MIAMI (Reuters) - A prominent Florida lawyer whose assets were seized this week by federal agents is believed to have run an elaborate Ponzi scheme that defrauded investors of hundreds of million of dollars, authorities said.
Criminal charges have not yet been filed against 47-year-old Scott Rothstein, whose Fort Lauderdale law firm Rothstein, Rosenfeldt, Adler, PA was placed in receivership last week.
But in a court filing on Monday prosecutors said Rothstein, who lived a luxury lifestyle and helped bankroll local politicians, masterminded a scheme in which he sold bogus or nonexistent legal settlements to unsuspecting investors since at least 2005.
“The investigation has disclosed that these types of fraudulent investments had been offered by Rothstein to a variety of persons and entities throughout the United States for at least four years, and the scheme involved hundreds of millions of dollars,” the court filing said.
Rothstein, who returned from a trip to Morocco last week, told Miami Fox TV affiliate WSVN late on Monday that he had made “a very serious mistake” and intended to make amends.
“If anyone’s lost any money, I‘m going to do every single thing in my power to make sure that every single penny is recovered,” he said in the interview broadcast by WSVN, speaking with his attorney Marc Nurik at his side.
Neither Rothstein nor his lawyer could immediately be reached for comment.
The court filing, called a “Complaint for Forfeiture in Rem,” was signed by the U.S. Attorney for the Southern District of Florida and used to justify the seizure by federal agents of high-end real estate properties, luxury vehicles and at least one yacht belonging to Rothstein.
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 by the courts to buy the right to collect the full amount of the settlements later.
Federal authorities have declined to give details of the ongoing investigation into Rothstein’s alleged scam, in which the court filing said new investor money was used to pay previous investors in the classic Ponzi scheme model.
But the court papers said Rothstein had acted together with unidentified co-conspirators.
South Florida has been rocked by a number of high-profile Ponzi schemes this year including fallout from the fraud scandals surrounding convicted Wall Street swindler Bernard Madoff and accused Texas financier Allen Stanford.
Reporting by Tom Brown; Editing by Pascal Fletcher and Matthew Lewis