Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

As Ponzi scheme unraveled, Rothstein repaid millions

In the weeks before his $1.2 billion Ponzi scheme was revealed, lawyer Scott Rothstein repaid hundreds of millions of dollars to the investors he had swindled, according to records filed in bankruptcy court this week.

From August to October, Rothstein paid about $43 million to investment funds run by Fort Lauderdale financier George Levin — who soon became one of the first victims to complain to the FBI. Levin's investment funds are owed more than $778 million from Rothstein's defunct Fort Lauderdale law firm, Rothstein Rosenfeldt Adler.

Another $23 million was paid to the company of South Florida car dealer Ed Morse, whose family is claiming more than $115 million in losses to Rothstein, who was once its lawyer.

Rothstein also paid about $85 million to Miami investor Ira Sochet, who is still owed more than $147 million, records show.

A court-appointed trustee in the law firm's bankruptcy case said Rothstein Rosenfeldt Adler has about $43 million in assets — and debts totaling more than $1.4 billion.

Documents show that Rothstein used the law firm as his piggy bank, withdrawing massive sums for himself and doling out fat loans and payments to friends and relatives. He even paid salaries to his parents and wife.

Rothstein, 47, was arrested Dec. 1 on federal racketeering, money laundering and fraud charges. He has pleaded not guilty. Prosecutors say he bilked investors by selling them purported lawsuit settlements, then used the funds to repay earlier investors in a classic Ponzi scam.

The bankruptcy records show that Rothstein paid himself $13.4 million from his law firm's accounts between November 2008 and October, when he flew to Morocco as his scheme unraveled. Yet Rothstein never cashed $846,000 in paychecks from the firm.

Millions more were listed as being paid to Rothstein's partners, employees and business associates, the bankruptcy trustee says.

Rothstein's firm paid about $300 million to creditors in the 90 days before the bankruptcy case was filed in November, the records show. That timing is significant because those entities might be asked to return money.

But the records of the law firm — where the now-jailed Rothstein was said to manage the books — are in disarray.

Trustee Herbert Stettin said the information is based on the law firm's unaudited books and records and might be amended.

Court records also show more than $6 million the law firm gave to charities, including $2.5 million to Rothstein's own Rothstein Family Foundation. One of the largest donations was $1 million to the Florida Care Foundation.

Stettin is expected to seek return of the charitable donations.

Among the firm's assets, Stettin listed several bank accounts and items found in Rothstein's offices, including a pair of sneakers signed by basketball star Shaquille O'Neal, a knife signed by Louisiana Gov. Bobby Jindal and two handguns.

As Ponzi scheme unraveled, Rothstein repaid millions 12/23/09 [Last modified: Wednesday, December 23, 2009 10:12pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Rays DFA Danny Farquhar to make room for Brad Boxberger

    Blogs

    The Rays continued shuffling their bullpen, dumping RHP Danny Farquhar after Wednesday's game to make room for RHP Brad Boxberger to be activated off the DL.

    Farquhar, who worked an inning in Wednesday's 6-2 loss, had a 2-2, 4.11 record for 37 appearances, working primarily in lower leverage situations. In …

  2. USF to face Indiana in men's basketball next season

    College

    The USF men's basketball team will get an early test from a Big Ten powerhouse next season.

  3. Rays employee helps save suicidal woman near Pirates stadium

    Blogs

    A Rays front-office employee joined umpire John Tumpane in saving a woman threatening to jump from a bridge near PNC Park on Wednesday afternoon in Pittsburgh.

    Multimedia production manager Mike Weinman, 32 (left), was walking across the Roberto Clemente Bridge with boss Larry McCabe when he saw three men …

  4. Blake Snell struggles in return as Rays fall to Pirates

    The Heater

    PITTSBURGH

    Blake Snell talked a good game ahead of his return to the Rays rotation Wednesday night, but he didn't pitch one.

    The Pirates’ David Freese scores on a Blake Snell wild pitch during the first inning against the Rays.
  5. College World Series title puts Florida Gators in elite company

    College

    The Florida Gators put themselves in rare company with Tuesday night's College World Series national championship victory.

    Florida ace and Tampa native Alex Faedo (21) lets loose with his teammates after they win the Gators’ first baseball national title.