Disbarred Lawyer, Ponzi Scheme, and Fictitious Clients

Scott Rothstein, a disbarred south Florida lawyer, was arrested on Dec. 1 for involvement in an alleged $1 billion ponzi scheme.

• Rothstein allegedly convinced investors to make high-interest loans to fictitious clients and buy discount settlement agreements with the promise of being repaid in full.  
• The funds were allegedly used to pay off old loans, to make personal investments and amass personal assets, and to buy favorable treatment from the police. 
• The federal government will have first pick at seizing his assets if he is convicted on the mail fraud, wire fraud, and money laundering charges.
• Now, “[b]illionaire money manager and convicted sex offender Jeffrey Epstein has filed suit against Rothstein, claiming that the disbarred lawyer touted a fictitious $200 million sexual harassment settlement that Epstein was willing to pay as a guise to lure investors into his Ponzi scheme.”

Brian Baxter, Billionaire Slaps Rothstein with Suit, Am Law Daily, Dec. 8, 2009; see also David Grant, Top 5 things to know about Scott Rothstein, Christian Science Monitor, Dec. 1, 2009.

Special thanks to David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.