IT’S OFFICIAL: Scott Rothstein Is A Racketeer; Disbarred Lawyer Pleads Guilty, Forfeits $1.2 Billion; FBI Cites ‘Red Flags,’ IRS Cites ‘Lies’
Disbarred Florida attorney Scott Rothstein has pleaded guilty to a racketeering conspiracy that included mail fraud and wire fraud, and to two separate counts of wire fraud.
“Today’s guilty plea is an important step in bringing to justice those who perpetrated a $1.2 billion Ponzi scheme under the guise of operating a legitimate law firm,” said U.S. Attorney Jeffrey H. Sloman.
The case is far from over, even with the plea, Sloman said.
“The U.S. Attorney’s office will continue to pursue all leads and evidence as they are uncovered,” Sloman said. “Rest assured, those who are criminally culpable will be held accountable. Victims can also take comfort in knowing that the United States will do everything it can to identify, seize and equitably refund fraud proceeds.”
Rothstein, 47, of Fort Lauderdale, forfeited $1.2 billion, 24 pieces of real estate, luxury cars such as Bugattis, Rolls-Royces and Cadillacs, yachts, shares in businesses and more. He faces a maximum sentence of 100 years in prison.
The elaborate Ponzi 
fraud included bogus legal settlements, forged court documents, fraudulent promissory notes, fraudulent campaign donations and gratuities paid to “high ranking members of police agencies,” prosecutors said.
A senior FBI agent said Rothstein charmed millions and millions of dollars from investors.
“Scott Rothstein used a classic approach to mislead investors — an ostentatious lifestyle, a charismatic personality and guarantees of sky-high returns — all red flags in the world of Ponzi schemes,” said FBI Special Agent in Charge John V. Gillies.
“It is a lesson for all investors to learn that they need to look beyond the hype,” Gillies said. “We will continue to work with our partners to investigate investment fraud schemes.”
A senior IRS investigator said Rothstein traded on appearances.
“This case shows that the appearance of success can be a mask for a tangled financial web of lies,” said Daniel W. Auer, IRS Special Agent in Charge. ‘This investigation is not over, as we are committed to ‘following the money trail.’ We will continue to pursue the evidence wherever it leads, leaving no financial stone unturned.”
Rothstein’s sentencing is scheduled for May 5.
Scott Rothstein racked up 20 million Amex points
http://www.miamiherald.com/486/story/1420208.html
That’s a lot of points!
Hi Tony,
As the link above points out, the Feds are treating those points as potential assets for victims. Man, what a paper chase.
BTW, I read Rothstein’s plea deal last night. The Feds agreed not to oppose his bid to be placed in a federal prison with the lowest security level believed appropriate by the Bureau of Prisons.
So, Rothstein didn’t have much leverage, and the Feds gave him a small carrot that reflected his lack of leverage.
One thing he does have is information. It looks as though he’s going to use it to try to minimize his jail time. The Feds have used the word “co-conspirators” liberally in this case.
Patrick
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