Rothstein gets 50 years for Ponzi scheme
By Palm Beach Business.com
FORT LAUDERDALE — Hot-shot attorney turned con man Scott Rothstein will be spending a long, long time in prison for his role in masterminding a $1.2 billion Ponzi scheme.
Federal Judge James I. Cohn on Wednesday sentenced Rothstein to 50 years in prison, plus 3 years of supervised release and forfeiture of real estate, cars, bank accounts, investments and other property.
In January, Rothstein, 47, pleaded guilty to conspiracy to violate the RICO statute, conspiracy to commit money laundering, conspiracy to commit mail and wire fraud and two counts of wire fraud.
Rothstein was the founder of the Fort Lauderdale law firm of Rothstein, Rosenfeldt and Adler. The firm collapsed last November, as Rothstein’s scheme unraveled.
Said U.S. Attorney Wifredo A. Ferrer: “This rags-to-riches-to-jail saga is a humbling reminder of what can happen when greed and ambition run amuck. Rothstein manipulated and abused the trust of all whom he knew – his friends, family, business partners, legal colleagues, political figures, and even charitable organizations – to enhance his reputation, standing, and power in the community. All that he had accomplished crashed and burned when his elaborate Ponzi scheme fell apart. Today’s sentence punishes the defendant for his thievery, and hopefully brings some sense of justice to the victims of this massive fraud.”
According to court records and statements made in court, Rothstein used his law firm to convince investors to lend money to nonexistent borrowers supposedly for short-term business needs. He also got investors to fund loans to the firm’s clients who had won confidential lawsuit settlements worth hundreds of thousands of dollars or even a million or more. Rothstein told the investors that his clients were willing to pay high interest rates for the loans.
Two problems: neither the clients nor the settlements were real.
Altogether, Rothstein took investors for the staggering sum of $1.2 billion, some of which went to fund political contributions, gifts and bonuses to law firm members, freebies to high-ranking police officeres. Other money went into investments and to gain access to politicians and sports figures..
“While our investigation continues, this chapter in the Rothstein saga is coming to a close with important lessons for all to learn,” said John V. Gillies, special agent in charge of the FBI Miami division.
