Russell S. Adler, whose name was on the door at Rothstein Rosenfeldt Adler when the Fort Lauderdale law firm collapsed under the weight of a $1.2 billion Ponzi scheme, is losing his law license for 91 days.
Adler was sanctioned Thursday by the Florida Supreme Court for making misrepresentations to a cooperative apartment board in New York when money from Ponzi leader Scott Rothstein was used to purchase a unit in August 2009, months before the settlement financing fraud collapsed.
Adler told the co-op board he financed 90 percent of the purchase price when in fact he financed the entire purchase with loans from Rothstein and the law firm. Adler believed the board had a policy against sales when the purchase price was fully financed, the unsigned Supreme Court opinion said.
Also, Adler told the board and a real estate broker involved in the purchase that he had a 20 percent equity share in the law firm when he was not an equity partner.
Finally, the court said Adler as head of the firm’s tort litigation group did not properly execute client settlement statements.
The suspension was in line with what The Florida Bar recommended, but the referee, Palm Beach Circuit Judge Lucy Chernow Brown, suggested a 30-day suspension.
Brown cited as mitigating factors that Adler had no prior disciplinary record since he began practicing law in 1986, he fully cooperated with the disciplinary panel and he showed remorse.
“In reviewing a referee’s recommended discipline, this court’s scope of review is broader than that afforded to the referee’s findings of fact because ultimately it is our responsibility to order the appropriate sanction,” the court said.
The justices compared Adler’s case to that of a real estate lawyer punished in 1988 with a 90-day suspension for inflating the real price on townhouses to get mortgage loans. He explained the difference to lenders as down payments and misrepresented a check to make it appear the down payments were received.
“That case was decided in 1988. Since then, this court has moved towards stronger sanctions for attorney misconduct,” the court said.
The effective date of the suspension is Dec. 14. The month delay gives Adler time to wind down his solo practice in Delray Beach.
The apartment became a recovery target in the RRA bankruptcy when the trustee sued Adler for $1.2 million.
The clawback suit alleged Adler took loans—including $475,000 to buy the Manhattan apartment—and allegedly received excessive compensation from RRA.
Adler settled with the trustee in January 2011 for $350,000. He forfeited the apartment to the federal government in 2010 as part of the criminal forfeiture proceedings against Rothstein.
Adler was represented by Kevin Tynan of Richardson & Tynan in Tamarac and Fred Haddad of Fort Lauderdale.