particular , du e t o th e poo r stat e o f th e rea l estat e markets , th e estimate s provide di n thi s sectio n ma

y b e significantl y differen t fro mth e amount s realize dupo n sellin g suc h rea l property . 1 . Thomasville , Georgia . Th e Receiver

ha s possessio n an dcontro l o f approximatel y 1 4 acre s i n Thomasville , Georgi a(th e "Thomasvill e Property") . Th e Thomasvill e Propert y encompasse s 4 5 lots , 44 o f whic h are vacant . A home o n on e o f th e Thomasvill e Propert y lot s wa s buil t

b y Hom e Front Homes . Afte

r th e purchas e o f

th e Thomasvill e Property , approximatel y $750,00 0 o f infrastructure wa s added . Th e Thomasvill e Property' s infrastructure i s full y developed : infrastructure an dutilitie s are cunentl y i n plac e an dare full

y functional . Firs t

Realt y & Appraisal Services , Inc. , prepare dappraisa l report s o f tw o lot s on th e Thomasvill e Property . A s o f Februar y 5 , 2009 , th e lo t

wit h th e hom e o n i

t wa s value da

t $123,500 . Als o a s o f February 5 , 2009 , avacan t lo t o n th e Thomasvill e Propert y wa s value da

t $ 14,000 .

3 3Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 7 o f 5 3

Th e Thomasvill e Propert

y ha s tw o know n encumbrances . Th e first encumbranc e i s a $600,00 0 loan , o

n whic h a$571,81 6 balanc e i s due . All interes t ha s bee n pai dfo

r th e yea r 2008 , andn o interes t

i s du e unti l December

2009 . Th e secon dencumbranc e i s aloa n fo r $141,36 6 fo

r th e constructio n o f

th e house . Bot

h o f thes e loan s mature i

n Decembe r

2009 . Th e Thomasvill e Propert

y cunentl y i s no t

generatin g any income . Th e Thomasvill e Propert

y i s ready fo

r sal e wit h 4 5 lot s havin g al l utilities , roads , an d othe r improvements . Partie s intereste di n purchasin g thi s propert y shoul dcontac t

th e Receiver . 2 . Grad y County , Georgia . Th e Receiver

i s i n possessio n o f

approximatel y 37. 5 acre s owne dby Scoo p Capital i n Grady County , Georgi a(th e "Grad y Property") . Accordin g t o Grady Count y publi c records , th e landvalu e o f th e Grady Property i

n 200 8 wa s $151,125 . Th e Receive r i s cunentl y determinin g th e bes t cours e o f actio n t o take regardin g thi s land . Partie s intereste d i n marketin g o r

purchasin g th e Grady Propert y shoul dcontac t

th e Receive r

directly . 3 . Graham , Nort h Carolina.' " Th e Receiver

ha s possessio n an dcontro l o f abuildin g locate da

t 84 1 Sout

h Mai n Street , Graham , Nort

h Carolin a2725 3 (th e "Rite-Ai dBuilding") . Thi s buildin g wa s purchase dfo

r $5,310,00 0 an di s cunentl y bein g lease dto aRite-Ai dPharmac y fo r

* " Th e propertie s describe di n thi s subsectio n an dth e followin g subsection s (4) , (5) , an d(6 ) appear t o hav e bee n purchase dthroug h Scoo p Real Estate Fund . However , i n light o f th e comminglin g o f

asset s amon g al l Receivershi p Entities , thes e propertie s appea r t o b e appropriatel y attribute da s general asset s o f th e Receivershi p estate .

3 4Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 8 o f 5 3

$33,073.0 8 per

mont h under a n absolute net

lease. " Th e Rite-Ai dBuildin g ha s on e know n encumbrance : a$2,655,00 0 interest-onl y loa n wit h Wachovi aBank , whic h mature di n Jun e 2009 , on whic h ther e i s aremainin g balanc e o f approximatel y $2,677,461.64 . Th e Receiver i s makin g n o payment s o n th e loan . Partie s intereste di n purchasin g th e Rite-Ai dBuildin g shoul dcontact : Ji mHamilto n C . Whitney Knoll Directo r Senio r Managin g Directo r Hollida y Fenogli o Fowler , L.P . Holliday Fenogli o Fowler , L.P . 341 4 Peachtre e Road , N E 341 4 Peachtre e Road , N E Suite 73 6 Suit e 73 6 Atlanta , G

A 3032 6 Atlanta , G A 3032 6 Telephone : (404 ) 942-221 2 Telephone : (404 ) 942-319 2 Mobile : (404 ) 219-738 3 Mobile : (404 ) 664-449 3 Fax : (404 ) 942-218 1 Fax : (404 ) 942-218 1 Email : ihamilton(S),hfflp.comEmail : wknoll(g)hfflp.co m 4 . Raleigh , Nort h Carolina . Th e Receive r

ha s possessio n an dcontro l o f abuildin g locate da

t 490 5 Water s Edge , Raleigh , Nort

h Carolin a2706 0 (th e "ED S Building") . Thi s buildin g wa s purchase dfo r $1,900,00 0 an di s cunentl y bein g lease dt o Electroni c Dat aSystem s ("EDS") , atechnolog y service s provider , fo

r $29,688.5 4 per

mont h under adoubl e net

lease.' ^ Th e ED S Buildin g ha s n o know n encumbrances . Partie s intereste di n purchasin g th e ED S Buildin g shoul d contact :

" Under a n "absolut e ne t

lease, " atenan t

i s require dt o pa

y al l operatin g expense s o f th e property , an dth e landlor dreceive s ane t rent .

' ^ Under a"doubl e ne t

lease, " th e tenan t

pay s al l taxes an dinsuranc e expense s tha t aris e fro m th e us e o f th e property . Th e tenan t

pay s rent , an dth e landlordpay s maintenanc e expenses .

3 5Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 3 9 o f 5 3

JimHamilto n Directo r Hollida y Fenogli o Fowler , L.P . 341 4 Peachtre e Road , N

E Suite 73 6 Atianta , G

A 3032 6 Office : (404)942-221 2 Mobile : (404)219-738 3 Fax : (404)942-218 1 Email : jhamilton(g),hfflp.co m C . Whitne y Knol l Senio r Managin g Directo r Hollida y Fenogli o Fowler , L.P . 341 4 Peachtre e Road , N E Suite 73 6 Atlanta , G

A 3032 6 Office : (404)942-319 2 Mobile : (404)664-449 3 Fax : (404)942-218 1 Email : wknoll(2)hfflp.co m 5 . Tupelo , Mississippi . Th e Receive r

ha s possessio n an dcontro l o f abuildin g locate da

t 243 3 Wes t

Main Street , Tupelo , Mississipp i 3880 1 (th e "Starbuck s Building") . Thi s buildin g wa s purchase d fo r $941,00 0 an di s currenti y bein g lease dt o Starbuck s (Store #8809 ) fo r $5,745.8 3 per mont h under a n absolut e net

lease . Th e Starbuck s Buildin g ha s n o know n encumbrances . Partie s intereste di

n purchasin g th e Starbuck s Buildin g shoul dcontac t John A . Skicewicz , CCI

M Coldwel l Banke r

Commercial NR T 198 8 Gulft o Ba

y Blvd . Clearwater , Florid a3376 5 Office : (727 ) 642-396 5 Fax : (727)466-411 9 Tol l Free : (800 ) 775-169 6 6 . Newnan , Georgia . Th e Receive r

ha s possessio n an dcontro l o f aga s statio n locate dat 5 McCollu m Station , Newnan , Georgi a3026 5 (th e "Ga s Station") . Thi s ga s statio n wa s purchase dfo r $2,450,00 0 an di s cunenti y bein g lease dt o aShel l Ga s franchise e fo r $10,80 0 per

month . Th e tenan t

defaulte don hi s lease , an da n evictio n proceedin g ha s bee n filedagains t him . Th e Ga s Statio n ha s n o know n encumbrances . Partie s intereste di n purchasin g th e Ga s Statio n shoul dcontact :

3 6Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 0 o f 5 3

John A . Skicewicz , CCI

M Coldwel l Banker

Commercial NRT 198 8 Gulft o Ba

y Blvd . Clearwater , Florid a3376 5 Office : (727 ) 642-396 5 Mobile : (727 ) 642-396 5 Fax : (727)466-411 9 Tol l Free : (800 ) 775-169 6 7 . Fairview , Nort h Carolina . On Marc h 30 , 2009 , th e Cour t grante dth e Receiver' s motio n (Doc . 98 ) fo r possessio n o f propert y locate di

n Fairview , Nort

h Carolin a(th e "Fairvie w Property") . (Doc . 100. ) On Jun e 14 , 2004 , Nade l an dhi s wif e purchase dth e Fairvie w Propert y fo r $335,000.00 . Th e Fairvie w Propert

y wa s asecondar

y residenc e o f

th e Nadel s that

i s locate di

n th e mountain s o f Nort h Carolin anea

r th e larg e property owne dby Laure l Preserve , LL C (se e Sectio n V.A.3 , above) . Th e Fairvie w Propert y ha s on e know n encumbrance : aloa n wit h BB& T Ban

k o n whic h there i s aremainin g balanc e o f approximatel y $248,560.6 2 Partie s intereste di

n purchasin g th e Fairvie w Property shoul dcontact : Th e Armou r Tea m Mik e an dNon aArmour Keller William s Professional s 8 6 Ashelan dAvenu e Asheville , N C 2880 1 Mik e Annour : (828 ) 771-234 2 Non aAmiour : (828 ) 771-233 6 http://armourteam.homesandland.com . listin g I D #1370454 0 8 . Sarasota , Florid a(Fruitvill e Road) . On Jul y 8 , 2009 , th e Cour t grante dth e Receiver' s motio n (Doc . 146 ) fo r possessio n o f property locate da

t 1557 6 Fruitvill e Roa

di n Sarasota , Florid a(th e "Fruitvill e Property") . (Doc . 148. ) T o purchas e th e property , Nade l pai da$5,00 0 deposi t o n Marc h 5 , 2003 , and

3 7Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 4 1 o f 5 3

$201,163.9 3 a

t closing . Th e Fruitvill e Propert y wa s purchase dentirel y wit h Ponzi-schem e proceeds . Th e Fruitvill e Propert y i s residential propert

y tha t wa s purchase db

y Nade l and Mrs . Nadel , wa s deede dt o thei r trusts , andwa s rente dto thirdparties . Th e Fruitvill e Propert y ha s on e know n encumbrance : aloa n wit h Norther n Trus t o n whic h there i s a remainin g balanc e o f

approximatel y $180,130.86 , Partie s intereste di n purchasin g th e Fruitvill e Propert

y shoul dcontact : John A . Skicewicz , CCI

M Coldwel l Banker

Commercial NRT 198 8 Gulft o Ba

y Blvd . Clearwater , Florid a3376 5 Office : (727 ) 642-396 5 Mobile : (727 ) 642-396 5 Fax : (727)466-411 9 Tol l Free : (800 ) 775-169 6 9 . Oberlin , Ohio . Th e Receive r

recentl y became aware o f acondominiu mi

n Oberlin , Ohi o (th e "Oberli n Property") . Th e Oberli n Propert y wa s purchase do n o r

abou t Septembe r

23 , 2003 , wit h th e fund s o f

Inte x Tradin g Corp . ("Intex")' ^ an dwa s originall y title di n Nadel' s name . On o r abou t Septembe r

2 , 2004 , titl e i

n th e Oberli n Propert

y wa s transfene dt o th e Clark/Nade l Revocabl e Trust . O n o r abou t Octobe r 9 , 2008 , Nade l a s Truste e o f th e Clark/Nade l Revocabl e Trus t transfene dtitl e i

n th e Oberli n Propert

y t o Nadel' s son , Chri s Nadel . O n o r

abou t Jul y 15 , 2009 , Chri s Nade l an dhi s wife . Am y L . Nadel , execute da

' ^ Nade l create dInte x an da t al l time s wa s it s sol e directo r an dofficer . Inte x wa s th e General Partne r

o f Scoo p Investments , Ltd. , whic h i s th e predecesso r o f Victor y Fund . O n Novembe r

27 , 2002 , Scoo p Investments , Ltd . wa s rename dVictor y Fund , Ltd . O

n Decembe r 20 , 2002 , Inte x wa s replace dby Receivershi p Entit y Scoo p Capital a s Victor y Fund' s general partner .

3 8Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 2 o f 5 3

quitclai mdeed , whic h transferre dall right , title , an dinteres t i n th e Oberli n Propert

y to th e Receiver . Ther e are n o know n encumbrance s on th e Oberli n Property . Partie s intereste d i n purchasin g th e Oberli n Propert y shoul dcontac t

th e Receiver

directly . C . Recover y o f

Vehicle s an dOthe r

Items . 1 . Vehicles . Th e Receive r

assume dcontro l o f

thre e vehicles : (1 ) 200 8 Mercedes-Ben z E6 3 ("Mercedes") ; (2 ) 200 9 Volkswage n EO S ("Volkswagen") ; and(3 ) Maserat i Gran dTurism o ("Maserati") . Thes e vehicle s were use dby Nei l andChristophe r Moody . Th e Mercede s an d Volkswage n wer e lease db y Valhall aManagement . Becaus e ther e wa s n o valu e t o thes e vehicle s an donl y th e continuin g obligatio n o f leas e payments , th e Receiver sunendere dthe m to th e leasin g compan y withou t penalt y an dwithou t

th e lesso r

retainin g any clai mto Receivershi p assets . Th e Maserat i wa s lease dby Vikin g Management . A s wit h th e Mercede s an dVolkswagen , becaus e ther e wa s n o valu e to thi s vehicl e an donl y th e continuin g obligatio n o f

leas e payments , th e Receive r sunendere dth e Maserat

i to th e leasin g compan y withou t

penalt y an dwithou t

th e lesso r

retainin g any clai mt o Receivershi p assets . Ther e i s als o a199 8 Jee p Wrangler value dat les s tha n $5,000 . Th e Receive r

entere d int o a n agreemen t

t o sel l th e Jee p t o adealershi p fo r $4,50 0 an di s i

n th e proces s o f

resolvin g issue s relate dt o th e titl e o f th e Jeep . On Jul y 7 , 2009 , th e Cour t authorize dth e Receive r

t o brin g into receivershi p a200 6 Subar u Legac y Outback . Th e Subar u wa s purchase dwit

h proceed s o f

Nadel' s scheme . Mrs . Nade l delivere dth e Subar u t o th e Receiver . Partie s intereste di n purchasin g thi s vehicl e shoul dcontac t

th e Receive r

directly .

3 9Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 3 o f 5 3

2 . Condominiu mNot e an dMortgage . O n Apri l 30 , 2009 , th e Cour t grante dth e Receive r

exclusiv e interes t

i n anote an d mortgag e fo

r acondominiu mlocate di n Sarasota , Florida . (Doc . 116. ) Th e condominium' s owner , a n employe e o f

th e florist

{see Sectio n V.A.6 , above) , ha dexecute dapromissor

y note payabl e to Mrs . Nade l fo

r $126,556.24 . Th e note wa s secure dby amortgag e hel db y Mrs . Nadel . O n Februar y 9 , 2009 , Mrs . Nade l assigne dth e not e an dmortgag e t o Nadel' s forme r criminal-defens e attomeys , Cohen , Jayso n & Foster , P.A. , wh o subsequentl y assigne dth e note an dmortgag e to th e Receiver , pe r th e Court' s order . Th e principal balanc e du e under th e note i s $124,637.64 , wit h $5,457.6 6 du e i

n outstandin g interest . Th e condominium' s owner i s i n defaul t an dth e Receive r

i s preparin g to initiat e foreclosure proceedings . 3 . Bonds.co mAssets . Th e Receiver' s investigatio n reveale dtha t Ponz i schem e proceed s were use dt o fun d anumber o f asset s relate dt o Bonds.com , Inc . ("Bonds.com") . Th e Receiver

ha s tw o promissor

y note s tha

t were execute dby Valhall aInvestmen t Partners , L.P. , an dBonds.com . On e o f th e note s i s fo

r $400,000.0 0 wit

h 9 % interes t

secure d by th e domai n nam e www.bonds.com . Bonds.co mha s pai dal l o f th e interes t

du e on tha

t note , an dth e partie s amende dan drevise di t i n amanne r

tha t i s i n th e bes t interes t o f th e Receivership . That

note i s du e o n Octobe r

31 , 2009 , per

asix-mont

h extensio n grante db

y th e Receiver . Th e othe r

not e i s fo

r $203,800.00 ; i s du e t o mature on Septembe r 22 , 2010 ; an di s stil l owin g an doutstanding . Th e $203,80 0 not e i s aconvertibl e note tha t ca n b e converte dinto a

n equity interes t

i n th e compan y a

t th e Receiver' s option .

40Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 4 o f 5 3

Christophe r

D . Mood y ha dasset s relate dt o Bonds.co mGroup , Inc . ("Bonds.com") , a s follows : 1 ) Thre e million , on e hundre dsixtee n thousand , on e hundre dseventy-on e

(3,116,171 ) full

y pai dandnon-assessabl e commo n share s o f stoc k i n Bonds.com ; an

d 2 ) A secure dconvertibl e promissor y not e mad e by Bonds.co mo n September

22 , 2008 , i n th e amount

o f $1,236,836 , an dasecure dconvertibl e promissor y note mad e by Bonds.co mon December 12 , 2008 , i

n th e amoun t

o f $50,00 0 On Augus t

5 , 2009 , on th e Receiver' s motion , th e Cour t entere da

n orde r transfenin g all right , title , andinteres t

i n Christophe r

D . Moody' s stoc k

andnote s t o th e Receiver . On o r befor e Augus t 14 , 2009 , th e Receive r

wil l b e filing aSchedul e 13 D (commonl y know n a s th e "Beneficial Ownershi p Report" ) wit h th e U.S . Securitie s an dExchang e Commissio n t o repor t beneficia l ownershi p o f

stoc k receive dfro

mTh e Christophe r

D . Moody Revocabl e Trust . I n addition , als o on or

befor e Augus t 14 , 2009 , th e Receiver

wil l b e filing aFor

m3 (Initial Statemen t

o f Beneficial Ownershi p o f Securities ) fo

r th e stock , a s require dunder th e Securitie s Exchang e Ac t

o f 1934 . Nei l V . Moody als o ha s stoc k i n an dnote s fro

mBonds.co mo f

asimila r nature to Christophe r

Moody' s relevan t

assets : 1 ) Six hundre dsixty-si x thousand , six-hundre dsixty-seve n (666,667 ) share s o f stoc k in Bonds.com ; an d 2 ) A secure dconvertibl e promissory not e mad e b y Bonds.co mi

n th e amoun t

o f $250,00 0 that

i s du e i n Septembe r

2010 .

4 1Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 5 o f 5 3

Th e Receive r

i s stil l investigatin g th e nature o f Nei l V . Moody' s interes t i n Bonds.com , an

d th e Receiver

wil l mov e th e Cour

t fo r a n orde r transfenin g all right , title , an dinteres t i n Nei l V . Moody' s stoc k

andnote s t o th e Receiver , if appropriate . Wanants , whic h giv e th e holde r right s to acquir e more share s on afull y dilute dbasis , als o were issue di

n conjunctio n wit

h th e Moodys ' note s wit

h Bonds.com . Th e Receiver i s stil l investigatin g thes e grant s o f wanants . 4 . Ques t

EM G Promissor y Note . A s mentione dabov e i

n Sectio n V.A.7 , th e Receiver als o ha s apromissor

y note fro m Ques t EMG an dtw o individual s t o Valhall aInvestmen t Partner s i

n th e amoun t

o f $1,100,000 . Interes t

i s bein g pai don thi s note . 5 . Miscellaneou s Items . Th e Receiver

ha s als o recovere damyriado f othe r item s that

he ma y b e abl e to sell , includin g avariety o f

fumiture , fixtures, computers , andmiscellaneou s supplies . Th e Receiver wil l make reasonabl e effort s t o maximiz e th e amoun t h e i s abl e t o recove r

fro mth e possibl e sal e o f

al l o f thes e items . D . Recover y o f

Profit s fro mInvestors . A s discusse din Sectio n lll.C , above , th e Receive r ha s determine dtha

t some purporte dinvesto r

account s receive dmonie s i n a n amoun t that exceede dthei r

investments . T o date , th e Receive r

ha s discovere dapproximatel y $3 9 millio n i n suc h ficthious profits . Th e Receiver

ha s spen t

substantia l tim e identifyin g recipient s o f thes e fictitious profit s and intend s t o procee dwit

h recoverin g thes e fictitiou s profit s t o redistribut e the mmore equitabl y amon g investor s holdin g legitimat e an dallowe dclaims .

4 2Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 6 o f 5 3

Th e Receiver

ha s begu n effort s to recover thes e funds . I

n Apri l 2009 , th e Receiver sent letter s to 8 5 investors , eac h o f whom , accordin g t o th e record s i n th e Receiver' s possession , made "fictitiou s profits " b y receivin g monie s fro

mHedg e Fund s i

n a n amount that exceede dhi s or

her investment s (th e "Profiteers") . Thes e 8 5 investors ' total amount o f fictitious profit s i s $16,206,672.38 . Wit h th e SEC' s approval , th e Receive r offere dto setti e wit h eac h Profitee

r fo r paymen t b y th e investo r

o f 90 % o f hi s o r her fictitiou s profits . Collectively , i

f accepte dan dapproved , thes e settlement s woul dyiel d$14,586,005.14 . A s o f Augus t 12 , 2009 , th e Cour

t ha s approve dte n (10 ) Profiteer settlement s totalin g $1,337,158.58 . Wit

h respec t t o thes e initia

l 8 5 letters , thos e wh o d o no t settl e wit

h th e Receiver shoul danticipat e that

litigatio n wil l b e commence di n th e immediat e future . Shoul d thos e investor s wis h to resolv e thes e claims , the y shoul dd o s o promptiy . Onc e litigatio n i s commenced , th e opportunity t o settl e a t a90 % discoun t

wil l n o longer

b e available . I n anticipatio n o f

initiatin g lawsuits , th e Receive r filed aMotio n to Reappoin t Receiver (Doc . 139) . Tha

t motio n wa s grante don Jun e 3 , 2009 . Excep t i n situation s where individual s had , o r

shoul dhav e had , knowledg e o f th e fraudulen t

investmen t

scheme , o r otherwis e di dno t

ac t i n goo dfaith , th e Receiver wil l seek t o recove r

fictitiou s profit s but

no t th e amoun t

equivalen t

to th e principal investment . Th e Receiver

continue s t o wor

k t o identif

y additiona l profiteer s t o recover th e remainin g $18,793,327.6 2 an dintend s to sen dsettlemen t offer s t o additiona l profiteer s i n th e nea r future .

4 3Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 7 o f 5 3

E . Recover y o f

Asset s fro mChristophe r D . Mood y an dNei l V . Moody . Fromth e Receiver' s investigatio n t o date , i t appear s tha

t asignificant

portio n o f activitie s o f

certai n Hedg e Fund s wer e manage dan

ddirecte dby Christophe r D . Mood y an d Nei l V . Mood

y (th e "Moodys") . Together , th e Moody s receive dapproximatel y $4 2 millio n i n fee s fro mcertai n Receivershi p Entities . I n Apri l 2009 , th e Receive r initiate dcontac t

wit h th e Moodys ' counsel . O n Apri l 17 , 2009 , th e Receiver

receive daletter

fro mth e Moody s agreein g tha t the y woul dno t

transfer an y asset s o f

valu e owne db

y them , no r

woul dthe y remov e an

y suc h asse t

fro mth e state o f Florid awithou t

prio r writte n notic e to th e Receiver . To date , th e Moody s hav e cooperate d wit h th e Receiver

t o achiev e a

n orderl y turnove r

o f asset s tha

t wer e fundedwit

h Ponzi

scheme proceeds . Th e followin g asset s hav e bee n identifie db y th e Receive r

a s havin g been fundedwit

h suc h proceeds . 1 . Vikin g Oil' s Interes t in Ques t EMG . Throug h thei r

contro l o f

Vikin g Oil , th e Moody s hada n investmen t

wit h Ques t EMG , a n oi l andga s venture . O n Jul y 15 , 2009 , th e Receive r gaine dcontro l o f

Vikin g Oi l andit s interes t i n Ques t EMG . Pleas e se e discussio n a t Sectio n V.A.7 , above , fo

r more details . 2 . Moodys ' Interes t i n Bonds.com . Th e Moody s eac h ha

dstoc k i n andpromissor

y note s fro

mBonds.com . Pleas e se e discussio n abov e a

t Sectio n V.C.3 , above , fo

r more details . 3 . Queen' s Wreat h Jewels , Inc . Th e Receiver' s investigation , aide dwit h th e cooperatio n o f

th e Moodys , reveale dtha t th e Moody s investe d$400,00 0 i n Queen' s Wreat

h Jewels , Inc . ("Queen' s Wreath") , wit h

4 4Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 8 o f 5 3

eac h o f th e Moody s receivin g a20 % interes t i n th e company . Th e Moody s als o made several loan s t o Queen' s Wreath . Th e fund s use dt o acquir e th e Moodys ' ownershi p interes t i n Queen' s Wreat

h an dt o make th e loan s were primaril y transfer s fro mReceivershi p Entities . On o r abou t Apri l 7 , 2009 , Queen' s Wreat h transfene downershi p o f th e remainin g jewelry to th e Moody s i

n exchang e fo

r thei r interes t i n th e compan y an di

n satisfactio n o f

al l outstandin g loans , wit

h th e understandin g tha

t Queen' s Wreat

h woul dretai n th e jewelry on consignment . Th e jewelry cunentl y i s bein g jointl y hel dby anothe r receive r an db y Queen' s Wreat h pursuan t

t o th e court' s orde r

i n th e proceedin g style dPaolin o v . Nei l V . Mood y an d Christophe r

D . Moody , Cas e No . 2009-ca-O O 187 6 (Cir . Ct . 12t h Jud . Cir. , Sarasot aCounty , Fla.) . Th e Receiver

i s preparin g t o file amotio n i n th e Commissio n Proceedin g to recover th e jewelry ; i

t wil l b e filedwithi n th e nex t five busines s day s followin g thi s Report .

* * * Th e Moody s hav e anumbe r o f asset s that

woul dad dsignifican t

valu e to th e Receivershi p estate , includin g interes t i n othe r companies , houses , vehicles , an dboats . Thes e asset s ar e bein g identifie dan dstep s are bein g undertake n t o marshal thes e assets . F . Recover y o f

Fee s fro mRecipient s o f Commissions . Informatio n availabl e t o th e Receiver reveal s tha

t a t leas t fou r individual s who , individuall y o r

throug h on e o r

mor e entities , receive dcommission s a s "compensation " wit h respec t to solicitatio n o f

investor s i

n th e Receivershi p Entities . I n Jun e an dJul y 2009 , th e Receive r sent deman dletter s seekin g t o recove r atotal o f $7,616,331.7 2 i

n bot h commission s an dfals e profit s fro

mthes e particular

individual s an dentities . Th e letter s offere dt o settl e fo r

4 5Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 4 9 o f 5 3

th e amount

o f commission s receive dwithou t interest . T o date , n o settlement s hav e bee n entere dinto wit

h thes e individual s andentities . Th e Receiver i s preparin g to initiate lawsuit s t o recover thi s money fo

r th e benefi t

o f th e Receivershi p estate . G . Othe r

Litigation . Th e Receiver

ha s ha dcontac t wit h th e la w firmo f Johnson , Pope , Bokor , Ruppe l & Bums , LL

P ("Johnso n Pope" ) regardin g th e Institutio n o f aclas s actio n agains t

Hollan d& Knight , LLP ("H&K") , th e la w firmtha

t prepare dth e privat e placemen t memorand ause dt o solici t investor s int

o th e Nade l scheme . On March 20 , 2009 , Johnso n Pop e on behal f o f investo r Michae l Sulliva

n an dother s similarl y situated , institute daclas s actio n sui t agains t H&K , Michae l Sulliva

n v . Hollan d& Knight

LLP , Cas e No . 09-cv-0531-EA J (M.D . Fla.) . Th e Receiver

ha s ha dcommunication s wit

h Johnso n Pop e wit

h respec t to institutin g thi s clas s action . Shoul dJohnso n Pop e b e successfu l i n thi s litigation , th e Receive r expect s tha

t investor s wh o suffere dlosse s a s aresul t o f th e fraudulent

schem e wil l b e abl e t o pursu e a vali dclaim . Th e Receiver

als o desire s to initiate a n actio n agains t

H& K on behal f

o f th e Hedg e Funds . Th e Receive r

ha s entere dinto acontingenc y fe e agreemen t

whereb y Johnso n Pop e wil l pursu e professional malpractic e claim s b y th e Hedg e Fund s agains t H&K , seekin g damage s o f

more tha n $5 0 million . O n Augus t 12 , 2009 , th e Cour

t approve dth e Receiver' s contingenc y fe

e agreemen t

wit h Johnso n Pope . (Doc . 175. ) I t i s anticipate dthat

acomplain t agains t H& K wil l b e filedwithi n awee k followin g th e dat e o f

thi s Report . Th e Receive r

continue s t o examin e th e action s o f othe r professional s an dbusinesse s that provide dservice s t o Receivershi p Entitie s t o determin e whethe r h e need s t o take

4 6Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 5 0 o f 5 3

additional step s wit

h respec t to an y o f thos e professional s an

dbusinesse s t o recove r

asset s fo r th e receivership . VI . Investigatin g Receivershi p Affair s an dTracin g Receivershi p Funds . Th e Receiver

ha s retaine dth e service s o f PD RCertifie dPubli c Accountant s ("PDR") , forensi c accountants , t o assis t i n investigatin g an danalyzin g th e flow o f fund s bot h into andou t

o f th e Receivershi p Entities , an dto assis t i n locatin g additiona l funds , i f any . Th e Receiver

ha s als o retaine dth e service s o f Riversid e Financia

l Grou p ("Riverside") , financia l analyst s to assis t

i n investigatin g an danalyzin g all o f th e tradin g activity . I

n conjunctio n wit

h th e Receiver , PD Ran dRiversid e ar e furthe r attemptin g t o identif

y additional individual s and/o r entitie s wh o ma

y b e i n possessio n o f

Receivershi p funds . PD

R wil l als o assis t

i n determinin g th e amoun t o f eac h investor' s loss . VII . Th e Nex t

Sixty Davs . Th e Receive r

ha s receive duseful informatio n fro minvestor s an dthirdpartie s durin g th e cours e o f

th e receivership . A numbe r o f peopl e hav e contacte dhi mwit h respec t to th e locatio n o f

assets . Th e Receive r

woul dlik

e t o thank

thos e partie s for

thei r efforts . Fo

r anyon e wh o ma

y hav e informatio n tha

t the y believ e woul db e o f us e t o th e Receivership , th e Receive r encourage s thos e partie s to brin g that informatio n to th e Receiver . Th e Receive r

ha s receive donl y aportio n o f th e document s h e ha s subpoenae dfro m thirdparties . I

t wil l b e necessary t o obtai n an drevie w al l suc h document s i n orde r to complet e a

n understandin g o f

th e flow o f

fund s throug h th e Receivershi p Entities , t o identif y an y additional source s o f recovery , an dt o prepar e a n accounting . Th e Receive r i s workin g

47Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/200 9 Pag e 5 1 o f 5 3

diligentl y o

n thi s task , but

withou t knowin g th e volume o f

document s h e expect s t o receive , i t i s difficul t

to estimate th e tim e neede dfo r completion . Durin g thi s process , th e Receive r i s als o compilin g an danalyzin g individual investo r accounts . Thi s i s anecessar y tas k t o asses s andadministe r investo r claims . Th e Receiver wil l likel y as k

al l investor s t o sen dhimcopie s o f al l documentatio n relate dt o thei r investment s i

n th e Hedg e Funds . He wil l revie w andanalyz e al l document s relatin g t o eac h investmen t

t o determin e th e amount s owed , i f any , t o eac h investor . Th e Receive r doe s no t expec t to commenc e th e claim s proces s unti l lat e 200 9 or earl y 2010 . Th e Receiver wil l provid e amor

e definitiv e tim e estimat e a s hi s analysi s progresses . Th e Receiver

i s als o reviewin g informatio n to determin e i f an y thirdpartie s ma

y hav e liability eithe r

to th e Receivershi p estat e or investors . I

n thi s regardi

t shoul db e anticipate d that th e Receiver

wil l brin g action s i

n th e future . Th e Receive r

wil l continu e t o attemp t

t o locate additional fund s an dothe r asset s and , i f appropriate , wil l institut e proceeding s t o recove r asset s o n behal f

o f th e Receivershi p Entities . I

n a n effor t t o more full

y understan dth e conduc t

a t issu e an di

n a n attemp t to locate more assets , th e Receive r wil l continu e t o conduc t interview s and/o r

deposition s o f

partie s an dthir dpartie s wit

h knowledge . Th e Receive r

wil l als o continu e th e operation s o f al l ongoin g businesse s o f th e Receivershi p Entitie s t o maintai n and , if possible , enhanc e thei r

value . Th e Receive r

wil l continu e t o marke t

propertie s fo

r sal e an dentertai n offer s fo r purchase .

4 8Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 5 2 o f 5 3

CONCLUSIO N Creditor s andinvestor s i n th e Receivershi p Entitie s ar e encourage dt o periodicall y chec k th e informational website (http://www.nadelreceivership.com/ ) fo r cunen t infonnatio n concemin g thi s Receivership . Th e Receive r an dhi s counse l hav e receive da n enormou s amount o f email s andtelephon e inquirie s an dhav e ha dto expen dsignifican t

resource s t

o addres s them . T o minimiz e thos e expenses , creditor s an dinvestor s are strongl y encourage d t o consul t th e Receiver' s website before contactin g th e Receiver o r hi s counsel . However , th e Receiver

continue s to encourag e individual s o r attomey s representin g investor s wh o ma y hav e informatio n that

ma y b e helpfu l in securin g furthe r asset s fo r th e Receivershi p estat e or identifyin g othe r

potential partie s wh o ma y hav e liability to eithe r

th e Receivershi p estat e or investor s directl y to eithe r emai l ksalo@fowlerwhite.com , or cal l Kathy Sal o a

t 813-228

- 7411 . Date dthi s 17t

h da y o f Augus t 2009 . Respectfull y submitted , s / Burto n W . Wiand Burto n W . Wiand , Receive r

4 9Cas e 8:09-cv-00087-RAL-TB M Documen t 17 6 File d 08/17/2009 Pag e 5 3 o f 5 3

CERTIFICAT E O F SERVIC E 1 hereb y certif

y tha t o n Augus t 17 , 2009 , 1 electronicall y filedth e foregoin g wit h th e Cler k o f th e Cour t by usin g th e CM/EC F system . 1 furthe r certif y tha t 1 maile dth e foregoin g documen t an dth e notic e o f

electroni c filing by first-class mai l t o th e followin g non-CM/EC F participant : Arthu r G . Nadel , Register No . 50690-01 8 MC C Ne w Yor

k Metropolita

n Conectiona l Cente r 15 0 Par k Ro w Ne w York , N

Y 10007

s

/ Car l R . Nelso n Car i R . Nelson , FB N 028018 6 cnelson(5)fowlerwhite.co m Gianluc aMorello , FB N 03499 7 gianluca.morello@fowlerwhite.co m May aM . Lockwood , FB N 017548 1 mlockwood@fowlerwhite.co m Ashle y Bruc e Trehan , FB N 004341 1 ashlev.trehan(a)fowlerwhite.co m FOWLERWHIT

E BOGG S P.A . P.O . Bo x 143 8 Tampa , F L 3360 1 T:(813 ) 228-741 1 F:(813 ) 229-831 3 Attomey s fo

r th e Receiver , Burto n W . WiandCas e 8:09-cv-00087-FiAL-TB M Documen t 176- 2 File d 08/17/200 9 Pag e 1 o f 2 Standardize dFun dAccountin g Report fo r Consolidate dNade l Entitie s - Cas h Basi s Receivership ; Civi l Cour t Docice t No . 8:09-cv-87-T-26TB M Reportin g Perio d05/01/0 9 to 06/30/0 9 |Fun d Accountin g (Se e Instructions) : 'Lin e 1 Lin e 2 Lin e 3 Lin e 4 Line s Line s Lin e 7 Line s Lin e 9 iLin e 1 0 Lin e 10 a Lin e 10 b Lin e 10 c Lin e 10 d Lin e 10 e

Lin e 10 f Lin e 10 g Lin e 1 1 Lin e 11 a Beginnin g Balanc e (As o f 05/01/09) :

[Increase s i n Fun d Balance : Busines s Incom e Cas h an d Securitie s Interest/Dividen d Inconfi e Busines s Asse t Liquidatio n Persona l Asse t Liquidatio n Third-Part y Litigatio n Incom e Miscellaneou s - Othe r Tota l Fund s Avallablf e (Lin e 1 - 8) : Decrease s i n Fun d Balance : Disbursement s t o Investors Disbursement s fo rReceivershi p i n Operation s Disbursement s t o Receive ro rOthe rProfessional s Busines s Asse t Expense s Persona l Asse t Expense s Investmen t Expense s P 1 . Attorne y Fee s 2 . Litigatio n Expense s Tota l Third-Part y Litigatio n Expense s Ta x Administrato rFee s an d Bond s Federa l an d Stat e Ta

x Payment s Tota l Disbursement s fo rReceivershi p Operation s Disbursement s fo rDistributio n Expense s Pai d b y th e Fund : Distributio n Pla n Developmen t Expenses : 1 . Fees : Fun d Administrato r Independen t Distributio n Consultan t (IDC ) Distributio n Agen t Consultant s Lega l Advisor s Ta x Advisor s 2 . Administrativ e Expense s 3 . Miscellaneou s Tota l Pla n Developmen t Expense s Detai l Subtota l Gran d Tota l { 424,280.0 8 23,900.5 4 54,082.5 0 200,000.0 0

- 589.313.1 7

- 1,557,431.1 6

1,291,576.2 9 2,849,007.45 1 2.388.5 7 337.328.7 6 356.491.4 5

-

1,587.3 2 $697,796.1 0 $697,796,10 1

'; ;

• ! '^ '

'Lin e 1 Doesn' t includ e $1.5 m Scoo p Capita l CD/wil l b e payin g $1.5 m loa nCas e 8:09-cv-00087-F^L-TB M Documen t 176- 2 File d 08/17/200 9 Pag e 2 o f 2 standardize dFun dAccountin g Repor t fo r Consolidate dNade l Entitie s - Cas h Basi s Receivership ; Civi l Cour t Docke t No . 8:09-cv-87-T-26TB M Reportin g Perio d05/01/0 9 t o 06/30/0 9

Fun d Accountin g (Se e Instructions) : { Lin e 11 b

Lin e 1 2 Lin e 12 a Lin e 12 b Lin e 1 3 Lin e 1 4 Lin e 14 a Lin e 14 b Lin e 14 c Distributio n Pla n Implementatio n Expenses :

1 . Fees : Fun d Administrato r ID C Distributio n Agen t Consultant s Lega l Advisor s Ta x Advisor s 2 . Administrativ e Expense s 3 . Investo rIdentification : Notice/Publishin g Approve d Pla n Claiman t Identificatio n Claim s Processin g We b Sit e Maintenance/Cal l Cente r 4 . Fun d Administrato rBon d 5 . Miscellaneou s 6 . Federa l Accoun t fo rInvesto rRestitutio n (FAIR ) Reportin g Expense s Tota l Pla n Implementatio n Expense s Tota l Disbursement s fo rDistributio n Expense s Pai d b y th e Fun d Disbursement s t o Court/Othe r Investmen t Expenses/Cour t Registr y Investmen t Syste m (CRIS ) Fee s Federa l Ta

x Payment s Tota l Disbursement s t o Court/Other : fbta l Fiincjsiilsburee d (Llrie s 9-ll j Endin g Balanc e (A s o f 06/30/09 ) Endin g Balanc e o f Fun d - Ne t Assets : Cas h & Cas h Equivalent s Investment s Othe rAsset s o rUncleare d Fund s Tota l Endin g Balanc e o f Fun d - Ne t Asset s Detai l Subtota l Gran d Tota l

j '

• • • : • ••:•.-..'...' / vA . • .,••.; • 7 v2.151,211.3 5 2,151.211.3 5 2.151.211.3 5 2,151,211.3 5Cit y Exhibi t 1 7

L A W OFFICE S "P^« * BOONE , BOONE , BOONE , KOD A& FROOK . P.A . • ^ , V f ^ p . O . BO X IS9 6 '/VEB^ ^ VENICE . FLORID A 3.*sa. 4 STREE T A.DDFIESS : E.G . <DAN > BOON E JEFFER Y A . BOON S ESTABLISHE D I06 6 ,QQ | AVENID A DE L CIRC O 3428 5 STEPHE N K . BOON E JOH N S . KOD A TELEPHON E (9-41 ) 480-671 6 MARGARE T (PEGGY ) S . FROO KFA X 04I ) 4a8-707 » e-mail : adcn@boone-law.coi n Jun e 13 , 200 8 JAMC S T . COLLINS , LAN D PLANNE R tNO T A MCMBC R O F TH E TLORIO A BAR l VI A HAN D DELIVER

Y Ms . Lor i Stelzer , Cler

k Cit y o f Venice , Florid a Re : Reques t

to b e place don th e Cit

y Council Agend afor

Jun e 26,200 8 Dea r Ms . Stel2«r : Ou r firmrepresent s Venic e Airport Leaseholder

Venic e Je t

Center , LLC . A plac e o n th e June 26,2008 , Agend ai s requeste da s aresul t o f ameetin g wit

h variou s Cit

y o f Venic e official s o

n Ma y 30 , 2008 , wh o tol dVenic e Jet Cente r representative s tha

t the y ar e unde r instruction s fromCit

y Counci l tha t

prohibi t consideratio n o f

ne w hanga

r constructio n unles s permissio n i s receivedfromCit y Counci l t o allo w abuildin g permi t applicatio n to b e filed. Th e purpos e fo

r appearin g o n th e Agend ai s t o reques t permissio n fromCit

y Counci l t

o proces s a buildin g permi t

applicatio n fo

r an eigh t thousan dsqtiar

e foot hangar , alon g wit

h necessar y pavin g andretention . See Exhibi t "A " attache di n 1 0 copies . Th e permi t ha s bee n obtaine dfrom th e Southwes t

Florid aWate

r Managemen t

Distric t fo r thi s project . Th e Venic e Jet

Cente r leas e i s date dMa

y 23,2006 , an

dha s 2 8 year s t o run . There i s vacan t land withi n th e leas e fo

r improvement s t o b e constructed , an dth e leas e specificall y call s fo r additiona l improvement s b y lessee . Venic e Je t Center woul dno t

hav e entere dint o th e 30-yea r leas e unles s thi s provisio n wa s apar

t o f th e lease . Th e "MinimumStandard s for th e Venic e Municipa

l Airport , Venice , Florida, " provide s fo r th e constructio n o f

new hangar s b y th e FBO . Th e "Minimu mStandard s for Fixe dBas e Operators , Venic e Mtmicipal Airport , Venice , Florida, " provide s fo

r an doutline s th e condition s for hangar s to b e buil t

o n th e airpor

t by th e fixedbas e operator .Ms . Lor

i Stelzer , Cler

k Pag e 2 June 13,200 8

Providin g hanga

r spac e i s on e o f

th e essentia

l operation s o f

th e fixedbas e operator , an dthere i s a waiting lis t

fo r hanga r space . Th e Cit

y o f Venic e operate s 14

4 T-hangar s wit

h 1 2 more about

to b e constructed . Unde

r Cit y an dFAA mandates , competitio n i s require dan ddiscriminatio n i s no t allowed . Fiftee n minute s i s requeste dfor

representative s fromVenic e Je t Center , LLC , DM K

Engineer s an dSurveyor s an

dArchitec t

Mar k Beeb e to present

th e reques t

t o allo w th e projec t

t o proceed . Ver y trul y yours . E . G . Boon e ^ a b ccs : Cit y Attome y Bob Anderso n Mayo r EdMarti n Cit y Manage r Marti n Blac k Mr . Roge r Jemiga n Mr . Ar t Nade l (all withou t

enclosure ) f:\N35\123S9\llr

City 06130 8

BOONE , BOONE . BOONE . KOD A G r FROOK . P.A. , ATTORNEY S A T LAW , VENICE . FLORID ACit y Exhibi t 1 8 

## CIT Y O F VENIC E 40 1 W . Venic e Avenu e Venice , F L 3428 5 (941 ) 486-262 6 Fa

x (941 ) 480-303 1 Suncom: 516-438 2 OFFIC E O F TH E CIT

Y MANAGE R "Cit y o n th e Gull " Jun e 23,200 8

Mr . E.G . Boone , Esq . 100 1 AvenidaDe l Circ o Venice . F L 3428 5 

## 'mb

RE : Venic e Je t

Center Propose dAdditiona

l Hangar s Dea r Mr . Boone : Than k yo u fo r you r letter s o f Jun e 1 3 an

d16 , 200 8 requestin g th e opportunit y t o appea

r befor e Mayo r andCit y Counci l regardin g propose dhangar s o n propert y under leas e t o the Venic e Je t

Center an dseekin g thei r

approva l to 'fil e for

buildin g permits'. Under th e term s o f th e existin g lease , thre e component s wer e identifie da s th e minimum improvement s necessar

y unde r th e term s o

f th e lease . Fre dWalts , Airpor t Directo r ha s confirmedtha

t th e demolitio n o

f tw o existin g hangars , constructio n o f a t leas t 10,00 0 squar e fee t o f new hanga

r spac e an dth e re-facin g of

existin g stmcture s wit

h aNorthe m Mediterranea

n architectural desig n hav e been completed . Th e concep t fo r thes e improvement s wa s reviewe dby Mayor an dCit y Counci l durin g their

review an dultimat e approva l o f th e lease . I n additio n t

o provision s o

f th e leas e tha

t require tha

t improvement s b e approve db y th e city , th e subjec t

property lie s withi n th e GU-Govemmen t Us e zonin g district . Th e provision s o

f thi s distric t

require tha

t th e Mayo r andCit y Counci l approv e aconcep t plan prior t o development

proceeding . Wit

h thi s i n min dan da s reviewe dwit h cit y staf f a t th e Ma y 30 , 200 8 meeting , pleas e submi t aconcep t

pla n tha

t reflect s th e exten t

of improvement s desire db y th e Venic e Je t Cente r a t asufficien

t detai l to allo w fo

r a technica l revie w tha t

include s generahze dbuildin g locations , stormwate r treatmen t facihtie s locations , exterio r buildin g desig n (consistent with th e Norther

n Mediterranean desig n specifie din th e lease) , buffering an dmitigatio n technique s (includin g concep t landscap e design) , parkin g areas , acces s an dcirculatio n features , propose dsignag e an d exterior lightin g features . Identificatio n o f th e basi s for

determinin g th e market

need s for th e propose dprojec t

andit s consistenc y wit

h airpor t minimu mstandard s wil l b e me t shoul dals o b e provided . Upo n receip t o f thes e materials , cit

y staf f wil l b e abl e t o complet e atechnical revie w to ensur e tha t Mayor andCit y Counci l d o no t

consider a concep t pla n wit h fatal technica

l flaws . A

t th e Ma y 3 0 meeting , staf

f identifie dfire cod eMr . E.G . Boon e Page-2

- Jun e 23 , 200 8 complianc e parameter s an dspecifi c concern s fo r bufferin g t o th e nort

h tha t shoul db e addresse din you

r submittal . Pleas e note tha

t you r lette r indicate s tha

t staf f i s unde r directio n fromCit

y Counci l tha

t prohibit s consideratio n o

f th e buildin g permi t

apphcatio n file dfo

r th e subjec t

property . A s indicate dabove , unti l such tim e a s aconcep t

pla n (a s require dby th e cit

y zonin g code ) fo r the propose dimprovement s i s approve dby Mayo r an dCit y Council , you

r chen t i s preclude dfro

mproceedin g t

o buildin g permitting . I f acomplet

e submitta

l i s receive dby cit y staf

f (pleas e direc t

your submitta l t o Fred Watts , Airpor

t Directo r for processing ) o n o r

befor e clos e of busines s o

n Jul y 7 , 2008 , staf f woul danticipat

e scheduhn g th e reques t

fo r Mayo r an dCit y Counci l consideratio n a

t thei r Jul y 22 , 200 8 meeting . Th e concep t plan sheet s submitte dwit h your origina l letter s ca n serv e a s abas e fo

r addin g th e additional informatio n requeste dt o aid e in Mayor an d Cit y Counci l consideration . Sincerely , Martin P . Black . AICP . ICMA-C M Cit y Manage r MB/re k Cc : Charte

r Officers FredWatt s Mr . Ar t Nadel , Venic e Je t

Cente r