Snitching ain't easy

That's especially true when you're Scott Rothstein.  For some reason, the feds thought that he shouldn't be required to testify in an upcoming trial.  From Paula McMahon:

Christina Kitterman, one of the lawyers who formerly worked for Rothstein at his Las Olas Boulevard law firm, was charged in August with lying to some of Rothstein's investors to help keep his fraud afloat.
On Friday, a federal judge granted a request from Kitterman's defense attorney, Valentin Rodriguez, to force Rothstein to testify – as a defense witness – in her trial, which is tentatively scheduled for Jan. 6 in federal court in West Palm Beach.
"[Kitterman's] request to compel the production of Scott Rothstein at trial is granted," Senior U.S. District Judge Daniel T.K. Hurley wrote in his order.
But the judge also ruled that Kitterman will have to pay the full cost of moving Rothstein from wherever he is being held, the cost of providing security for him, his prison lodging in South Florida, and the tab for sending him back when he's done.
That happened because prosecutors seemingly were not planning to call Rothstein on their side of the case, a position they did not explain in their court filings.
"The [U.S.] Marshals Service requires a minimum of ten days' notice in order to produce the witness, and that the defendant must bear the cost, in advance, of the transportation, housing and security attendant to the witness' production," Assistant U.S. Attorney Lawrence LaVecchio wrote in court records.
The location where Rothstein is serving his punishment has remained top secret because prosecutors and prison officials think he could be in danger because of his cooperation against people with ties to organized crime. Though Rothstein gave a series of depositions under tight security in the federal courthouse in Miami in late 2011 and 2012, the public and reporters were forbidden from attending. Official transcripts were released later.

Yours truly was also quoted along with some other lawyers:

"The government can't just hide an exculpatory witness and ask for exorbitant amounts of money to produce her accuser so she can confront him in court," said Richard Rosenbaum, a Fort Lauderdale defense attorney who is not involved in the case.
Rosenbaum said he heard from attorneys representing other defendants accused by Rothstein that it would cost an estimated $20,000 to bring Rothstein to testify in South Florida. The U.S. Marshals Service did not immediately reply to a request for comment.
Though Rothstein's allegations are documented on a transcript, Rosenbaum said Kitterman's defense can't "cross-examine the transcript."
Recent revelations in court that Rothstein was helping his soon-to-be ex-wife Kim hide and sell more than $1 million worth of jewelry – after Scott Rothstein was supposedly cooperating and coming clean with prosecutors – have inflicted further damage on Rothstein's trustworthiness as a witness and could make him helpful to the defense, Rosenbaum said.
"It shoots his credibility to pieces," Rosenbaum said of the violation of Rothstein's agreement with prosecutors to tell the truth and confess all of his crimes. "It's also great fodder for the defense when they have Scott on the witness stand … because there he is basically double-timing the prosecution."
David Oscar Markus, a criminal trial and appellate lawyer based in Miami, agreed.
"Rule No.1 of criminal law is 'never trust a rat.' When you're talking about Scott Rothstein, the rat of all rats, Rule 1 is gospel. The feds should know better, but they generally ignore Rule No. 1," Markus said.

Did Scott Rothstein snitch on his wife? (UPDATED)

That's the theory Charles Lichtman floats in this Herald article about the case:

Charles Lichtman, a Fort Lauderdale attorney for the bankruptcy trustee, said he suspects Scott Rothstein told prosecutors about his wife’s alleged obstruction plot rather than go along with it. The reason: Rothstein is hoping to reduce his 50-year prison sentence by continuing to cooperate with authorities.
“My belief is that Scott came clean on his own accord,” Lichtman said. “In the five weeks of depositions I have sat through with him, we have yet to find an instance where he was untruthful.” 

If that's true, then I have an even lower opinion (if that's possible) of Scott Rothstein than I did before.  Ratting on your own wife?!  Despicable.  

UPDATE -- John Pacenti drills down on the snitching angle:

Berger Singerman partner Charles Lichtman, who represents the bankruptcy trustee for Rothstein's defunct law firm, indicated the ex-lawyer cooperated in the investigation.
"I have reason to believe he responded truthfully to whatever questions he was asked about the circumstances," Lichtman said. "It never made sense to me that there was so much missing jewelry."
The new federal charges filed in two cases don't detail how the missing jewelry was uncovered but give plenty of hints.
"I got to believe there's a good chance Scott Rothstein ratted Kim out because Scott is grasping at straws to get out of prison," said Fort Lauderdale public relations executive Chuck Malkus, who has written a book The Ultimate Ponzi: The Scott Rothstein Story due out in February.
Malkus said he got a tip Kim Rothstein was in a jewelry store in downtown Fort Lauderdale with several high-end watches. When they met, Malkus said Kim Rothstein told him, "I can't go anywhere these days. I can't even get batteries for my watches."

In more pleasant news, my friends have opened up their own law practice: Gelber, Schachter and Greenberg.  Julie Kay covers it here:

Schachter and Greenberg said they decided to leave Stearns Weaver not out of dissatisfaction but out of a desire to start their own law firm.
"We always had an interest in starting our own firm and practice law in a lean, close-knit environment," said Greenberg, son of former Miami-Dade County Attorney Murray Greenberg and brother of Assistant U.S. Attorney Ben Greenberg.
Schachter said, "It was a tough decision, but it's been incredibly gratifying to take control of our careers."

It couldn't have been an easy decision as Stearns Weaver is one of the best places in Miami to work.  I wish them well.

Read more here: http://www.miamiherald.com/2012/09/06/v-fullstory/2987970/scott-rothsteins-wife-others-charged.html#storylink=cpy

Kim Rothstein charged with money laundering, obstruction, and witness tampering.

It's an information, so she's already got a plea agreement in place. From the USAO press release:

Earlier today, an Indictment was filed charging Marin and Daoud on charges of obstruction of justice and perjury. Also today, a Criminal Information was filed charging Kimberly Rothstein, Stacie Weisman and Scott F. Saidel with conspiracy to commit money laundering, to obstruct justice, and to tamper with a witness.

According to the charging documents, former Ft. Lauderdale attorney Scott W. Rothstein, who was the Chief Executive Officer and Chairman of the law firm of Rothstein, Rosenfeldt and Adler, P.A. (RRA), used the funds obtained from the operation of a Ponzi scheme to purchase tens of millions of dollars of real estate, vehicles, vessels, business interests, luxury watches, jewelry and sports memorabilia for himself, his wife, Kimberly Rothstein, and others. As part of his plea agreement, Scott W. Rothstein agreed to forfeit to the government all assets acquired with funds derived through the aforesaid Ponzi scheme. On November 9, 2009, agents of the Internal Revenue Service, Criminal Investigations, went to the Rothstein residence, where Kimberly Rothstein assisted the agents in retrieving what was believed to be all of the available cash, jewelry and luxury watches which had previously been purchased by Scott W. Rothstein with proceeds derived from the Ponzi scheme. In fact, before, during and after the aforesaid seizure by federal agents on November 9, 2009, Kimberly Rothstein, Stacie Weisman, and Scott F. Saidel knowingly took action to conceal certain items of jewelry, valued in excess of one million dollars for the purpose of preventing the government from exercising its authority to take such property into its lawful custody and control. Thereafter, Kimberly Rothstein and Stacie Weisman sold and attempted to sell a portion of this jewelry to and through various persons, including Eddy Marin and Patrick Daoud.

The charging documents further allege that, in connection with civil proceedings instituted by the Trustee in bankruptcy for RRA, all of the defendants took steps to obstruct justice by concealing the true location of certain items of jewelry in order to prevent its availability for use in those proceedings. It is further alleged that Marin and Daoud committed perjury during depositions in connection with those proceedings, and that Kimberly Rothstein, Stacie Weisman and Scott F. Saidel sought to have Scott W. Rothstein testify falsely in connection with those proceedings.

UPDATE--

Kim Rothstein has issued her own press release through her lawyer David Tucker:

In response to the Information filed against Kimberly Rothstein, please be advised that Kim welcomes the opportunity to put a very challenging time in her life behind her.
Kim would like to take the opportunity to express her disappointment, shame, and sadness in regard to all of the victims of her husband, Scott Rothstein’s, actions related to the Ponzi scheme for which he has previously been sentenced. She had no involvement or knowledge of his fraudulent activity.
She takes full responsibility for her actions in regard to the charge filed today.
Kim is a vibrant, diverse, and deeply caring person who looks forward to being a productive citizen in the years to come.
This is a very difficult time in her life and we ask that the media be sensitive to her privacy in this matter. Any inquiries should be directed to her attorneys below.

SCOTUSblog for sale (UPDATED with Kim Rothstein's sentence)

I wonder how much it will go for. We can ask co-founder Amy Howe at tomorrow's federal bar luncheon.  Here's the AP:

The blog got a huge boost in credibility when it hired veteran reporter Lyle Denniston, who began covering the Supreme Court during the Eisenhower administration. Goldstein attracted a deep-pocketed sponsor in Bloomberg Law, the legal research unit of Bloomberg LP, and says he now spends $500,000 a year on the blog. The relationship with Bloomberg is in its third and final year, Goldstein said.
Next year, Goldstein said he intends to sell SCOTUSblog. To that end, he wants a formal press credential for Denniston, whose pass is courtesy of a Boston public radio station for which he works only rarely, and maybe even Howe.
The formal recognition he seeks is part of a series of moves aimed at making SCOTUSblog more attractive to prospective buyers. "We put more effort into covering the Supreme Court than any other organization in American history," Goldstein says, including in his claim even specialty legal publications like the American Lawyer.
The court, though, has remained noncommittal about how to treat SCOTUSblog. Court spokeswoman Kathy Arberg said she is reviewing the credentialing process for the first time in nearly 40 years. "We won't act on any pending requests until we have completed that process," Arberg said.

I'm also putting this blog for sale if anyone is interested... We'll start the bidding at $1 million.



In other news, Kim Rothstein is to be sentenced today.  I really don't see how sending her to jail does anyone any good.  Probation is sufficient here.  The Sun-Sentinel has background on her sentencing memo by David Tucker:

Just days before Kim Rothstein will be sentenced for hiding expensive jewelry from federal authorities, the former socialite has filed for divorce from her imprisoned Ponzi schemer husband, court records show.
"Last week, Kim filed for divorce from Scott Rothstein," her attorneys wrote in a sentencing memo filed Friday in federal court in Fort Lauderdale.
Her husband physically and mentally abused her, openly cheated on her, controlled her every move and kept her in the dark about his crimes, her defense team said.
When she confronted him, she said, he yelled at her: "You can't walk away from me, Kimmy. I'm the President of [expletive] Florida and I'll say when you can come and go!"
Kim Rothstein and her friend Stacie Weisman are to be sentenced Tuesday afternoon. Both women admitted they tried to hide about $1 million worth of jewelry from federal authorities after Scott Rothstein admitted he ran the biggest investment fraud scheme in South Florida history.
It was her husband's idea to hide the jewelry from prosecutors and bankruptcy authorites who were seizing the couple's ill-gotten assets, Kim Rothstein's defense attorneys say, but she takes full responsibility for doing it. The couple communicated through coded letters about their plan while Scott Rothstein was held at a secret location before he was imprisoned, the lawyers wrote in court records.
"Kim is fully responsible for her behavior. However, it was her husband, Scott Rothstein who originally requested that she take some family heirlooms, watches and other items of value as insurance," her lawyers, David Tucker and David Kotler, wrote in court records. "Scott also recommended that Kim turn these items over to someone whom she trusted to sell them."
Kim Rothstein claims that through their coded letters, her husband supervised the sale of the assets they were trying to hide from authorities and also her attempts to get the loot back so she could "come clean" with authorities after realizing how much legal trouble she was in.

UPDATE -- Judge Rosenbaum sentenced Kim Rothstein to 18 months in prison. 

It's 50 years...

...for Scott Rothstein.

More to follow.

Update #1 -- From the Sun-Sentinel article:

In the courtroom, Rothstein appeared visibly and dramatically changed by his six months in federal custody, much thinner with closely shorn gray hair and a goatee -- almost unrecognizable from the outsize personality he once was.He was wearing dark pants and an off-white dress shirt, and he was shackled at the waist and ankles. A humble Rothstein addressed the judge and the packed gallery, apologizing for all the harm he caused."I am truly and deeply sorry for what I have done. I don't expect your forgiveness. I don't," Rothstein said. "I am ashamed and embarrassed."

Update #2 -- More from Bob Norman, who was there. The post is excellent and worth a read. Here's a lengthy excerpt:

Rothstein looked like he'd lost a good 30 pounds. His hair was grayer still and he wore a goattee. He actually looked tanned and healthy in a long-sleeve white button-up shirt, dark pants, white socks, black sneakers and the chains shackling him.
His wife, Kim, sat in the second row behind him, and wept when Rothstein entered the courtroom. She sat next with her friend, Stacy Weissman at her left, and Scott's father Harvey at her right. Next to Harvey was Scott's sister, Ronni, and next to her was mother Gay. Also in the row was Kim's attorney, Scott Saidel, who sat next to Weissman.
Cohn opened the proceedings by asking if any of Rothstein's victims were present in the courtroom who wanted to speak. In the back row, a black woman stood up and said she'd like to speak. It was Shirley Blades, the mother (I think) of Charles Blades, from the Blades football family.
In what was a bit of a dramatic moment, she was led up to the podium and Cohn let her speak even though she was there to show Rothstein moral support. She simply turned to Rothstein, with tears streaming down her face, and said, "My brother, may God bless you. May God bless you."
That prompted Gay, Ronni, and Kim all to start crying. Blades was followed by Steven Bitton, a Plantation man who was a client of Rothstein's. He said that he was offered a settlement in a lawsuit with the City of Plantation that Rothstein simply never told him about (outside the courtroom he said the offer was for $650,000 and that the city was now claiming was no longer on the table and that the statute of limitations had passed). "I went to see him every month for four years," said Bitton. "... You trust your attorney. You put your faith in him. ... It's not just the investors [who were hurt]."
Then Nurik took the stage and spoke for over an hour on behalf of Rothstein. He started by asking Cohn to focus on "the rule of law, not the rule of mob, not the influence of the media, not the frenzy."
He asked Cohn to sentence Rothstein for "who he is, not for how he's been demonized." He said Rothstein, who turns 48 tomorrow, had lived 43 years as a "caring, loving person" before he turned to a like of crime.
Nurik also said that nobody would come to speak on his behalf -- expect Blades, whom he said was a surprise even to him -- for "fear of vilification ... and demonization" by the media and community.
Cohn asked Nurik why he thought Rothstein "engendered so much public attention."
"Mr. Rothstein lived larger than life," Nurik answered. "Mr. Rothstein was very brash, very vocal ... his face was plastered on every society page ... he was everywhere, doing everything."
Nurik continued that there was a lot "schadenfreude" in this case -- joy in the demise of another -- and that law firms and lawyers in town were "quite frankly jealous ... a lot of lawyers wondered how [RRA] could grows so fast."
"Isn't his lifestyle part of the manner in which the crimes were committed?" asked Cohn.
Nurik said it was "to some degree," specifically in terms of the political contributions and "certain things in town" (I assume he was talking about charity events) that he did to gain "access to certain people."

***

Then, finally, Cohn spoke. And man did he speak. He waxed poetic about Rothstein's case, saying it was "all about image, wealth, power, and influence" and that Rothstein rivaled "Madison Avenue" in the way he marketed himself.
"[Rothstein's] political connections stretch from the sheriff's office on one end of Broward Boulevard all the way to the Fort Lauderdale Police Department on the other end of Broward Boulevard to the governor's mansion in Tallahassee ... and down Pennsylvania Avenue to the White House," Cohn said.
Cohn mentioned the society pages, the political contributions "funneled through Rothstein's attorneys and their wives," his attending sporting events "with BSO brass," all designed to create an "appearance of legitimacy but we now know was all a facade, a fraud.
"This was a This Ponzi scheme was not the result of a poor buisness decision. Quite the contrary, it was fraud at its inception ... causing 400 investors to love $400 million ... many people have been swept up in the tsunami that followed." Cohn not suprisingly said that he believed Nurik's comparison to the Dreier case was "unpersuasive" saying that there could be "no conduct more reviled" thatn Rothstein's forging of court orders.
"The court must take a step back and ask what makes the Rothstein case different," Cohn said. "Why has this case created such a media frenzy? ... I think the primary reason is that Mr. Rothstein infiltrated so many spheres of our daily life ... politics, sports, charities, the society pages, the legal profession, billboards. Mr. Rothstein was seemingly omnipotent. He was everywhere. He was not only everywhere, but everywhere with excess."
Just before he handed down the 50-year sentence (followed by three years of supervised release), Cohn said he felt that "public perception" was important.
While his mother wept, Rothstein didn't give a visible reaction. When Cohn was finished, he was led out of the courtroom through a side door. He didn't look back.

Should the Kitterman defense have called Scott Rothstein?

That's the question that John Pacenti asks in today's DBR:

West Palm Beach attorney Valentin Rodriguez looked exhausted after verbally sparring with Scott Rothstein.
The disbarred law firm chairman and the mastermind of Florida's largest Ponzi scheme was called as a defense witness for Rodriguez's client, Boca Raton attorney Christina Kitterman.
"Scott Rothstein is not going to win this battle," Rodriguez said defiantly outside the West Palm Beach federal courthouse after the first day of Rothstein's testimony Wednesday. "But he can absolutely pick up on what you are trying to do."
Rothstein's well-documented arrogance made its inevitable appearance during questioning by Rodriguez, a polite-almost-to-a-fault attorney with a knack for quietly getting under the skin of witnesses.
...West Palm Beach attorney Peter Feldman, Rodriguez's co-counsel in Kitterman's case, said, "We knew the risk of calling him as he is unpredictable. I think that risk was outweighed by the jury being able to see him—live and in color—conducting his rock-star lifestyle."
Rodriguez called Rothstein over prosecution objections, bringing one of South Florida's most notorious figures into the public eye for the first time in four years in the first criminal trial centered on his $1.2 billion Ponzi scheme.

So, I will put the question to you to decide:

Should the defense have called Scott Rothstein to the stand in the Kitterman trial? (multiple answers allowed)
	No, it's just way too risky
	No, it's better to point the finger at the prosecutor for not calling him
	No, it was just a publicity stunt by the defense
	Yes, you can dirty up the government by calling him
	Yes, you need to take such risks as the defense
	Yes, it will make for a nice comparison when Kitterman testifies
pollcode.com free polls

Scott Rothstein to be arrested tomorrow (Tuesday) -- NUMEROUS UPDATES BELOW

The Herald broke the story here:

Scott Rothstein, the flashy Fort Lauderdale attorney who authorities say ran a $1 billion investment scam while acting like a philanthropic tycoon, is expected to be arrested Tuesday on a federal racketeering charge, sources familiar with the case said.
Rothstein, who had fled to Morocco in late October but returned in early November, is expected to appear at a magistrate hearing to face the RICO conspiracy charge at the federal courthouse 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.
Rothstein could not be reached for comment, 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 -- including possibly former employees of his now-defunct firm.

Scott is still talking, this time to the Sun-Sentinel:

Rothstein called Monday, after I sent a text asking if he was about to turn himself into federal authorities, a rumor that was making the rounds."No, I'm not surrendering," he said. "I'm sitting here in the hotel with my attorney (Marc Nurik) and it's a very strange scenario."First we're fielding calls from people asking if we're in protective custody. No, I'm not in protective custody. Now we're getting calls if I'm about to surrender...So I guess you guys are giving me a heads up that I'm about to be arrested."

***

Said [Mark] Nurik: "Nobody's telling us that they're picking him up, and nobody's giving us any right to surrender...He's sitting here with me, talking about the case. He's mostly freaking out about being arrested."

So, he'll obviously be detained with no bond. But should he be?

UPDATE 9:30am Tuesday -- Rothstein has been arrested early Tuesday morning and he wasn't permitted to surrender. He will make his initial appearance this morning in Ft. Lauderdale before Judge Robin Rosenbaum.

SECOND UPDATE -- No bond... Stipulation to detention...

THIRD UPDATE -- Rothstein was charged by way of infomation, which means he is definitely cooperating. Still strange to me that they simply wouldn't indict him. Here's the information, which has been assigned to Judge James Cohn.

How much time will Rothstein get?

We asked that question in our poll here. Most readers are saying that he will get between 40 and 50 years.

The Sun-Sentinel has followed suit in its own poll. Other lawyers have weighed in this article. Here are the results of their poll as I write this post:

Poll: How much time should he get?
Convicted Ponzi schemer Scott Rothstein will be sentenced Wednesday, June 9, in federal court. His lawyer has made a case for Rothstein to serve no more than 30 years. The prosecution has asked that the former high-flying Fort Lauderdale lawyer get 40 years in prison.

What do you think? How much time should Scott Rothstein serve?

10 years or fewer. He didn't have any real victims. (66 responses)
8%

30 years. His lawyer made a good argument. (84 responses)
11%

40 years. The prosecution made a good argument. (216 responses)
27%

100 years or more. He should not see the light of day. (344 responses)
43%

Any prison time would be too good for him. He should be waterboarded and flogged for the rest of his life. (83 responses)
10%

793 total responses
(Results not scientific)

My view of this is that it doesn't much matter because the big sentencing date will be the day Judge Cohn hears the Rule 35 motion, the motion to reduce Scott Rothstein's sentence. True, whatever Rothstein gets tomorrow will be the starting point for the reduction, but at the end of the day, the amount of cooperation credit will drive this sentence. Judge Cohn knows that he will have the discretion to sentence Rothstein to an appropriate sentence after the cooperation motion comes, so I expect a pretty high sentence tomorrow. That said, 30 years is a lot of time, and as I've said before, I'm surprised that Nurik didn't ask for less.

Kim Rothstein vs. Justice Sonia Sotomayor

Kim Rothstein pleaded guilty yesterday while Justice Sonia Sotomayor spoke at the University of Miami campus.  Who got more press in South Florida?  Sadly, Rothstein by a ton.  From Jon Burtstein's story:

Five years ago this week, she was a bride who had just gotten married at South Beach's Versace Mansion to a rich, charismatic attorney who had Fort Lauderdale abuzz.

Three years ago, she was in seclusion after watching her husband, Scott Rothstein, go before a federal judge to plead guilty to the largest financial fraud in South Florida history.

On Friday, Kim Rothstein was back at the federal courthouse in Fort Lauderdale. This time, it was to admit that she too is a criminal.

Rothstein, 38, pleaded guilty to a plot to hide more than $1 million in jewelry from federal authorities as they were seizing her husband's assets to reimburse victims of his swindle. She admitted conspiring with her then-attorney and a friend to secretly sell the jewels, including a 12-carat diamond ring, and to persuade her imprisoned husband to lie under oath about the ring's whereabouts.

She faces up to five years in prison when sentenced April 19 by U.S. District Judge Robin S. Rosenbaum.

Dressed in a dark pantsuit, Rothstein answered Rosenbaum's questions in a clear, steady voice as she pleaded guilty to a felony charge of conspiracy to commit money laundering, obstruct justice and tamper with a witness.

"Are you pleading guilty because you are in fact guilty?" Rosenbaum asked.

"Yes, your honor," Rothstein responded.

She left the courthouse flanked by her defense attorneys, David Tucker and David Kotler. She did not acknowledge the reporters and cameramen outside as she got into a sports utility vehicle waiting for her.

From the Herald story on the Supreme Court Justice visit:

From her days as a young girl in the Bronx being raised by her mother after the death of her father to becoming the first Hispanic on the highest judicial body in the country, U.S. Supreme Court Justice Sonia Sotomayor told the story of her journey before a captivated audience at the University of Miami on Friday night.


Sotomayor spoke with University of Miami President Donna E. Shalala at the BankUnited Center to University of Miami students, Coral Gables residents and perhaps a future Supreme Court justice about the inspiration behind her recently published memoir My Beloved World.

“Love and passion, that is the only way you do something well,” Sotomayor said. “Do a few things, but do them well.”

Sotomayor, 58, spoke of the many things that inspired her to share her story with the world, one of which was in responses to questions she hadn’t expected during her confirmation process, such as how children cope when a parent dies, especially if they don’t have a mother like hers.

“I began to understand that I couldn’t talk to every child in the country,” Sotomayor said. “I could give them the answers in a book.”

Rothstein Rothstein Rothstein!

Everyone was a buzz yesterday over Scott Rothstein testifying before Judge Hurley in West Palm Beach.  Paula McMahon covered it well.  Here are some highlights:

• With a white goatee and closely cut hair that was grayer than the last time he was seen publicly some three-and-a-half years ago, Rothstein, 51, took the witness stand handcuffed and shackled, wearing a bright blue, collared T-shirt and jeans.
  Rothstein — who was subpoenaed by defense attorney Valentin Rodriguez Jr. to testify in the wire fraud trial of Christina Kitterman, a former attorney who worked at the Rothstein Rosenfeldt Adler law firm — appeared in court much earlier than expected because of security concerns.

• Additionally, Rothstein testified he had a sexual relationship with Kitterman.
  “We were two friends who fooled around from time to time, Rothstein testified, alleging Kitterman “pulled me into a bathroom stall to make out with me” at Runway 84 in Fort Lauderdale.
  “We were friends, there's no polite way to say this — we were friends with benefits,” he said. “I loved her and cared about her and I believe she loved and cared about me.”
  “I am NOT happy about being here,” Rothstein said, saying he wished he didn't have to testify about someone he cares about.
• “What ended up happening ... My ego and, at that particular time, my desire for power and money and some of my partners' desire for power and money” led to Rothstein starting his fraud to try to keep his failing law firm afloat, he testified.
  “We grew before we should have grown,” Rothstein told the jury. “I refused to fail and I let this Ponzi scheme explode.”
  “At that time, I had an ego that was out of control,” he continued.
  
• “My wife was indicted for things that she did and also things that I told her to do.”
  He said he told her, during a phone conversation after he briefly fled to Morocco in late 2009, to hide some expensive watches from the government.
  “At a later point in time, before the government took everything, I had had conversations with her [Kim] about making certain that we did not end up on the street ... I didn't tell her what to take, other than the watches.”
• Was Rothstein upset about the length of the sentence imposed by Cohn, Kitterman's lawyer Valentin Rodriguez Jr. asked.
  “That would be an understatement, yes sir,” Rothstein replied.
  Prosecutors filed a court document on June 8, 2011, saying Rothstein should qualify for a sentence reduction for his cooperation. The final decision would lie with Cohn.
  No further action has been taken on the request, Rothstein said, because his cooperation is not complete yet.
  
  
• A second hitch, he testified, is: “I understand there's been an issue pertaining to my failure to tell” the truth to federal authorities about the fact he knew and was involved in Kim Rothstein's efforts to criminally hide some of their assets.
  He still hopes he will get a sentence reduction because he hopes prosecutors and the judge will accept he only lied about hiding jewelry with his wife Kim and that it was a mistake he made under duress, he said.
  He said he hopes prosecutors and the judge will eventually grant him a sentence reduction and agree “that I don't deserve to die in prison for what I've done.”

Kitterman strikes back

She testified in her own defense yesterday, taking on Scott Rothstein.  From the DBR:

Kitterman testified when she joined the Rothstein Rosenfeldt Adler law firm in 2003, she immediately had to ward off Rothstein's sexual advances. She said he threatened to fire her numerous times and called her names like "idiot." Rothstein also had a knack for showing up at the same public place as Kitterman, such as restaurants."Mr. Rothstein had a temper. He was one of those people who had two sides," Kitterman said. "He was a very scary person, but he could be a very kind."Kitterman faces three counts of wire fraud conspiracy. Closing statements before Senior U.S. District Judge Daniel T.K. Hurley in West Palm Beach were expected Tuesday.Rothstein's mistreatment of women in his firm has been a key component to Kitterman's defense. The 12-member jury has 11 women on it.Kitterman said she never thought about filing a sexual harassment complaint against Rothstein with the Equal Employment Opportunity Commission."I was a new lawyer," she said. "I was scared. I just couldn't do something like that."Kitterman testified Rothstein's harassment of her ended when she went to the firm's only other equity partner, Stuart Rosenfeldt, in 2006 and asked to be reassigned so she didn't work directly with the firm's chairman.

The Sun-Sentinel also covers the case and Judge Hurley's ruling to allow the prosecution to cross Kitterman regarding her recovery from addiction:

But federal prosecutor Paul Schwartz's cross-examination cut directly to what prosecutors say was one of many motives Kitterman had to commit crimes at Rothstein's behest.
"You were addicted to alcohol and cocaine," Schwartz said to Kitterman.
Kitterman acknowledged she is a recovering addict and said that after "partying" on Aug. 7, 2007, she realized she had hit rock bottom and called her mother for help. Her mother called Rothstein, and he helped them find a four-week rehab program called "Challenges," Kitterman said.
When she returned to work a month later, Rothstein agreed to pay her salary for the time she had been absent, she said.
And when she told Rothstein that there was negative talk going around about her stint in rehab, Rothstein dispatched an email to the entire firm telling anyone who judged her poorly to resign by the next day.
Every year after that, she said, she thanked him on the anniversary of her gaining sobriety.
Prosecutors read aloud from an August 2009 email she sent Rothstein — just four months after the conference call and two months before the law firm imploded.
In it, she thanked him for his "friendship, love and support" and wrote that "words cannot express" the debt of gratitude she and her family owed to him.
Kitterman testified that she has remained clean and sober to this day. She said she is proud of her continued sobriety but embarrassed that she was in rehab and didn't raise the issue herself in court because she did not think it was relevant.
Senior U.S. District Judge Daniel T. K. Hurley told jurors he was allowing them to hear about Kitterman's drug and alcohol abuse because prosecutors believe it shows some of the reasons they say she was willing to commit crimes for Rothstein.

Will be interesting to see what the jury does.

Shocker -- feds now say Scott Rothstein was lying

Shocker -- Feds now say Scott Rothstein was lying! You don't say!

From the Herald:

Convicted South Florida Ponzi schemer Scott Rothstein, a disbarred attorney who ran a $1.2 billion investment scheme out of his Fort Lauderdale law firm, will not be receiving a reduction in his 50-year prison sentence because he lied to federal prosecutors, authorities said Tuesday.

Prosecutors withdrew their pending motion to reduce Rothstein's sentence based on his cooperation in the sprawling racketeering investigation because he was “untruthful in an affidavit” filed with the federal court. Rothstein, who helped the U.S. attorney's office gain convictions of almost 30 defendants, was hoping to see many years cut from his sentence for his assistance.

That reward won't happen.

“In the judgment of the United States, the defendant provided false material information to the government and violated the terms of his plea agreement,” Assistant U.S. Attorney Lawrence LaVecchio wrote in a motion to withdraw an earlier request for a sentence reduction with U.S. District Judge James Cohn. “Therefore, in the exercise of its sole discretion, the government moves to withdraw the previously filed motion.”

Rogue snitches

It should come as no surprise that snitches sometimes go rogue. And today, John Pacenti has an article saying that Scott Rothstein may have gone on a frolic and detour:

Scott Rothstein started out in Plantation as an employment lawyer representing police officers in internal affairs investigations and disputes with the department.

Facing arrest in a $1.2 billion Ponzi scheme, Rothstein again turned to his former Plantation police clients — only this time as potential targets for an FBI sting, according to court documents and defense lawyers in a $16 million mortgage fraud case.

"It was great speaking with you. I think I can help you with your problem," Rothstein said on accused ringleader Joseph Guaracino's voice mail. "Maybe we can hook up for a little Monday Night Football tonight for a little while. Catch a martini, smoke a cigar and catch up on shit."

Defense attorneys want to talk to Rothstein about his weeks spent as a confidential informant in November 2009 shortly before his arrest. They say federal prosecutors have told them the disgraced law firm chairman didn't have authority to contact his former clients or target seven current and former law enforcement officers charged in the mortgage fraud case last June.

But Miami criminal defense attorneys Michael D. Walsh and Jordan Lewin — who represent Guaracino and his brother, Dennis, respectively — say only Rothstein can confirm whether he went rogue while working as an FBI informant.

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.

Here's his sentencing memo (by Mark Nurik):

Rothstein Sentencing Memo Rothstein himself wrote a 12-page letter to Judge Cohn, asking for leniency, "[b]ut I do not feel sorry for myself nor do I want anyone's sympathy. I deserve and expect the punishment I will receive. What I am deeply and sincerely sorry for is the horrific pain and harm I have inflicted on so many people."

There were also some letters filed on his behalf, one by his parents, but missing was one from his wife Kim Rothstein.

So here you go readers:

What will Judge Cohn sentence Scott Rothstein to this week?
	30 years
	35-40 years
	40-50 years
	100 years, the stat max
pollcode.com free polls

Tick Tock

The statute is about to run on the Scott Rothstein case.  And a big indictment came out today against Former regional vice president of TD Bank Frank Spinosa, who is represented by Sam Rabin. Judge Bloom got the case. The new judges have all the fun...

From the Sun-Sentinel article:

Spinosa, 53, was released on $250,000 bond after a brief appearance in federal court. He was placed on house arrest with electronic monitoring and is scheduled for arraignment on Oct. 24, court records show.

His lawyer, Samuel Rabin, said Spinosa will plead not guilty and plans to go to trial on the allegations.

"He's innocent and he wants his day in court," Rabin said.

Spinosa has known for years that he was under criminal investigation and had offered to surrender if the government filed charges against him, Rabin said. He called the arrest at Spinosa's home "totally unnecessary" and "one of those typical Rothstein case flourishes."

The grand jury indictment, unsealed Friday morning, charges Spinosa with one count of wire fraud conspiracy and five counts of wire fraud. Each charge carries a maximum punishment of 20 years in federal prison and hefty fines.

Spinosa is accused of facilitating Rothstein's fraud by giving investors a "false sense of security" and inducing them to invest hundreds of millions of dollars with Rothstein by lying about how much money was in Rothstein's bank accounts and who could withdraw it.

Spinosa signed off on fraudulent so-called "lock letters" that led Rothstein's investors to believe that money in some of Rothstein's bank accounts was being held only for them, according to the charges.

Prosecutors also say Spinosa lied and used a script containing "talking points" prepared by Rothstein when he met with some investors and participated in conference calls with others to help reassure them their investments were safe.

Rothstein's fraud involved fooling investors into thinking they were making huge profits by investing in confidential legal settlements. He told investors they were making a lot of money by fronting smaller lump sums to plaintiffs who had won settlements or judgments and wanted quick access to cash. The investors would supposedly reap huge profits by later collecting the full amount of the settlements.

Rothstein later admitted it was all a lie and he used the money to pay for what he liked to call his "rock star lifestyle." Cash from new investors was used to pay out "profits" to older investors and keep the fraud alive.

"While defendant Spinosa and Rothstein did not discuss the fraudulent nature of the confidential settlements, they did agree to the preparation of the false and fraudulent 'lock letters' and the making of false statements to investors," according to the indictment.

News and notes, Ultra Spring Break edition

It's Ultra time in downtown Miami, which means the lawyers will be fleeing around lunchtime today. And then it's spring break next week.

Scott Rothstein is writing his own motions. Paula McMahon has the interesting story here:

Ponzi schemer Scott Rothstein is imprisoned and disbarred from practicing as an attorney but it hasn’t stopped him from flexing his jailhouse lawyer muscles – on his own behalf.

Rothstein, 55, personally filed court documents on Thursday in his bid to try to force the feds to reduce his 50-year prison sentence.

Rothstein, who pleaded guilty to orchestrating a $1.4 billion Ponzi scheme, first had to obtain permission from Senior U.S. District Judge James Cohn to file his own court pleadings.

The judge consented and Rothstein, who is being held in the U.S. Bureau of Prisons’ secretive witness protection program for inmates, typed up a 13-page legal argument and submitted it Thursday.

In other news, Colbert asked RGB whether a hotdog is a sandwich. This is pretty funny.

Judge Cooke to get a piece of the Scott Rothstein case

Well, SFL hasn't used Scribd in a while, so I figured I get in on the fun. Here's a complaint filed by David Mandel against Scott Rothstein and TD Bank for civil RICO that landed before Judge Cooke:

Coquina Complaint

Coquina, an investment partnership based in Texas, alleges that TD Bank was complicit with Rothstein in the Ponzi scheme. According to the complaint, Coquina’s representatives met directly with Rothstein and Regional Vice-President Frank Spinosa at TD Bank’s corporate offices in Fort Lauderdale. At that meeting, Spinosa allegedly vouched for both Rothstein and the safety of the Coquina’s investments.

Also of interest, last week Spinosa’s counsel informed the parties in the RRA bankruptcy proceeding that his client intends to invoke his Fifth Amendment rights against self-incrimination and will refuse to answer deposition questions.

This is the case that keeps on giving...

In other news, Rumpole is railing on Justice Scalia because he dissented in the Graham case yesterday. What Rumpole doesn't tell you is that Scalia also dissented in United States v. Comstock, in which the Supreme Court said that federal law allows a district court to order the civil commitment of a mentally ill federal prisoner beyond the date he would otherwise be released. Scalia said that Congress didn't have authority to pass such a law under the necessary and proper clause. He's not perfect, but Scalia is the best friend a criminal defendant has in the Supremes.

Ed Morse duped for $57 MILLION

According to this Herald article, he wired Scott Rothstein $57 million based on this story:

What began as a dispute over a $2 million decorating bill for Morse's new Boca Raton and Maine homes transformed into a $57 million scam, in which Rothstein allegedly ripped off his wealthy clients with an elaborate series of lies, delays and forged court orders, sources familiar with the matter told The Miami Herald.
Ed and Carol Morse -- who were family friends with Rothstein -- sued Boca Raton decorator Jan Jones in 2006 claiming he botched their job. Rothstein told the Morses earlier this year that they had won the breach-of-contract case and that the decorator owed them $23 million, sources said.
It wasn't true. In fact, the Morses lost the case.
Rothstein also produced purported federal court orders signed by a judge, saying the Morses could claim the judgment by seizing a Cayman Islands bank account belonging to the decorator, sources said.
There were no such court orders, nor any fat bank account, court records show.
To confiscate the money, the Fort Lauderdale lawyer allegedly told the Morses they had to post a bond 2 ½ times larger than the judgment, or $57 million, the sources said. The large amount was required as a guarantee in case bank officials confiscated the judgment from the wrong account, Rothstein told them.
So the couple wired the $57 million to Rothstein in installments earlier this year, the sources said. It is not clear whether Rothstein paid any of that money back.

PAINFUL. Too bad Morse didn't have the force:



Okay, I was sick of Rothstein stories too, but $57 million.....

"WAWW"

That was the name of 22 of Scott Rothstein's corporations and it stood for "What a Wonderful World." Indeed. Here's the Sun-Sentinel story covering the genesis of the Rothstein spending, which started sometime in 2005.

I know, I know, enough Rothstein. But the Wall Street Journal got in the act, even including a slide-show. And here's the accompanying article, with some interesting stories including this one:

At an Eagles concert this year, Don Henley, the band's drummer, singled out Mr. Rothstein and his wife, Kimberly. "I don't normally do this, but this goes out to Scott and Princess Kimmy on their one-year wedding anniversary," Mr. Henley told the audience as the band ripped into "Life in the Fast Lane," its paean to the perils of excess. Mr. Rothstein paid $100,000 to one of Mr. Henley's charities for the dedication.

If you are sick of Rothstein, you're gonna want to puke after another story about how abysmal Obama has been with judicial selections. The New York Times has weighed in:

President Obama has sent the Senate far fewer judicial nominations than former President George W. Bush did in his first 10 months in office, deflating the hopes of liberals that the White House would move quickly to reshape the federal judiciary after eight years of Republican appointments.
Mr. Bush, who made it an early goal to push conservatives into the judicial pipeline and left a strong stamp on the courts, had already nominated 28 appellate and 36 district candidates at a comparable point in his tenure. By contrast, Mr. Obama has offered 12 nominations to appeals courts and 14 to district courts.
Theodore Shaw, a Columbia University law professor who until recently led the NAACP Legal Defense and Educational Fund Inc., said liberals feared that the White House was not taking advantage of its chance to fill vacancies while Democrats enjoy a razor-thin advantage in the Senate enabling them to cut off the threat of filibusters against nominees. There are nearly 100 vacancies on federal courts.
“It’s not any secret that among the civil rights community and other folks there has been a growing concern about the pace of nominations and confirmations,” Mr. Shaw said. “You have to move fairly quickly because things are going to shut down before you know it, given that next year is an election year and who knows what is going to happen in the midterm elections. No one wants a blown opportunity.”

Seriously, what is taking so long?

Quick news and notes

1. Former Broward School Board member Beverly Gallagher gets 37 months in prison. That was the agreed-to sentence. Here's the Sun-Sentinel article.

2. A bodyguard in the Scott Rothstein case pleads guilty. Here's the Herald article:

A Broward County bodyguard pleaded guilty to conspiring to shred financial records at the behest of Scott Rothstein as the Fort Lauderdale lawyer's $1.2 billion Ponzi scheme was collapsing last fall.
Enrique Ros, who came to know Rothstein through security work at the former Versace mansion in South Beach, is scheduled to be sentenced on Aug. 27 on an obstruction of justice charge in Fort Lauderdale federal court.
Ros, 33, of Pembroke Pines, was indicted in March along with business partner Daniel Dromerhauser and reputed Italian Mafia figure Roberto Settineri following an FBI sting operation starring Rothstein. The now-convicted lawyer, facing the heat of a federal investigation into his investment racket, played the lead role as the FBI targeted Settineri and the two businessmen in November.