October 8, 2010 / 7:51 PM / 8 years ago

Florida Ponzi schemer's aide gets 10-year sentence

MIAMI (Reuters) - An ex-aide of a Florida lawyer who ran a $1.2 billion Ponzi scheme was sentenced to 10 years in prison on Friday, the latest development in a high-profile case that drew attention to investment fraud in the state.

Debra Villegas, former chief operating officer of a now-defunct Fort Lauderdale law firm at the center of the case, pleaded guilty to money laundering charges earlier this year.

A U.S. federal judge also ordered her to pay $363 million in restitution, her lawyer said.

Villegas, 43, worked at the Rothstein, Rosenfeldt & Adler law firm, whose managing partner, Scott Rothstein, is serving a 50-year jail term after admitting he had conned investors who believed they were buying shares in legal settlements.

“One by one, the dominos in this billion dollar Ponzi scheme are falling,” said U.S. District Attorney Wilfredo Ferrer. “This is not the last to fall.”

Rothstein surrendered to authorities late last year after fleeing to Morocco and was sentenced in June.

Prosecutors portrayed Villegas as a key player in the law firm and charged she conspired to assist Rothstein in a Ponzi scheme built around selling nonexistent settlements in sexual harassment and whistle-blower actions.

The legal settlements did not actually exist and Villegas admitted she had helped concoct phony court documents that investors were shown.

As in typical Ponzi schemes, it used new investors’ money to pay previous investors.

Both Rothstein and Villegas were cooperating with authorities who are investigating more lawyers and employees at the law firm, Villegas’ lawyer, Robert Stickney, said.

Rothstein has been compared with other Ponzi scheme kingpins, including Bernard Madoff, who pleaded guilty to a $65 billion investment fraud and is serving a 150-year prison sentence.

Both men preyed on wealthy South Florida investors, among others, who were lured by the promise of a steady income stream and better-than-average returns on their investment.

South Florida, home to one of the largest concentrations of wealth in the United States, has been hit by several Ponzi schemes in recent years.

Editing by Pascal Fletcher and Gerald E. McCormick

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