Florida law firm seeks probe of alleged funds scam

MIAMI (Reuters) - A prominent Florida law firm is seeking dissolution and the emergency appointment of a receiver to probe allegations that its managing partner misappropriated substantial funds from investor trust accounts, court documents and media reports said.

A complaint filed in Broward County Circuit Court by Fort Lauderdale firm Rothstein Rosenfeldt Adler, P.A. cites allegations by investors that chief executive officer and managing partner Scott W. Rothstein may have misused investor money and fabricated nonexistent structured legal settlements for sale.

"Rothstein ... has, according to assertions of certain investors, allegedly orchestrated a substantial misappropriation of funds from investor trust accounts that made use of the law firm's name," the filing on Monday said.

The Miami Herald reported on Tuesday that federal authorities were carrying out a criminal investigation into Rothstein's activities. The newspaper said he was suspected of operating a Ponzi scheme by selling tens of millions of dollars in fabricated legal settlements to investors.

The settlement ventures apparently involved investors paying sums to individuals owed money from court rulings for the right to collect the full amount of the settlements later.

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.

The complaint by Rothstein Rosenfeldt Adler -- which was founded in 2002 and has offices in Florida, New York and Venezuela -- said the firm seeks dissolution and appointment of a receiver to be able to "undertake all actions necessary to uncover the extent of Defendant Rothstein's activities."

Neither Rothstein nor his lawyer was immediately available to comment.

The Miami Herald reported that Rothstein and his law firm had made tens of thousands of dollars of political contributions locally to both Democratic and Republican political candidates.

Citing unidentified sources, the newspaper said the FBI and other federal investigators were investigating a Rothstein-controlled investment company run under the mantle of his law firm.

(Reporting by Pascal Fletcher, editing by Gerald E. McCormick)