Fla. lawyer to plead guilty in $1 bln Ponzi case

* Disgraced lawyer charged with racketeering conspiracy

* Prosecutors say he bilked investors out of $1.2 billion

* Scott Rothstein faces up to 100 years in prison

By Tom Brown

MIAMI, Jan 6 (Reuters) - Accused Florida Ponzi mastermind
Scott Rothstein has decided to plead guilty to charges he ran
an investment scheme that bilked clients out of more than $1
billion, authorities said on Wednesday.

Marc Nurik, an attorney for Rothstein, announced the jailed
and disbarred lawyer intends to plead guilty during a brief
morning appearance with his client in federal court in Fort
Lauderdale, Florida.

A Jan. 27 date was set for a formal hearing when Rothstein,
who faces up to 100 years in prison if convicted on all counts,
will change his initial plea of not guilty to racketeering and
fraud conspiracy charges.

Rothstein, who fled to Morocco in late October but returned
to Florida in early November, has been held without bond since
he surrendered to the FBI last month.

He was charged under a statute often used to prosecute
organized crime chiefs.

The massive scope of Rothstein's alleged scheme has
prompted some pundits to place him in company with other Ponzi
scheme kingpins including Bernard Madoff, who pleaded guilty to
a $65 billion investment fraud and is now serving a 150-year
prison sentence.

Court documents have said Rothstein acted with
co-conspirators to carry out the $1.2 billion scheme, creating
false bank documents that conned investors while providing
"gratuities to high-ranking members of police agencies" in
order to deflect law enforcement scrutiny.

No co-conspirators have been identified but the documents,
along with Rothstein's imminent guilty plea, suggest that
additional defendants could be charged.

Lawrence LaVecchio, a prosecutor involved in the case,
declined to comment when asked about the reasons for
Rothstein's change of plea and Nurik could not be reached for
immediate comment.

The cigar-chomping Rothstein, a frequent campaign
contributor often photographed with local politicians, lived a
lavish life with opulent homes and a fleet of foreign sports
cars. He used his connections and charm to lure wealthy friends
and patrons to invest with him.

BOGUS SETTLEMENTS

Court documents accuse Rothstein, 47, of selling shares in
fabricated legal settlements to unsuspecting investors since at
least 2005 and using new investor money to pay previous
investors in the classic Ponzi scheme model.

He claimed to have won lucrative awards in workplace
discrimination and whistleblower lawsuits, when no such
settlements existed, federal investigators said.

In one instance, prosecutors charged, Rothstein falsely
told clients they had won a $23 million judgment in a lawsuit
but needed to put up more than twice that amount as a bond in
order to recover the money.

The unsuspecting clients did so, and Rothstein used their
money to run his now-defunct law firm, make political and
charitable donations, and buy cars, yachts, jewelry and
controlling interests in restaurants and other businesses,
prosecutors charged.

FBI and Internal Revenue Service agents raided Rothstein's
Fort Lauderdale law offices in November and seized his
waterfront home, yacht and nearly two dozen properties in
Florida, New York and Rhode Island.

Investors have already begun filing lawsuits saying they
were cheated and should get a share of the assets.

Rothstein was chief executive and managing partner in the
firm of Rothstein Rosenfeldt Adler PA, which had about 150
employees and was placed in receivership in November.
(Reporting by Tom Brown, editing by Matthew Lewis)