Saga of law firm chief's $1.2B fraud to end with auction of home, yacht, $550K watch and other bling
Not quite six years after Scott Rothstein began serving a 50-year federal prison term under the witness protection program, the saga of the massive Ponzi scheme he operated while at the helm of a prominent South Florida law firm is nearing a conclusion.
In April, some $10 million in jewelry accumulated by Rothstein, 53, and his now ex-wife, Kim, 41, will be sold at auction. The bling includes a watch that originally retailed for about $550,000 and a 12-carat fancy intense yellow diamond ring that she tried to hide from the feds, according to the Daily Business Review (sub. req.), the Sun Sentinel and the Tampa Bay Times.
Also headed to the block are a $1 million yacht and an unfinished Boca Raton home with eight bathrooms and an approved bid of $2.5 million.
About 30 individuals were convicted in connection with the $1.2 billion to $1.4 billion scheme, which involved selling to investors the income stream from purported structured settlements in fictitious lawsuits. Among them were some of Scott Rothstein’s fellow attorneys and employees at now-defunct Rothstein Rosenfeldt Adler and Kim Rothstein, who served 15 months for reportedly trying to conceal $1 million in assets, including the 12-carat diamond ring that will soon be auctioned.
“The Boca house, the yacht and the jewelry are the last significant remaining assets left to be liquidated, bringing an end to what can easily be described as one of the most visible cases in South Florida history,” attorney Michael Goldberg, who is handling the liquidation, told the Daily Business Review. “This is truly an unprecedented result in a case involving a massive Ponzi scheme where victims were owed hundreds of millions of dollars at the start.”
Because other victims will already have been made whole, auction proceeds will go to TD Bank. The bank, which was ordered to pay $67 million to one group of defrauded Rothstein investors, and paid out a total of nearly $300 million in settlements, attorney Bill Scherer, who represented investors, told the Sun Sentinel.
Fired former TD Bank executive Frank Spinosa pleaded guilty last year and was sentenced in December to 30 months, as the Daily Business Review (sub. req.) and Sun Sentinel reported at the time.
Michael Szafranski was an investment adviser who pretended to be working in a fiduciary capacity for investors as an “independent verifier.” But he was in fact paid by Rothstein to recruit investors. He also took a plea last year and, after helping the feds prosecute Spinosa, was sentenced to 2½ years in October, the Daily Business Review (sub. req.) and Sun Sentinel reported.
Related coverage:
ABAJournal.com: “Ex-administrator helped convict 6 lawyers, feds say, asking that judge cut her prison time in half”
ABAJournal.com: “11th Circuit OKs wire-fraud conviction of lawyer who impersonated state bar official”
See also:
Broward-Palm Beach New Times: “Ovi Levy, Scott Rothstein’s “Little Brother,” Says He Was “Piece of Prey” in Ponzi Scheme”
WPLG: “Convicted partner of Ponzi schemer Scott Rothstein tells his story”
