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Politically powerful lawyer Scott Rothstein gets 50 years in Ponzi fraud

FT. LAUDERDALE — Scott Rothstein, South Florida Ponzi schemer extraordinaire, received a 50-year prison sentence Wednesday after a hearing in federal court in Fort Lauderdale.

U.S. District Judge James Cohn, an Alabama native appointed by President George W. Bush, gave the disbarred lawyer more than what prosecutors requested for his crime as the mastermind of South Florida's biggest financial fraud.

"I am truly and deeply sorry for what I have done," Rothstein said, addressing the court wearing cuffs on his wrists and ankles. "I don't expect your forgiveness."

He apologized to investors he stole from, to his law firm colleagues, to his firm's clients, to the court system, fellow lawyers, to charities.

Rothstein, convicted of running a $1.2 billion investment scam, had said he deserved no more than 30 years because he pleaded guilty, spilled his guts to the feds and starred in an FBI sting that took down a reputed Italian Mafia figure.

In his sentencing, Cohn called Rothstein's investment scam a "tsunami'' that he created through his law firm, his political connections, his charities and ultimately, by forging the signatures of judges in a legal case between auto magnate Ed Morse and an interior decorator.

Rothstein "created an appearance of legitimacy," Cohn said. "We all know it was all a facade, a fraud."

Cohn was particularly disturbed by Rothstein's forging of documents in the Morse case, which cost the tycoon $57 million, stolen by Rothstein.

"He forged these court orders to perpetuate the Ponzi scheme. There can be no conduct more reviled than a lawyer perpetrating a fraud on the court."

Federal prosecutors had sought a sentence of 40 years for Rothstein, 47, who is expected to enter a federal witness protection program.

Rothstein will go down in South Florida history as a one-man wrecking ball who destroyed his own 70-attorney law firm, Rothstein Rosenfeldt Adler, and used it to prop himself up as a flashy player among wealthy investors, society types, trendy entrepreneurs and prominent politicians — including Gov. Charlie Crist.

Rothstein's fictitious financial empire crumbled over Halloween weekend when dozens of investors began clamoring for millions they had invested in his "confidential settlements'' of purported employment discrimination and sexual harassment cases. Rothstein, born into a working-class Bronx, N.Y., family, had fled to Morocco in a chartered jet with $16 million.

Last week, he wrote in a 12-page letter to the judge that he contemplated suicide but stopped himself because it "would just be one final act of selfishness."

"And for the first time in five years, I was completely honest about what I had done and who I was," Rothstein wrote Cohn. "From the moment that I decided to return home, knowing that I would never actually go home again, I have done everything in my power to right the terrible wrongs of my crimes."

The controversial issue of restitution to Rothstein's victims will not be resolved Wednesday, because authorities are still figuring out how much money there is to distribute, and who should get it.

Politically powerful lawyer Scott Rothstein gets 50 years in Ponzi fraud 06/09/10 [Last modified: Thursday, June 10, 2010 7:08am]
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