Scott Rothstein, a Florida lawyer who co-founded the now-defunct firm, Rothstein Rosenfeldt Adler, pleaded guilty to running a US$1.2 billion Ponzi scheme and five counts of RICO conspiracy, fraud and money laundering in the biggest investment fraud case in South Florida history. Rothstein, 47, is expected to receive a 30 to 50 year sentence on May 6. At the time of his arrest, Rothstein owned more than a dozen homes, 21 high end luxury cars and a 87-foot yacht. Seven years ago, he was worth only US$200,000.
According to an amended complaint filed in the U.S. District Court, Southern District of Florid, by the U.S. Attorney’s office, Rothstein solicited clients to invest in fictitious legal settlements. Investors were told that the settlements could be purchased at a discount and repaid to the investors at face value over time. Clients who agreed to invest were directed to wire funds to a TD Bank.
Three of Rothstein’s partners are being asked to return US$18 million in firm payments, loans and other payments that bunkrupycy lawyers now acting for the firm say they were not entitled to.