Steven M. Lippman said he was an honest, hard-working attorney focused on his family — until he met Scott Rothstein.
“He had this way of making wrong sound right,” Lippman said in federal court on Friday before he was sentenced to three years in prison for helping his boss with criminal deception.
As a partner at dysfunctional Fort Lauderdale law firm Rothstein Rosenfeldt Adler, Lippman pulled in a $1.3 million salary in 2008. He drove a 2009 Maserati worth $134,000. But it came at a price to the risk-averse commercial litigator.
Rothstein got him to assist in a check-kiting scheme using the account at his previous firm to inflate RRA account balances, funnel $96,000 in illegal campaign contributions to former Republican presidential candidate John McCain and cheat on his taxes.
In the end, prosecutors said it all added up to Lippman helping Rothstein pursue his $1.2 billion Ponzi scheme.
Lippman is the highest-profile law firm employee to be sent to prison. U.S. District Judge James I. Cohn also ordered him to pay $179,000 in restitution and a $15,000 fine. He is to surrender to authorities Nov. 14.
Rothstein is serving a 50-year prison term. Twelve others have been charged with various crimes associated with Rothstein’s scam. Most recently, his wife, Kim, and four others were charged with conspiring to hide $1 million in jewelry purchased with money from the settlement financing fraud.
Many of Lippman’s relatives, friends and clients who filled the Fort Lauderdale federal courtroom to capacity wept after the sentence was announced. Prosecutors asked for a sentence within the advisory guidelines of 41 to 51 months. Defense attorney Bruce Zimet asked for a sentence of 18 months.
“Yes, he played me like a fool, but at the end of the day I could have said ‘no,’ ” Lippman told Cohn.
Lippman was disbarred after pleading guilty.
“I am 50 years old, and I am starting from square one,” Lippman said.
Assistant U.S. Attorney Lawrence LaVecchio said Lippman was too savvy not to see through Rothstein’s Svengali act.
“There was a reason he did these things. He did them because he was making a lot of money and wanted to keep the gravy flowing,” LaVecchio told the court.
People who spoke in court on Lippman’s behalf portrayed him as the partner who brought in business to the labor and employment firm and who grew the commercial litigation practice from four to 16 lawyers.
When it came to Rothstein’s political fundraisers and parties, Lippman would make an appearance and head home, refusing to buy into his boss’ “rock star lifestyle” like some of his colleagues, those who testified on his behalf said.
Coral Gables attorney Joe Klock described his friend as a quiet man who doesn’t challenge others. “I don’t think he was ready for prime time,” he said.
Lippman had been working for Rothstein for four months when he approached him in 2005 about investing in a real estate deal offering a $10,000 return in four months on a $50,000 investment, Zimet said. He doesn’t know if the investment really existed, but said Rothstein would return Lippman’s money only by paying a contractor who worked on Lippman’s home.
That money, as well as money paid to Lippman for expenses, was never reported to the Internal Revenue Service as required.
Rothstein approached Lippman about using Lippman’s old firm’s bank account to keep a “nest egg” for RRA’s bonuses and expenses. What resulted was a series of checks and payments that allowed Rothstein to float checks to investors and creditors, Zimet said.
LaVecchio said the nest egg account helped fuel the Ponzi scheme by buying Rothstein time when he needed it.
When it came to campaign contributions, Rothstein told Lippman it was his turn to pony up. Zimet said it was to further Rothstein’s goal of becoming McCain’s point man in Broward County and a fundraising co-chair.
McCain returned all of Rothstein’s contributions after the fraud and law firm collapsed in 2009.
Lippman ended up revising his tax returns, which was tantamount to a confession. Cohn acknowledged this act by imposing a sentence slightly below the guidelines.
Lippman will ask for a future sentence reduction based on his cooperation with prosecutors.
When asked who his client would testify against, Zimet said Lippman was willing to tell prosecutors “everything he knows, honestly and straightforward, and we will let the chips fall where they fall.”
Zimet told Cohen that other partners at the firm have not come forward like his client to admit wrongdoing.
“They are playing the waiting game,” he said.
But the judge said there had to be message of deterrence that “white-collar crime is serious and that it comes with a price.”