Former office of Rothstein Rosenfeldt Adler (Melanie Bell)
Irene Shannon, a member of con artist Scott Rothstein’s inner sanctum, was charged Wednesday with helping her crooked boss run a $1.2 billion Ponzi scheme as chief financial officer and top bookkeeper at his Fort Lauderdale law firm.
Shannon, who was known by her maiden name Stay when she worked at Rothstein Rosenfeldt Adler, was charged by criminal information with money-laundering and bank fraud conspiracy. When federal prosecutors charge defendants by information, it usually indicates a plea agreement will follow. The charge carries a maximum five-year prison sentence.
Shannon’s illegal acts resulted in money laundering and check kiting, prosecutors say, even though she is not charged with those individual counts.
“Irene looks forward to resolving this matter and moving on with her life,” said Shannon’s Miami attorney Brian Tannenbaum. He said Shannon will most likely make her first appearance in federal court next week in Fort Lauderdale.
From 2005 to 2009, Shannon helped Rothstein manage 38 bank accounts at TD Bank’s Weston branch and Gibraltar Private Bank & Trust in Coral Gables, according to the information.
“As chief financial officer of RRA, Shannon knew hundreds of millions of dollars of investor funds were not being held in trust accounts and that the funds were being disbursed to further Rothstein’s fraudulent scheme,” said U.S. Attorney Wifredo Ferrer in a release announcing the charge against Shannon.
The Ponzi scheme was cloaked in a lawsuit settlement financing business run by the law firm. Prosecutors charged Shannon helped transfer millions of dollars obtained from new investors to pay older ones.
The scheme imploded over Halloween weekend in 2009. Rothstein fled the country only to come back and implicate numerous others in an effort to cut his prison time. His wife, Kim Rothstein, is serving 18 months in prison for selling jewelry bought with money from the Ponzi.
Shannon, at Rothstein’s direction, transferred funds to pay operating expenses of RRA, purchase houses, luxury items, as well as to cover overdrafts through check kiting, prosecutors wrote
Shannon, according to the information, also helped Rothstein distribute lavish gifts, such as cars, boats, jewelry and bonuses, to lawyers and other RRA employees “to engender goodwill and loyalty and create the appearance of a successful law firm.”
Behind closed doors
Rothstein, as chairman of the labor and employment firm, operated behind closed doors accessible only to people with a private code. Shannon was one of those RRA staff members who reportedly worked side-by-side with Rothstein.
Rothstein worked in a suite at the opulent RRA office that was soundproof, had a private elevator and was accessible only through a code. Stay worked next to Rothstein’s office along with the firm’s COO, Debra Villegas.
Like Shannon, Villegas worked her way up in the firm. She is serving a 10-year prison sentence for helping Rothstein forge judges’ signatures on bogus court settlement documents. Her husband, Tony Villegas, awaits trial for the murder of RRA attorney and Villegas’ best friend, Melissa Britt Lewis.
Charity and real estate
Rothstein is serving a 50-year federal prison sentence. There have been now been 18 others charged with crimes associated with Rothstein or his wife, Kim. Sources say prosecutors are currently mulling over charges against more RRA lawyers, bank executives, police officers, even judges as the statute of limitations runs out later this year.
“Once again, the information filed today reaffirms that Rothstein’s massive fraud could not have been the work of one person,” Ferrer said.
Shannon also facilitated Rothstein when he made the large charitable contributions to help deflect suspicions about RRA. She also was the o purchased expensive real estate and personal property to “convince potential investors of the legitimacy of RRA and purported investment opportunities,” the information states.
George L. Piro, Special Agent in Charge, FBI Miami, Rothstein needed a trusted agent who knew how to shuffle money.
Shannon “floated innumerable checks in an effort to make it all look legitimate. It wasn’t and now she will be held accountable,” he said.