Bankruptcy Law

Trustee Seeks Law Firm Records to ID Any Other Attorneys in $1.2B Rothstein Scheme

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Updated: In an effort to identify others who may have been involved in ex-attorney Scott Rothstein’s reported $1.2 billion Ponzi scheme, a bankruptcy trustee overseeing the dissolution of Rothstein Rosenfeldt Adler has asked a federal judge to order a California technology company to produce records of confidential electronic conversations between Rothstein and his lawyers and senior staff.

Qtask has not responded to a prior records subpoena, so trustee Herbert Stettin asked a federal bankruptcy court judge in Fort Lauderdale to compel production, reports the South Florida Sun Sentinel.

Rothstein, who pleaded guilty earlier this year to wire fraud, racketeering and money laundering conspiracy, is to be sentenced in May. He invested $7 million in Qtask and owned about 25 percent of the company, which provides secure Web services, the newspaper reports.

Qtask chief executive Russell Mix tells the Sun Sentinel that he is working to comply with the subpoena but indicates that Rothstein and anyone else involved would have been unlikely to use Qtask technology for criminal activity because its records can’t be deleted.

Otherwise, “these would be the dumbest criminals of all time,” says Mix. “Whatever you put in becomes permanent.”

Stettin has filed suit against three RRA partners, seeking to recoup for the bankruptcy estate more than $15 million in alleged overpayments and advances, and may also seek to recover from other firm lawyers who reportedly received loans from RRA.

Related coverage: “Trustee Sues Rothstein Partner for $10M, Alleges Charges for Jewelry, Home Repairs & Reptiles” “Latest Twist in Rothstein Case: Firm Loaned $35M to Lawyers & Others”

South Florida Business Journal: “Rothstein probe targets Adler”

Updated at 5:35 p.m. to include information from subsequent post.

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