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June 7, 2010

Another notable Ponzi schemer up for federal sentencing this week

As detailed in this local article from Florida, which is headlined "Rothstein’s abuse of legal system looms large in sentencing," another big federal sentencing of another big Ponzi schemer is on tap for this week. Here are the basics:

He ran the largest fraud in Florida history, laundered money and lied to clients, colleagues and investors. But, when it comes to sentencing Scott Rothstein for his crimes, legal experts agree that his biggest problem is his gross abuse of the legal system. The 47-year-old Ponzi schemer is facing up to 100 years in prison.

There are mitigating factors: Rothstein’s help in bringing down alleged mobsters will be noted, experts say. But, any benefit provided by his cooperation may be outweighed by the inescapable fact that he spent years undermining the state and federal justice system.

“The same judicial system that he desecrated will now pass judgment on him,” said Charles Intriago, a former prosecutor who founded the Association of Certified Anti-Money Laundering Specialists. “If I was a federal prosecutor, I’d be saying those things on behalf of the United States of America.”

The pinnacle of Rothstein’s abuse of the legal system came when he forged the signatures of two federal judges while trying to fleece one of his best-known clients, Ed Morse of the Ed Morse Automotive Group, which has dealerships throughout Florida, including Broward and Palm Beach counties, and in Mobile County, Ala.

Rothstein has already pleaded guilty and will appear before U.S. District Judge James Cohn on June 9 to learn his fate. He was charged with five criminal counts, including wire fraud, mail fraud, racketeering and money laundering. Speculating about his sentence has become a popular guessing game in legal and business circles....

Still, federal sentencing guidelines for financial fraud are driven by the amount of loss. The $1.2 billion take for Rothstein’s Ponzi scheme will set the bar high....

Rothstein pleaded guilty to using his law firm as a front for his Ponzi scheme and to selling interests in phony lawsuit settlements. He has admitted to fabricating plaintiff and defendant names for the bogus settlements, and also admitted to funneling illegal money through his firm’s attorneys for political donations.

In this post over at his Souther District of Florida Blog, David Oscar Markus has lots of coverage of the up-coming Rothstein sentencing (including this link to Rothstein's sentencing memo).  Attorney Markus adds these comments:

Scott Rothstein asks Judge Cohn for 30 years, and I'm a bit surprised.  I thought he'd ask for less. The PSI calls for life (a level 52), but the statutory maximum is 100 years.  Rothstein will be 48 the day after his sentencing this week.

June 7, 2010 at 08:27 AM | Permalink

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