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How Scott Rothstein rode $1.2 billion Ponzi scheme to wealth and power

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The attorney who appeared in the courtroom Wednesday was not the jovial, well-tailored host who partied with national politicians, sports stars, and south Florida power brokers. He shuffled into the courtroom, dressed in tan prison garb and wearing leg irons and handcuffs. When the judge asked him to raise his right hand to swear an oath to tell the truth, Rothstein had to raise both hands since they were shackled.

Ponzi scheme of fake legal settlements

Three months ago, Rothstein fled the US for Morocco in late October after wiring $16 million dollars overseas. Federal agents were closing in on his scam, and there were suggestions he might commit suicide. But he returned to south Florida soon after.

A month after he returned, he was arrested. Federal agents seized as much of his assets and property as they could locate. These included the cars, waterfront homes, an 87-foot yacht, 304 pieces of jewelry, bank accounts, and equity stakes in a long list of companies, including local restaurants. Agents even seized Rothstein’s American Express rewards points: 20,920,701 of them.

Federal agents are estimated to have found assets valued at about $100 million. That’s a long way from $1.2 billion.

“The rest of the money is in the Ponzi scheme,” said William Scherer, a local lawyer who has filed a lawsuit to recover money for Rothstein’s victims. “And he probably spent a large amount – living large and all that.”

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