Scott Rothstein, the flashy Fort Lauderdale attorney who authorities say ran a $1 billion investment scam while acting like a philanthropic tycoon, was arrested by FBI agents early Tuesday on a federal racketeering charge.

Rothstein, who had fled to Morocco in late October but returned in early November, is set to appear at 11 a.m. before U.S. Magistrate Judge Robin Rosenbaum to face the RICO conspiracy charge at the federal courthouse in Fort Lauderdale.

He was processed by the U.S. Marshals around 8:30 a.m. in Fort Lauderdale.

While under federal watch in November, Rothstein cooperated with prosecutors and provided them with details of his Ponzi scheme, involving the sale of fabricated legal settlements to wealthy investors. FBI and IRS agents also raided his Fort Lauderdale law office and seized his waterfront home and other assets.

Stuart Rosenfeldt, co-owner of Rothstein’s law firm, said Tuesday morning he was relieved to hear that his former law partner and friend had been arrested.

“I’m just relieved,” he said. “It’s bothered me that he did such bad things and appeared to be free.”

Rothstein could not be reached for comment on Monday, and his attorney, Marc Nurik, declined to say anything about his client’s imminent arrest.

“Scott intends to see that all legitimate investors get paid back,” Nurik said late Monday. “Exactly how that’s going to be done remains to be seen. He is sincere in his intent.”

Rothstein, 47, is likely to plead guilty soon while he is in custody. The U.S. attorney’s office, meanwhile, will convene a grand jury to consider criminal charges against Rothstein’s alleged co-conspirators — possibly including former employees of his now-defunct firm.

Prosecutors are using the Racketeer Influenced and Corrupt Organizations Act to charge Rothstein and possibly others. The conspiracy law was passed by Congress to battle the Mafia and others involved in criminal enterprises. Rothstein, who was disbarred last week by the Florida Supreme Court, is accused of mail, wire and bank fraud, along with money laundering. He faces at least 20 years in prison and forfeiture of tens of millions of dollars in illegal profits if convicted.

(Source: Miami Herald)