Posted Jul 15, 2014 06:15 pm CDT
A former South Florida bank president convicted of bank fraud and sentenced to probation decades ago is the latest individual charged—and expected to take a plea—in a federal criminal case linked to a swindle of at least $1.2 billion by now-imprisoned former attorney Scott Rothstein.
Frank Prevé Jr., 70, was charged Monday with wire fraud conspiracy. The feds say he steered investors to Rothstein even though he knew the then-Fort Lauderdale law firm managing partner had been depleting investor funds that were supposed to be held in trust at a local bank, according to the Miami Herald (sub. req.) and the Sun Sentinel.
Prevé was charged by information rather than by indictment and his lawyer, Ramon Rasco, said Monday that a plea agreement is expected, the Herald reports. “He is cooperating with the government and doing everything in his powers to help investors,” Rasco said.
Prevé had no direct knowledge of Rothstein’s scheme, the lawyer told the Herald. Court records say Prevé worked as an independent contractor for the Banyon Group of hedge funds, which invested more than $157 million with Rothstein, the Sun Sentinel reports.
Rothstein, who is now disbarred and serving a 50-year federal prison term, persuaded investors to purchase, at a discount, future income supposedly streaming from confidential structured settlements of sexual harassment, whistleblower and workplace claims. In fact, the settlements, backed by faked documents and said to be guaranteed by Rothstein Rosenfeldt Adler, were fictitious. The Ponzi scheme lasted for several years before the swindle became apparent in late 2009 as the law firm ran out of funds and Rothstein briefly fled to Morocco.
Meanwhile, federal prosecutors and the trustee overseeing the bankruptcy of RRA have agreed on a plan for the $50 million in forfeiture funds raised by selling Rothstein’s property, such as luxury vehicles, boats and real estate, the Associated Press reports.
Some $28 million will be paid to qualified victims of Rothstein’s fraud, while another $21 million will go to law firm bankruptcy claimants.
Approximately 24 individuals have been convicted so far in cases liked to Rothstein, the AP says.
ABAJournal.com: “3 new pleas linked to ex-law firm chief serving 50 years in $1.2B swindle; 20th conviction now looms”
ABAJournal.com: “3rd name partner of law firm shuttered by founder’s $1.4B swindle takes plea in felony case”