FBI: Alleged investment scam could top $1 billion


MIAMI — The investment scam by Fort Lauderdale attorney
Scott Rothstein “could well exceed $1 billion,” making it one of the
biggest fraud cases in South Florida history, the head of the FBI in Miami said

Special Agent in Charge John Gillies declined to say whether
other people were involved with the lawyer’s Ponzi scheme, but said, “I do
not believe this was a one-man show.”

Gillies, speaking at a news conference, took the unusual
step of asking possible Rothstein victims to step forward.

The FBI and IRS are urging investors to call or e-mail with
information and verification of business dealings with Rothstein. Agents will
then pore over the information and respond first to the biggest victims — a
process that could take weeks, Gillies said.

Asked why the FBI had not yet arrested Rothstein, 47,
Gillies responded: “We are conducting this investigation in a timely
manner, but we will not be rushed. We will be thorough, and we are far from
over. … I’d like to let the public know this case is going to take

Adding to the delay: Agents also are investigating other
people in Rothstein’s inner circle who might have been involved, both in his
law practice and at a finance firm in the same Las Olas Boulevard building as
the Rothstein Rosenfeldt Adler law firm.

They include Rothstein’s legal and business advisor, David
Boden; the law firm’s chief financial officer, Irene Stay; the law firm’s chief
operating officer, Debra Villegas; and Rothstein’s uncle, Bill Brock, who went
with him on a trip to Morocco in late October when the investment scandal

Rothstein’s investors, law firm and law clients have accused
him of ripping them off by selling fabricated employment-discrimination
settlements. The IRS is looking at American and foreign bank accounts to
determine where Rothstein may have stashed the money he collected, and how it
was spent to support his lavish lifestyle.

Jordi Guso, a bankruptcy attorney for the law firm, said in
court Thursday that Rothstein Rosenfeldt Adler is heading toward bankruptcy as
early as Monday.

Rothstein’s lawyer, Marc Nurik, declined to discuss the
allegations against his client, who is staying at an undisclosed location.

“He is hanging out, had a little lunch with his
wife” Kimberly at Greek Islands Taverna in Oakland Park, Nurik said
Thursday. “This was the first time they went out together in public.”

Rothstein told WSVN-Fox 7 that he “made a very, very
serious mistake” and has pledged to pay back “every single
penny.” But he, too, suggested he did not work alone, saying his pledge
applied to “any legitimate person that’s owed money. I’m not talking about
the people that participated; I’m not talking about the people that knew what
was going on.”


Alan Sakowitz, a Broward, Fla., attorney who met with
Rothstein for an investment sales pitch in August, said the lawyer came to the
meeting with Richard Pearson of R.L. Pearson and Associates. The company, which
is involved in finance and development, shares the law firm building.

A Pearson associate, Nabil Rhazi, was also present. Rhazi
had made arrangements for the initial connection. “They identified
themselves as the exclusive agent for Rothstein,” Sakowitz said.

Boden was also present, he said.

Pearson, Rhazi and Boden did not return phone calls seeking

Other information about the diversion of missing funds also
suggests that Rothstein was not acting alone.

Two days after he left the country for Morocco on Oct. 27,
his law firm received a $1.4 million wire transfer from two clients of
attorneys in the firm’s Venezuelan office, according to court records.

Yet a few days later Rothstein’s partner, Stuart Rosenfeldt,
reported in court that the law firm only had $500,000 in its operating account.

“It took more than Rothstein alone” to divert the
money, said John Genovese, an attorney who filed papers seeking to force the
law firm into bankruptcy.

Also Thursday, a new group of investors emerged claiming
they were scammed by Rothstein: the Levy family, owners of Sunrise, Fla.-based
Renato Watches, a designer watch company.

Attorney William Salim, who represents the family, including
Ovadia and Rachel Levy, said in court that they lost about $15 million to $20

Rothstein also bought into the watch company as a minority
shareholder last year, said Daniel Mink, CEO of Renato Watches and
brother-in-law of Ovadia Levy.

“We were friends of his in the community,” Mink
said. “A lot of people were investing with him. It seemed very legitimate.
… Our family is definitely a victim.”

In court papers filed Monday allowing agents to seize his
Fort Lauderdale waterfront home and other properties, prosecutors accused
Rothstein of concocting the fraudulent investment scheme, including falsifying
legal settlements and bank records to dupe investors, starting in 2005.

Via McClatchy-Tribune News Service.