Scott Rothstein's journey ended in a small federal courtroom Wednesday: from workaday employment lawyer to a power broker who rubbed elbows with politicians and celebrities to convicted felon.
From a law firm leader who sported $3,000 suits and signed generous checks to political candidates and charities to disbarment and a possible 100-year prison sentence wearing only prison garb for perpetrating a $1.2 billion Ponzi scheme built on nonexistent legal settlements.
"Rothstein has definitely carved a special place for himself. He is always going to be mentioned with the great scalawags of Florida history," said Robert Jarvis, a law professor at the Nova Southeastern University's Shepard Broad Law Center.
There was standing-room only in the small federal courtroom of U.S. District Judge James Cohn as the former chairman of the 70-lawyer Rothstein Rosenfeldt Adler took responsibility for crimes that came as a shock to millionaire friends and trusting charities.
As his wife and family looked on, a shackled Rothstein admitted committing five felonies, including racketeering conspiracy, money laundering conspiracy, fraud conspiracy and two counts of wire fraud.
The plea change was anti-climatic. Prosecutors did not read their allegations against Rothstein, and his only involvement was to acknowledge he understood his legal rights and the plea agreement.
The U.S. Attorney's Office later filed a proffer stating Rothstein used money collected by fraud to ingratiate himself with politicians and police as well as to prop up his law firm to propel the scheme forward.
"Ponzi scheme funds were also used to provide gratuities to high-ranking members of police agencies in order to curry favor with such police personnel and to deflect law enforcement scrutiny of RRA," prosecutors wrote.
Rothstein, 47, faces up to 100 years in prison at sentencing set for May 6. Prosecutors agreed not to push for a life sentence if the sentencing guidelines end up there, leaving Cohn with complete discretion to sentence someone who quickly became a public embarassment. Rothstein potentially could reduce his time behind bars by cooperating with prosecutors and naming others involved in the fraud.
He also may get credit for voluntarily returning from Morocco after fleeing the country when investors started complaining about missed payments and allowing investigators to seize his property without protest.
He waived any right to property seized by federal agents as they tracked down several homes, 16 luxury vehicles and sports cars, hundreds of pieces of jewelry, $271,160 cash that happened to be at the Rothsteins' primary residence when agents showed up, $80,000 in American Express gift cards and 20 bank accounts including one at Switzerland's Schwyzer Kantonalbank.
Assistant U.S. Attorney Alison Lehr told Cohn that she hopes to provide money from forfeited property to victims of the fraud as restitution, noting the government is concerned about civil suits seeking recovery.
"My concern here is with the innocent victims whose money is being held up," Cohn said.
Conrad & Scherer attorney William Scherer of Fort Lauderdale, who is suing on behalf of victims, said he welcomed Lehr's overture and was sure Rothstein was cooperating with authorities.
"His life depends on it," Scherer said. "He has every reason in the world to cooperate fully."
While Rothstein had little to say at his plea hearing, his wife, Kim, was defiant in making a statement to reporters outside court afterward.
"Today is the saddest day of my life," she said. "Two years ago, when I married the sweetest man I'd ever met, I would never have believed our future together would come to this."
Kim Rothstein said she had committed no crime, but the court of public opinion has decided otherwise, with unjust slurs unsupported by fact. She said she is committed to "connecting all the dots" and going on with her life.
"I'm not being investigated. I have been charged with no crime, and the evidence to date clearly shows that I was neither involved in nor had knowledge of Scott's business activities," she said.
She was flanked by her Miami attorney Frank Rubino, a bodyguard and family members. As she was escorted to a waiting Cadillac Escalade, one of her bodyguards tussled with a reporter.
Acting U.S. Attorney Jeffrey Sloman said the Rothstein plea will begin the process of bringing closure to the Ponzi scheme, but he gave no time table when others in the conspiracy might be charged or if Rothstein is cooperating.
Federal authorities have said they are investigating employees and others who may have known of the scam rooted in phony investments in employment and sexual harassment lawsuit settlements.
Sloman said he had never seen authorities move on a Ponzi scheme of this magnitude in such a short time -- about two months.
Rothstein Rosenfeldt Adler once blanketed Broward County in glossy advertisements. Now it's in ruins in Bankruptcy Court.
Rumors that Rothstein lived beyond his means and his law firm could not support his philanthropy and political contributions ran rampant in 2009. Even after he fled South Florida, reports of investors losses topped out at only about $200 million. But it was much worse than anybody thought.
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