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Lawyer Scott Rothstein's quick rise to life of a high roller ends even faster

If there was one thing Fort Lauderdale lawyer Scott Rothstein craved, it was attention. And how better to get it than to whip out his checkbook?

Like at Gov. Charlie Crist's 52nd birthday party/GOP fundraiser last year, when, instead of buying a $1,000 candle, Rothstein bought an entire chocolate cake covered with 52 candles. His donation: $52,000.

Like at an Eagles concert in January, when band leader Don Henley stood on stage and dedicated at Rothstein's request Life in the Fast Lane to the lawyer and his wife, Kimberly, for their first anniversary. His donation: $100,000, to a Henley environmental cause.

Like the TV ads showing Rothstein with star athletes Dan Marino and Alonzo Mourning, whose children's charities benefited from his philanthropic largesse.

"Scott wanted attention — he wanted to be the guy," said Roger Stone, a longtime Republican political operative who shared Rothstein's office suite. "Giving big checks and getting his butt kissed in public was the payoff."

But now, facing accusations of massive financial fraud, Rothstein is attracting attention of a different kind — and his life in the fast lane seems to have crashed spectacularly.

The FBI and the IRS are sifting through his computer files, and his Fort Lauderdale law firm is in shambles.

Over six years, Rothstein's net worth soared from at least $160,000 to tens of millions of dollars — including opulent waterfront homes, a fleet of foreign sports cars, flashy watches, a stake in the former Versace mansion in South Beach and a restaurant group, court records show.

Rothstein, 47, personally spent more than $14 million on a half-dozen properties in Broward County since June 2003, property records show. He also owned multimillion-dollar homes in Rhode Island and New York.

With the wealth and philanthropy came well-oiled connections in all the right places.

But the very people who trusted him — investors, law partners and clients — now accuse him of living large on their dime, running an investment scam that was a massive Ponzi scheme and wiping them out for what could be hundreds of millions of dollars.

"The mark of any good con man is the ability to get people to like them," said Steve Geller, a Broward County Commission candidate whose political committee received a $50,000 donation from Rothstein and now plans to return it. "The guy certainly spoke a great game."

Rothstein, who is cooperating with investigators, has not been criminally charged.

"I am sitting here smoking cigars with Marc," Rothstein said in a brief interview Sunday afternoon with the Miami Herald, referring to his attorney Marc Nurik. "Rumors of my demise have been greatly exaggerated. I'm doing pretty good."

Nurik said they had not been smoking cigars. "He is under a lot of pressure," Nurik said. "I don't want anybody to think he is having a good time."

Rothstein is under scrutiny for the alleged sale of employment discrimination settlements at a discount, through an investment tool known as "structured settlements."

He allegedly solicited investors to front reduced payouts to plaintiffs and then collect profitable returns when the settlements were paid off in full. But Rothstein is suspected of concocting lawsuits that investors thought were legitimate. Investors are now planning to sue him and his firm.

Only two years ago, the Florida Bar appointed Rothstein as vice chairman of a grievance committee that hears ethics and other complaints against attorneys.

It was a fast rise from modest beginnings for Rothstein, who grew up in the Bronx.

Rothstein moved to Florida in the late '70s, graduated from the University of Florida in 1984 and from Nova Southeastern University Law School four years later.

For years, he handled routine employment discrimination and other civil cases.

In 1993, Rothstein married Kimberly Hill, another attorney. By 2003, when she filed for divorce, Rothstein was barely prosperous, let alone affluent.

The couple owned about $206,000 in stocks and retirement plans, which they agreed to split in half, according to a marital settlement agreement.

Before the breakup, Rothstein had already gotten to know another lawyer in town: Stuart Rosenfeldt, his future law partner.

Rosenfeldt recruited Rothstein to join the firm he worked for in the late 1990s. Later Rothstein suggested they launch their own firm.

By 2007, the firm's growth was exploding. Rothstein Rosenfeldt Adler grew to 70 lawyers with offices in Fort Lauderdale, Boca Raton, Miami — plus a separate group of lawyers in Venezuela.

Partner Rosenfeldt maintains that he knew nothing about Rothstein's alleged scam, and that Rothstein had control of the firm's finances. A judge removed Rothstein as the firm's chief executive officer and appointed an independent receiver last week.

As his fortunes seemingly grew, the charismatic lawyer gave hundreds of thousands of dollars to the state Republican and Democratic parties and politicians — some of whom, including Crist, are now returning the donations.

Records show that since 1996, Rothstein and his law firm contributed at least $924,000 to 60 state candidates and state political committees and causes. He co-chaired fundraisers for President George W. Bush and several U.S. senators, including John McCain and Mel Martinez.

Though normally a big GOP donor, in the most recent campaign finance reporting period, Rothstein's law firm gave $200,000 to the Florida Democratic Party.

Some of Rothstein's investors became suspicious in late October when he failed to distribute the scheduled payments from their "structured settlements." They started contacting authorities.

Rothstein, it turned out, had flown to Morocco. He texted his law colleagues from there apologizing for "letting you all down,'' and said he was contemplating life in prison — or suicide.

"I am a fool," the message continued. "I thought I could fix it but got trapped by my ego and refusal to fail, and now all I have accomplished is hurting the people I love."

Rothstein did come back — in style — in a chartered private jet that arrived at Fort Lauderdale Executive Airport on Tuesday. He met with federal prosecutors and has been holed up in an undisclosed location since.

Dozens of FBI and IRS agents raided his office Wednesday, seizing 44 boxes of computer files and documents.

Miami Herald staff writers Douglas Hanks, Scott Hiaasen, Beth Reinhard, Jennifer Lebovich and Diana Moskovitz contributed to this report.

Lawyer Scott Rothstein's quick rise to life of a high roller ends even faster 11/08/09 [Last modified: Monday, November 9, 2009 12:13am]
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