Federal prosecutors say it’s all well and good that convicted Ponzi schemer Scott Rothstein has pleaded guilty and helped them unravel his massive fraud — but he should still go to prison for 40 years.
Prosecutors point not only to the vast scale of the disbarred Fort Lauderdale lawyer’s scam — selling $1.2 billion in phony legal settlements, leading to $430 million in investor losses — but also reject Rothstein’s “misguided” argument that he deserves no more than 30 years in light of similar financial-fraud cases around the country.
Assistant U.S. Attorney Lawrence LaVecchio cited other notorious jailed Ponzi perpetrators — including Bernard Madoff ($50 billion scheme, 150 years’ imprisonment) in a footnote — to dramatize the need for a “more severe sentence” than sought by Rothstein at his hearing in Fort Lauderdale federal court Wednesday.
LaVecchio stressed that in Rothstein’s 12-page letter to the sentencing judge, filed Friday, he acknowledged that his criminal behavior has had a “severe impact on this community.”
“He has brought shame on the legal profession,” the prosecutor said in a sentencing memo filed Monday. “He has caused the collapse of a [70-attorney] law firm . . . His actions have adversely affected legitimate charitable organizations . . . In perpetrating his scheme, he even had the audacity to forge the signatures of three different members of the federal judiciary on bogus court orders.”
On Wednesday, U.S. District Judge James Cohn will have the final say over Rothstein’s time behind bars. Cohn could give the 47-year-old mastermind of South Florida’s biggest investment fraud up to 100 years as the maximum punishment for pleading guilty to racketeering conspiracy and four related charges.
The court’s probation office, which advises the judge, calculated that his offenses call for a “life” sentence.
Rothstein’s lawyer, Marc Nurik, cited the fraud case of a prominent New York lawyer to bolster his argument for a 30-year prison term.
Last year, Marc Dreier, convicted of running an elaborate scheme that bilked hedge funds and other investors of $700 million, was sentenced to 20 years by a judge who rejected the government’s request for a 145-year sentence.
In comparing Dreier to Madoff, the New York judge referred to the lawyer’s victims, who lost about $400 million, as well as hundreds of employees who lost their jobs when his law firm collapsed.
“Mr. Dreier is not going to get much sympathy from this court,” U.S. District Judge Judge Jed Rakoff said, “but he is not Mr. Madoff from any analysis, and that’s why I can’t understand why the government is asking for 145 years.”
In Rothstein’s case, his attorney noted that his client voluntarily returned to South Florida from Morocco, where he had fled with $16 million and contemplated taking his life as his massive Ponzi scheme imploded last fall.
He returned to “‘face the music,’ plead guilty and immediately hand over to the government, in effect, a ‘play by play’ description of all of the intricate details of his crimes, as well as the crimes of others. . . ” Nurik wrote to the judge.
Prosecutors already have charged the former chief operating officer of Rothstein’s defunct firm, Rothstein Rosenfeldt Adler, with money-laundering conspiracy, and are expected to indict other ex-colleagues this summer.
“Mr. Rothstein fully acknowledges that the shame, humiliation, public disgrace and scorn that he and his family has and continues to suffer is of his own doing and, therefore, does not expect any sympathy from this court in fashioning its sentence,” Nurik wrote in a sentencing memo.
“Instead, he simply requests a sentence that is rational, not reflective of the media-induced hysteria and is proportionate to sentences received in comparable cases.”
(Source: Miami Herald)
Join the official YWN WhatsApp status
One Response
Rothstein wants a sentence that is rational, though his actions were anything but rational. Is this like the kid who murdered his parents and then begs the court’s mercy because he’s an orphan?