Temat: CIEKAWOSTKI Z RYNKU I GOSPODARKI
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Scott Rothstein, the flashy Fort Lauderdale attorney who authorities say ran a $1 billion investment scam while acting like a philanthropic tycoon, is expected to be arrested Tuesday on a federal racketeering charge, sources familiar with the case said.
Rothstein, who had fled to Morocco in late October but returned in early November, is expected to appear at a magistrate hearing to face the RICO conspiracy charge at the federal courthouse in Fort Lauderdale.
While under federal watch in November, Rothstein cooperated with prosecutors and provided them with details of his Ponzi scheme, involving the sale of fabricated legal settlements to wealthy investors.FBI and IRS agents also raided his Fort Lauderdale law office and seized his waterfront home and other assets.
Rothstein could not be reached for comment, and his attorney, Marc Nurik, declined to say anything about his client's imminent arrest.
``Scott intends to see that all legitimate investors get paid back,'' Nurik said late Monday. ``Exactly how that's going to be done remains to be seen. He is sincere in his intent.''
Rothstein, 47, is likely to plead guilty soon while he is in custody. The U.S. attorney's office, meanwhile, will convene a grand jury to consider criminal charges against Rothstein's alleged co-conspirators -- including possibly former employees of his now-defunct firm.
Prosecutors are using the Racketeer Influenced and Corrupt Organizations Act to charge Rothstein and possibly others. The conspiracy law was passed by Congress to battle the Mafia and others involved in criminal enterprises. Rothstein, who was disbarred last week by the Florida Supreme Court, is accused of mail, wire and bank fraud, along with money laundering. He faces at least 20 yearsin prison and forfeitureof tens of millions ofdollars in illegal profits.
Rothstein's life in the fast lane -- befriending high-profile figures from Gov. Charlie Crist to NFL Hall of Famer Dan Marino -- crashed spectacularly over the Halloween weekend, when his investors first suspected that the lawyer may have stolen hundreds of millions of dollars from them. The trail of wreckage is long -- including Holy Cross Hospital's returning a $1 million gift from Rothstein's charitable foundation.
Rothstein, a once obscure employment lawyer, opened his law firm with partner Stuart Rosenfeldt in 2002.
Over the span of six years, Rothstein's net worth soared from about $160,000 to tens of millions of dollars -- including opulent homes, a fleet of foreign sports cars, dazzling watches, a stake in the former Versace mansion in South Beach and a restaurant group called Bova, court records show.
With the wealth and philanthropy came well-oiled connections in all the right places. Rothstein was able to use his charisma and contacts in the Broward County society scene and business community to lure wealthy friends and patrons to invest with him.
Among them: George G. Levin, a wealthy Fort Lauderdale investor with Wall Street connections who thought Rothstein's confidential legal-settlement deals were a sure thing. Levin invested as much as $125 million of his own money -- and hundreds of millions more from other investors -- through his group of Banyon hedge funds.
As the fund's managing partner, Levin personally guaranteed initial investors an 18 percent return up-front to woo them -- and told them they could expect to make 30 percent or more on the legal-settlement payouts. In his pitch, Levin called it an ``ultra low-risk, high-yield'' investment strategy.
Levin became Rothstein's rocket-booster, taking his little-known investment business to dizzying heights -- though no one has accused Levin of conspiring with Rothstein to dupe investors.
Here's how authorities say Rothstein's scheme worked: Investors would make an up-front payment at a discount to a plaintiff in a lawsuit who was expecting a series of settlement payments from the defendant over months or years.
The investors would later receive the full settlement amount at a hefty profit.
But it was all a scam. Federal prosecutors said there were no plaintiffs, no defendants, no lawsuits.
In a 2008 prospectus for investors -- who were required to put up a minimum of $1 million each -- Levin said Rothstein was offering a slice of a ``largely untapped market'' in settlements in multimillion-dollar employment and sexual harassment lawsuits. Their value, Levin said, was in their secrecy, suggesting a defendant would pay a premium for a plaintiff's silence.
``Confidentiality standards must be ultra-high,'' Levin told investors in March 2008.
By that time, Levin and his partners had invested about $100 million in purported settlements with Rothstein. A year later, Levin said his fund had funneled $656 million to Rothstein, ostensibly to buy settlements worth $1.1 billion, records show.
The scale of the scheme continued to build. Over the summer, Levin's pitch lured another $100 million from other investors.
In October alone, $235 million washed through Rothstein's accounts at Toronto Dominion from various investors, according to Fort Lauderdale attorney William Scherer. Scherer sued Rothstein, TD Bank, Levin and others on behalf of various investment groups seeking to recover more than $100 million.
When Rothstein's scheme collapsed in late October, investors scrambled to reach the lawyer for answers, but he had left for Morocco. Frantic investors reached out to his law firm, seeking the whereabouts of overdue payments.
Many people, including Rothstein's law partners, speculated that he would not return to Fort Lauderdale. Rothstein had e-mailed a few, sayinghe was considering suicide.
But he did return -- Rothstein-style -- in a privately chartered Gulfstream jet.
za: Miami Herald