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Feds haul away lawyer Scott Rothstein's 'toys'

Like repo men, the feds grabbed Scott Rothstein's fire-engine red Ferrari Spider convertible with tan interior — right off a downtown Fort Lauderdale street.

Later Monday morning, the FBI and IRS agents took possession of the lawyer's $6.5 million Mediterranean-style home.

They also seized his white Bentley with blue convertible top parked in the driveway, along with a silver Rolls-Royce and a white Cadillac Escalade. Then they hauled away his power boats docked out back along a wide canal: a 33-foot Aquariva, 55-foot Sundancer and 87-foot Warren. One boat was apparently named for his wife: Princess Kimberly.

Rothstein, holed up in an undisclosed location under federal surveillance, was helpless as the agents seized his toys with the power of court-issued warrants. Federal authorities maintain Rothstein's personal possessions were bought with millions of dollars he allegedly scammed out of investors. While the feds seized his assets, Rothstein had lunch at the swanky Capital Grille in Fort Lauderdale, reported the Daily Pulp, a blog of the Broward Palm Beach New Times.

Restaurant staff asked him how he was doing.

"It's tough. It's tough," Rothstein said, while the bartender mixed him a martini. "I'm going to do the right thing, so, you know. Make sure when you see everybody, just tell them that I'm alive, I'm well and I'm doing the right thing."

Rothstein, 47, has not been charged with a crime. The U.S. attorney's office is crafting a massive fraud case against him and possibly others believed to have assisted him in his alleged Ponzi scheme. He returned from Morocco a week ago on a private chartered jet.

"I will not stop until every single penny is paid back," Rothstein told WSVN-Channel 7 News, standing with his attorney Marc Nurik. "A lot of people run from their mistakes. I'm not running."

Federal authorities obtained seizure warrants Sunday night signed by U.S. Magistrate Judge Lurana S. Snow to confiscate Rothstein's cars, homes, bank accounts and other assets, according to sources familiar with the criminal investigation.

One warrant, obtained by the Miami Herald, reads: "Warrant to seize personal property subject to civil forfeiture."

Authorities can obtain warrants to seize Rothstein's property — even before criminal charges are filed in federal court — because they have evidence to support that the lawyer acquired those assets with ill-gotten gains from his alleged investment scam, sources familiar with the case said.

The U.S. attorney's office is using the tool of a civil forfeiture action. Eventually, if Rothstein is indicted, prosecutors could transfer the inventory of his seized properties for criminal forfeiture.

Rothstein has been accused by investors of stealing hundreds of millions of dollars and by his law partners of wiping out their firm.

He is suspected of selling bogus employment discrimination settlements to investors expecting lucrative returns.

On Monday, attorney William Scherer filed a lawsuit on behalf of the D3 Capital Club, an investment group that claims Rothstein stole its $13.5 million investment and took it to Morocco. Scherer filed the suit against several corporations whose addresses share the same as Rothstein's Las Olas Boulevard firm.

The suit specifically names Debra Villegas, who worked as Rothstein's chief operating officer. She could not be reached for comment.

In April 2008, Debra Villegas moved into a Weston home that Rothstein bought for her for $475,000, records show.

Scherer also filed a motion to intervene on behalf of D3 Capital Club in a receivership appointed last week by a Broward County judge to examine the law firm's financial records and recover assets.

During a brief court hearing Monday, the receiver — Herbert Stettin — said that Toronto Dominion Bank, which kept accounts for Rothstein's investors at a Fort Lauderdale branch, is cooperating and providing access to financial records.

The bank reported that it will take about three weeks to finish the process of turning over records. "We have moved mountains this weekend," said Glenn Goldstein, an attorney for the bank.

In an interview afterward, Scherer asserted Toronto Dominion Bank knew that Rothstein's investment fund was a Ponzi scheme.

Investors were shown documents from the bank that certified there were millions of dollars in the accounts, Scherer said. But Toronto Dominion Bank shifted that money around, Scherer said.

Frank Spinosa, a TD regional bank vice president, met with multiple investors, Scherer said.

"It would have never happened but for a bank," Scherer said.

Spinosa's defense attorney Sam Rabin issued a statement saying his client "has been unfairly mentioned in connection with Scott Rothstein's crimes."

"He broke no laws," Rabin said. "We welcome any fair investigation in this matter because only one conclusion can be reached — Mr. Spinosa acted lawfully at all times. He was unaware of Mr. Rothstein's scam, he did not participate in it and he absolutely did not profit from it in any manner."

The bank also issued a statement.

"TD Bank has not acted unlawfully in regard to the Rothstein Rosenfeldt Adler accounts," said Rebecca S. Acevedo, a bank spokeswoman. "We can confirm that Frank Spinosa is on leave during our internal investigation. We have been cooperating fully with the investigating authorities, and the receiver since this inquiry began and will continue to do so."

Feds haul away lawyer Scott Rothstein's 'toys' 11/09/09 [Last modified: Monday, November 9, 2009 9:12pm]
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