Authorities have seized the assets of a well-known Florida lawyer, after he was accused of running a Ponzi scheme believed to have defrauded investors of hundreds of millions of dollars.Although
Authorities have seized the assets of a well-known Florida lawyer, after he was accused of running a Ponzi scheme believed to have defrauded investors of hundreds of millions of dollars.
Although criminal charges have yet to be laid, authorities swooped this week to seize assets belonging attorney Scott Rothstein, 47, including eight luxury properties, boats, sports cars and bank accounts, believed to be worth over US$18 million.
It is alleged Rothstein, from the firm Rothstein Rosenfeldt Adler, encouraged investors to make up-front payments to people who were due to receive significant financial settlements from employment, harassment and discrimination-related cases, with the investors able to collect the full settlement amount at a later date, while making 20 percent profit on their original investment.
However, prosecutors have claimed no such settlement agreements had ever existed and the entire investment scheme was a fraud, according to court documents tendered this week, and believe many of Rothsteins assets, including a US$6.45 million home, an 87-foot yacht and a fire engine red Ferrari, were bought with proceeds from the fraud.
Alarm bells started ringing for investors in October this year when their scheduled payments failed to appear, and a fortnight ago they alerted US authorities.
Rothstein, well known in Florida society as a significant political donor and philanthropist, apparently sent text messages to colleagues apologising for his conduct and for letting them down while on a recent trip to Morocco, according The Miami Herald.
He later chartered a private jet to return to the US and face FBI investigators, telling a local Miami television that he had made a very serious mistake and planned to make amends, according to a Reuters report.
However, upon his return Rothstein told journalists at The Miami Herald: Rumours of my demise have been greatly exaggerated. Im doing pretty good I am sitting here smoking cigars.
Rothsteins lawyer later repudiated the cigar smoking claim, saying: He is under a lot of pressure I dont want anybody to think he is having a good time.
Partners at the firm have denied having any knowledge of the scheme, which is believed to have been in operation since 2005, and the firm has recently been placed in receivership.
The scheme comes after American financier Bernard Madoff was sentenced to the maximum penalty of 150 years in prison in June this year for masterminding a $50 billion Ponzi scheme, in which a significant number of Floridian investors lost their savings.