FBI agents search law firm in missing funds probe

Thu Nov 5, 2009 11:39am EST

 * Lawyers say investigation probing possible Ponzi scheme
 * Prominent Fort Lauderdale lawyer under investigation
 * Partner denounced alleged "substantial" misappropriation
 MIAMI, Nov 5 (Reuters) - U.S. federal agents have searched
the Fort Lauderdale office of a prominent Florida lawyer in an
investigation into his alleged "substantial" misappropriation
of investor funds, his company partner said.
 Scott Rothstein, 47, of Fort Lauderdale firm Rothstein
Rosenfeldt Adler, P.A., returned from Morocco on Tuesday to
face an investigation into investors' allegations that hundreds
of millions of dollars of their funds may be missing.
 Rothstein's partner, the law firm's president Stuart
Rosenfeldt, said FBI and Treasury Department agents served a
warrant to search the firm's Fort Lauderdale offices late on
Wednesday, and he and the company were cooperating fully.
 "We want them to search and look for everything they need
to find evidence of any crimes that may have occurred,"
Rosenfeldt said in video posted on Thursday on the Florida
Sun-Sentinel's website.
 Lawyers and investors have told reporters the ongoing
inquiry was focusing on whether Rothstein, who lived a luxury
lifestyle and donated millions of dollars to local politicians,
may have operated a Ponzi scheme at the law firm in which he
allegedly sold fabricated legal settlements to investors.
 The settlement ventures allegedly offered to investors by
Rothstein involved lucrative whistle-blower and employment
discrimination cases. The investors would make up-front cash
payments to individuals owed money from the court cases to buy
the right to collect the full amount of the settlements later.
 Rosenfeldt himself denounced the suspected wrongdoing on
Monday, filing a legal complaint in a Fort Lauderdale court to
wind up the law company and appoint a receiver. The complaint
cited allegations that Rothstein had misappropriated
"substantial funds" from investor trust accounts.
 Federal authorities have declined to give details of the
ongoing investigation. Neither Rothstein nor his lawyer were
available to comment.
 The Miami Herald on Thursday quoted Rosenfeldt as saying
that when he checked the law firm's operational accounts on
Sunday he saw a balance of only $117,000. A retired Miami-Dade
judge has been appointed to act as receiver.
 In his comments to The Miami Herald, Rosenfeldt said
Rothstein had handled the firm's accounts while he ran the
legal side of the law company, which was founded in 2002 and
had offices in Florida, New York and Venezuela
 Asked in the Sun-Sentinel video whether he had spoken to
Rothstein this week, he replied: "I don't want to speak to my
partner."
 The case was the latest high-profile fraud scandal to hit
Florida, the home of many wealthy Americans.
 The southeastern U.S. state has been rocked by a number of
high-profile Ponzi schemes in the course of the year, including
fallout from the fraud scandals surrounding convicted Wall
Street swindler Bernard Madoff and accused Texas financier
Allen Stanford.
 (Reporting by Pascal Fletcher; Editing by Toni Reinhold)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.