Fort Lauderdale, FL – Scott Rothstein Pleads Guilty to All Counts in $1.2B Ponzi scam

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    Fort Lauderdale, FL – A disbarred attorney who courted politicians and star athletes and led a flamboyant lifestyle even by South Florida standards pleaded guilty Wednesday to federal charges that he ran a $1.2 billion Ponzi scheme.

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    Scott Rothstein, 47, pleaded guilty to all five counts against him, including wire fraud, money-laundering conspiracy and a racketeering charge commonly used to take down Mafia chieftains. The charges carry a maximum potential sentence of 100 years in federal prison. Sentencing is set for May 6.

    The plea caps a downward spiral that began in late October, when court documents say Rothstein fled Florida on a chartered jet to Morocco carrying $500,000 in cash after wiring another $16 million to a Casablanca account he controlled. He returned to face charges and has been in federal custody since the FBI arrested him Dec. 1.

    It was a swift fall for Rothstein, who in the months before had hosted fundraisers or other events for state and national politicians including Florida GOP Gov. Charlie Crist and 2008 Republican presidential nominee John McCain and his running mate, former Alaska Gov. Sarah Palin.

    The state’s Democratic and Republican parties and Crist have since returned hundreds of thousands in contributions from Rothstein, whose office was festooned with political and sports photos and memorabilia. He gave generously to dozens of charities.

    Prosecutors say it was all an elaborate facade, meant to lend an air of power and respectability to Rothstein’s four-year scam. They say he used fake legal cases — at least once forging the signature of a federal judge — to lure people with promises of huge payouts over time in exchange for an up-front investment.

    “He presented a dangerous mixture of public trust with the opportunity to make purported easy money,” said Martin B. Goldberg, a former federal prosecutor now in private practice.

    The ripple effects have been far-reaching.

    Authorities have seized two dozen homes and other real estate once owned by Rothstein, along with 20 exotic cars — Ferraris, a Bugatti Veyron, a Maserati among them — as well as numerous bank accounts, an 87-foot yacht, expensive jewelry and other assets. All will eventually be used to repay dozens of jilted investors, many of whom have filed lawsuits seeking at least some of their money back.

    The law firm Rothstein Rosenfeldt Adler is now defunct, with as many as 50 of its 70 former attorneys under investigation by the Florida Bar for possible irregularities involving client trust funds, according to Bar spokeswoman Francine Walker. Prosecutors have also said former Rothstein associates may face criminal charges, along with bankers and others who might have been involved in the scheme.

    Also under investigation by Fort Lauderdale officials is the city’s police chief, Frank Adderley, who once flew with Rothstein on a private jet to attend a Miami Dolphins football game at the New York Jets. City officials are rewriting rules that allowed off-duty officers to provide security for Rothstein’s home and business ventures.

    Meanwhile, the Florida Democratic Party returned $200,000 in contributions from Rothstein and his law firm, with the state GOP returning some $150,000. Crist returned $9,600 that Rothstein and his wife, Kim, had given to Crist’s U.S. Senate campaign.


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    11 Comments
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    A Word to the Wise
    A Word to the Wise
    14 years ago

    It only affirms what our chachomim have said “Sof Ganav L’tliya”

    Anonymous
    Anonymous
    14 years ago

    So… the both the democrats and republicans returned money received from this crook. What a sad chillul H’ it would be if the local Lubavitchers do not also return some of the contributions received from this convict.

    Dave
    Dave
    14 years ago

    Sloppy job; Arnold Rothstein z”l wouldn’t have been so careless.

    Anonymous
    Anonymous
    14 years ago

    What about this guy’s friends who invested in this Ponzi and collected millions of dollars in fraudulent gains? They too should be arrested. This was an inside job. The first investors in a Ponzi triangle always make the money before it collapses. This is a massive fraud.

    Anonymous
    Anonymous
    14 years ago

    he pleaded to fast maybe hes in to snitching

    Anonymous
    Anonymous
    14 years ago

    I know where they should him to prison and who his cell-mate should be!

    Anonymous
    Anonymous
    14 years ago

    BH he pleaded guyilty so we don’t have to go thru the chillul hashem of a trial.

    Anonymous
    Anonymous
    14 years ago

    Id love to know the real reason he returned willingly from Morocco. Ran out of dough? Something doesnt make sense