Lawyer Scott Rothstein Arrested in Suspected $1B Ponzi Scheme
Posted Dec 01, 2009 02:45 pm CST
High-flying South Florida lawyer Scott Rothstein has been arrested on racketeering charges in a suspected $1 billion Ponzi Scheme.
FBI agents arrested Rothstein this morning, the Miami Herald reports. A spokeswoman for the Miami U.S. Attorney’s office confirmed the RICO charge and said Rothstein is also charged with mail fraud, wire fraud, money laundering and conspiracy, the Associated Press reports.
In a court hearing this morning, Rothstein pleaded not guilty to all counts, according to Bloomberg. The U.S. Attorney’s office in Miami has scheduled a news conference in the case for this afternoon.
Rothstein was a well-connected political fundraiser and big spender who had invested in a restaurant group, founded a watch company and invested in the former Versace mansion. The government is seeking to seize his 2009 Bugatti, 19 other luxury cars, 15 pieces of property and $15 million in bank accounts in Morocco.
He is accused of operating a Ponzi scheme involving investments in legal settlements. Investors were asked to make an up-front payment, supposedly to a lawsuit plaintiff who was expected to receive a series of payments over a period of months or years. Later, the investors were told, they would get back the full settlement amount. “But it was all a scam,” according to the Miami Herald. “Federal prosecutors said there were no plaintiffs, no defendants, no lawsuits.”
A grand jury convened by the federal prosecutor’s office will consider criminal charges against others in the alleged conspiracy, including, possibly, former employees of Rothstein’s dissolved law firm, Rothstein Rosenfeldt Adler, according to the Miami Herald.
Federal prosecutors have alleged proceeds from the Ponzi scheme helped finance Rothstein Rosenfeldt Adler. The Florida Bar is investigating four lawyers from the firm besides Rothstein, who has surrendered his law license.