News & Events
Feds probe prominent Broward attorney Scott Rothstein
BY AMY SHERMAN AND JAY WEAVER
asherman@MiamiHerald.com
On Monday, Scott Rothstein's law firm filed a case in Broward Circuit Court seeking an emergency appointment of a receiver and seeking dissolution of the firm.
Federal authorities on Monday were conducting a criminal investigation into the law firm run by prominent Fort Lauderdale attorney Scott Rothstein.
Rothstein, who is suspected of financial wrongdoing, hired a lawyer this weekend from his own firm, and his law firm has also retained a high-powered lawyer.
Rothstein "has declined to resign despite the asserted and substantial irregularities because he purports to hold a 50 percent share of the law firm,'' states a complaint filed in Broward Circuit Court Monday by Kendall Coffey, former U.S. attorney in Miami, who was hired to represent the Rothstein Rosenfeldt Adler firm in Fort Lauderdale.
The complaint seeks an emergency appointment of a receiver and dissolution of the firm.
The complaint states, "It is with surprise and sorrow that the attorneys of Rothstein Rosenfeldt Adler, P.A., have learned that Scott W. Rothstein, the managing partner and CEO of the firm, has, according to assertions of certain investors, allegedly orchestrated a substantial misappropriation of funds from investor trust accounts that made use of the law firm's name.''
The case will be heard at 4 p.m. before Judge Jeffrey Streitfeld.
Rothstein's partner, Stuart Rosenfeldt, is seeking immediate judicial action to facilitate the investigation of investor funds.
The firm was founded by Rosenfeldt and Rothstein in 2002 and currently employs more than 70 lawyers.
The complaint also states that a review of the firm's records undertaken this past weekend showed various funds that were controlled by Rothstein could not be accounted for. "Some investors allege that defendant Rothstein may have been fabricating nonexistent structured legal settlements for sale to investors,'' the claim states.
Rothstein's actions were done without any knowledge of any other attorneys at the firm. "And, in fact, Rothstein actively endeavored to hide the existence of the scheme,'' the claim says. Rosenfeldt and other lawyers only learned about the allegations several days ago, they said.
Broward Chief Judge Vic Tobin sent an e-mail at 6:45 a.m. to judges about the Rothstein case.
`'I learned of some very distressing news yesterday. . . ,'' Tobin wrote. "Whoever draws the case try to set the motion today because of the amount of clients and money involved. Also, if you have a case with the firm, please be patient. I don't know if the lawyers will come or not and if they do come, there is no money at this point to go forward with the case or pay firm employees.''
Tobin also write that there may be "multiple filings of receivership motions'' and that creditors may also file a motion.
News crews were outside the law firm's Las Olas Boulevard office in Fort Lauderdale Monday. They were not allowed access to the firm's office. No one was answering the phone at the firm.
Also Monday, Fort Lauderdale Police Chief Frank Adderley suspended the round-the-clock security detail at Rothstein's Fort Lauderdale home. Rothstein hired off duty police officers in April -- at a charge of $45 an hour -- to guard his home 24 hours a day, police spokesman Sgt. Frank Sousa said.
Sources told The Miami Herald that the allegations relate to an investigation into financial matters with a company Rothstein was involved in.
The allegations involve "structured settlements'' in multiple cases that involve lending money against settlements.
Banyan, a Fort Lauderdale investment group run by George Levin, had an attorney contact the U.S. attorney over the weekend regarding "suspicious activity'' involving Rothstein, said Jesse Derris, a Banyan spokesman.
Rothstein could not be reached for comment on his cellphone or by e-mail Sunday. Charles Jones, a spokesman hired to represent the firm Monday, said that the law firm is open for business.
"Everything is running as normal, employees are handling client issues,'' he said.
Marc Nurik said he stepped down as a lawyer from the firm in recent days at Rothstein's request to represent Rothstein individually.
Nurik would not elaborate on the nature of the allegations Sunday, but said that rumors that Rothstein had fled town are false.
"He is out of town, but he is returning early this week and plans to address all of the issues that have been raised,'' Nurik said.
Rothstein has become a major political player in recent years, giving tens of thousands of dollars to candidates.
He made headline-grabbing moves such as hiring high-profile figures, including former Broward Sheriff Ken Jenne after Jenne's release from prison last year.
In the most recent campaign finance reporting period, Rothstein's law firm gave the largest single individual contribution -- $200,000 -- to the state's Democratic Party, The Herald reported last month.
Though Rothstein himself has been a key donor to the GOP -- backing everyone from Broward Sheriff Al Lamberti to Gov. Charlie Crist in his U.S. Senate bid -- he also supports Democrat Alex Sink in her campaign for governor.
Rothstein had also drawn much attention for vastly expanding his business interests amid the recession.
He recently bought a stake in the Versace mansion on Ocean Drive in Miami Beach and planned on converting the 20,000-square-foot mansion using a concept modeled after the Bova Ristorante chain.
Rothstein is a partner in that chain with Tony Bova, The Miami Herald recently reported.
Bova gave about $150,000 to an ad campaign that attacked Lamberti's Democratic opponent during the 2008 Broward sheriff's primary.
Rothstein has chaired numerous fundraisers for candidates including President George Bush, former U.S. Sen. Mel Martinez, U.S. Sen. John McCain and Crist.
"He remains a close friend and advisor to the Governor, currently serving on the Governor's Chairman's Counsel, a group of 25 highly respected business people in Florida handpicked by the Governor and the Chair of the Republican Party of Florida,'' states the law firm's website.
Rothstein's law firm has several big-name clients including Bank of America Leasing, Citibank and Wells Fargo companies. The firm has multiple offices in South Florida as well as offices in Tallahassee, New York and Caracas.
Last year, he bought a $6.4 million home in Fort Lauderdale, property records show.
Rothstein has sat on numerous community boards and been a "major contributor'' to several charities, according to his website, including the Dan Marino Foundation, the Boys and Girls Clubs and Downtown Jewish Center Chabad.
Miami Herald staff writers Marc Caputo, Jay Weaver and Walter Michot contributed to this article.