investor claiming a nearly six million dollar loss in hedge funds of the accused
Sarasota Florida Ponzi artist who is also the current owner
of flight school Huffman Aviation
figured in the story of the St. Petersburg DC9 busted in Mexico's Yucatan
with 5.5 tons of cocaine aboard.
Paolino, once known as
of New Jersey,” was one
of only a handful of entities ever funded by Texas "investment bank"
Argyll Equity LLC, the major investor in the company whose DC9 was busted
April 11, 2006 in Mexico’s Yucatan, carrying 5.5 tons of cocaine.
Terrorist ringleader Mohamed Atta probably never met anyone named “Fat
Pete” or “Joey Cakes” while learning to fly at Huffman
Aviation at the Venice Airport.
But ever-mounting evidence points to
the conclusion that the men who owned the flight school—both
then and now—have more than a passing acquaintance with organized
Troubling questions about yet another "lone gunman"
decade-long fraud was discovered at almost the same time as Bernie Madoff’s
orders-of-magnitude-larger Ponzi scheme. A half-dozen others have since followed.
There appears to be a sudden epidemic of multi-million (and billion) dollar
Ponzi fraud. Did someone yell "Olly olly oxen free!" in a voice
that can only be heard by 'elite deviant' members of America's new
"Masters of the Universe' class?
While Federal investigators pore
over the self-proclaimed "Mini-Madoff's books, there are troubling questions
emerging over Federal prosecutors "lone gunman" theory about
how the dorky Sarasota socialite managed to steal $350 million from investors.
Art Nadel, an
unprepossessing piano player in hotel lounges, was somehow able to maneuver
himself into a position where he could reach into other people’s
pockets—deeply and at will—and relieve them of what was, in too
many cases, their life's savings.
Did Art Nadel do it all on his own?
Indications so far point in another direction.
was the label often applied to Nadel by the local
“Mobbed-up Sarasota businessman"
might be a more accurate description.
Hopes for ash dashed.
Paolino's involvement in Art Nadel's hedge funds in a
Sarasota Herald-Tribune story announcing that Paolino
has filed suit against two of Nadel fund managers.
Paolino, said the Herald-Tribune,
(allegedly) lost his entire investment of (allegedly) $5.6 million.
Only the Herald-Tribune didn't put
allegedly in front of Paolino's claims, although given the
information about his history of lawsuits, which we will take up shortly,
they undoubtedly should have.
Nor did the Sarasota Herald-Tribune
story bother to trouble their readers with any information, all easily
available, about Paolino's highly-colorful background.
A brief description of what the
Without a doubt the one event in
Lou Paolino's checkered career for which he will be remembered for his entire
life was the infamous Khian Sea garbage barge, which spent almost
two years in the news as it sailed around the world looking for someone to take
its load of toxic waste.
The man who owned the barge was Louis D. Paolino. He received funding from Argyll
Equities LLC, which also invested in the
Kovar Crime family of business
fraudsters at St. Petersburg FL's SkyWay Aircraft, owners of
a DC9 they kept at the Clearwater-St. Pete Airport which would be busted
carrying 5.5 tons of cocaine.
cargo of the Khian Sea," as it became known, was so
toxic that even New Jersey refused to accept it.
Garbage King can't shake 'stench of dead fish'
packed to the gills with
14,000 tons of waste from a Philadelphia dump site.
the territorial waters of the United States, went to the Bahamas, to the
Dominican Republic, Honduras, Bermuda, Guinea Bissau, the Netherlands
Some ports even turned the ship away at
Eventually the crew mutinied, and two
of the shipping company went to prison for ordering the crew to dump the ash
over the side
in the middle of the ocean.
No one would take it...that
is, until it got to Haiti.
There, U.S.-backed dictator
"Baby Doc" Duvalier issued a permit for
the "fertilizer," and 4,000
tons was dumped onto the beach in the town of Gonalves, where it rotted for 12
Baby Doc today lives in the
South of France.
"Billionaire Trashman Cant Shake Stench of Garbage"
Paolino tired of all the fun to be had in the garbage business, he sold his
company to billionaire
trashman Wayne Huizenga—himself no stranger to accusations of Mob
influence—for more than $1 billion.
runs, news accounts have demurely reported, “much of New York's extremely
lucrative garbage industry.”
When the Huizenga-owned Miami
Dolphins played an NFL exhibition game in London several years ago, British
tabloids had a vicious field day. "Is Mafia Boss Sitting Next to You On
the Bus?" asked one headline.
"Former Garbage King Wayne
Can't Shake Stench of Dead Fish,” sang another.
Curiously the other recent owner of
Huffman Aviation who has known criminal associates, Wallace J Hilliard, is also
in tight with Wayne Huizenga.
chief aviation mechanic (while Mohamed Atta was attending his flight
school) was Dave Montgomery, who told us of witnessing a meeting Hilliard had
with Huizenga on the Dolphins owner’s helicopter, which bore the Dolphins logo.
“Hilliard came out and got into the
helicopter, and the two men held a meeting that lasted almost an hour, right on
the apron,” Montgomery stated, “before Hilliard exited the helicopter and
Huizenga took off.”
Garbage King of Jersey? Fuggedaboutit!
we began to examine Nadel’s business associates, we immediately came upon a name
we knew from what we had thought was another story altogether...
We first heard the name Louis
Paolino in connection with the American-registered DC9 from St. Petersburg FL
busted in Mexico’s Yucatan while carrying 5.5 tons of cocaine, on April 11,
Several years ago Louis Paolino
became the grateful recipient of a $6 million loan from a mysterious private
equity firm called Argyll Equities LLC, in Boerne, TX, and La
It was one of only three loans the
secretive company is known to have made. Another was infamous SkyWay
Aircraft was a complete fraud which existed primarily to facilitate a pump &
dump stock play. SkyWay had no product, no market,
and no prospects.
But that didn't stop the avalanche
of self-congratulatory press releases touting deals that never happened with
companies and individuals who did not, in fact, exist.
Eventually SkyWay was “busted
out”—had its assets looted—in 2003 and 2004.
Although Argyll’s investment in
SkyWay diminished daily, the company still might have proved attractive in other
"Homeland Security been berry berry good to me!"
Skyway owned several DC9 airliners,
ostensibly for demonstrations of technology that the company would never
possess. Observers at Clearwater-St. Pete International Airport speculated that
there had to have been another reason.
The firm provided an excuse for
keeping several intercontinental aircraft handy.
of SkyWay's two DC9's had been painted to impersonate—complete with phony
Government Seal on the door—an official aircraft from the Dept. of Homeland
Although this DC9 sat on the tarmac
at Clearwater-St Pete International Airport for over a year, just one hundred
yards from the major U.S. Coast Guard Gulf Coast interdiction facility, no one
at the Coast Guard facility apparently noticed the ruse.
Then while flying back from a
rendezvous in either Columbia or Venezuela—accounts vary—the DC9 had been
caught carrying 5.5 tons of cocaine, at an out-of-the-way rural airport on
Mexico’s Yucatan Peninsula.
The third time's the charm. What? Another drug smuggler!?
Equities' only funded three deals. Their third plunge into the world of investment banking-- after SkyWay
Aircraft and Louis Paulino--was arranging a $17 million
loan for a Mexican businessman, who then provided "significant capital,"
according to Chilean news accounts, to “Chilean
narcotics trafficker Manuel Vicente Losada."
This news came out after Losada was arrested in the Chilean
capital of Santiago. He had been “linked to a shipment of five tons of cocaine
which U.S. drug enforcement officials in Miami intercepted over six years ago on
the MV Harbour as it headed toward Guantanamo Bay.”
(The italics are ours. We were
Why were Caribbean dopers steering a
course for a highly-secure U.S. military facility?
Perhaps someday we will know.
Then, too, perhaps someday pigs will fly.
Sue me Sue You Sue Sue Sue
It seemed unlikely that
Louis Paolino, a
highly-intelligent and well-connected Philadelphia native, would have been
unaware, before filing suit against Nadel's fund managers, of the elementary
fact that Art Nadel had stripped out all the money in
his hedge funds.
However, a glance at Paolino's past
performance leads to the suspicion that the lawsuit might be strictly pro
Paolino files lawsuits against
almost everyone he is in business, or does business, with. It seems to be some kind of
Assembling a full description of
Paolino's lawsuits might strain the resources of America's criminal records
system...Several examples will have to suffice. Among the more interesting:
Paolino sued Argyll
(in a RICO civil claim, no less.)
also sued Argyll attorney
John Francyzk (who we will return to in upcoming stories) who has an interesting
connection with the
Teamster Central State's Pension Fund.
"Philanthropic" maybe. But
not a nice man.
As first revealed by
Sarasota Private Investigator Bill Warner, Nadel was already in
business with associates of organized crime by the early 1970’s.
Nadel was a principal in a company
called Florida Nursing Corp. His partner, Howard Sturman, was at the center of a
corporate takeover that led to racketeering charges against members of the
Genovese Crime Family.
With an assist from one of the
invaluable citizen-researchers who will someday make newspapers like the
Sarasota Herald-Tribune obsolete, we discovered that newspaper descriptions of
Nadel's "charitable feelings" may have been overdone.
In 1971, Nadel was acting as attorney for a New York company seeking to evict
several hundred residents of a company town alongside a lime calcification plant
previously owned by U.S. Gypsum in Cheshire, Massachusetts.
The plant, which had been in
continuous operation for over 100 years, was purchased by Nadel’s client, North
The eviction was highly
“Twenty-one families, many
of them poor, with large numbers of small children, have been living in company
housing on the site, renting 5 rooms for $25 a month, or 10 rooms without heat
for $50,” reported the local North Adams Transcript.
“Do you care about these people
facing eviction?” one of the family’s representatives asked Nadel, during a
meeting called to ask the new owners for more time.
“Why should I?”
replied Arthur Nadel.
What a sweetheart. We bet he fit
right in in Sarasota.
NEXT: The War
for Control of the Venice FL "Plaza"