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SCOTT ROTHSTEIN SCANDAL

Lawyer Scott Rothstein: The rise and fall of a wheeler dealer

Lawyer Scott Rothstein rose from modest beginnings, but investors and law partners who trusted him say he fueled his empire by siphoning their bank accounts.

jweaver@MiamiHerald.com

If there was one thing Fort Lauderdale lawyer Scott Rothstein craved, it was attention. And how better to get it than to whip out his checkbook?

Like at Gov. Charlie Crist's 52nd birthday party/GOP fundraiser last year, when, instead of buying a $5,200 candle, Rothstein bought an entire chocolate cake covered with 52 candles. His donation: $52,000.

As the governor gave a speech, Rothstein was talking loudly.

``Scott, if you want the mic, it's going to cost you another $100,000!'' the governor joked when Rothstein wouldn't stop talking.

Like at an Eagles concert in January, when band leader Don Henley stood on stage and dedicated, at Rothstein's request, Life in the Fast Lane to the lawyer and wife Kimberly for their first anniversary. His donation: $100,000, to a Henley environmental cause.

Like the TV ads showing Rothstein with star athletes Dan Marino and Alonzo Mourning, whose children's charities benefited from his philanthropic largess, and the glossy magazine ad with his firm photo proclaiming: ``Giving back is an essential part of life.''

``Scott wanted attention -- he wanted to be the guy,'' said Roger Stone, a longtime Republican political operative who shared Rothstein's office suite. ``Giving big checks and getting his butt kissed in public was the payoff.''

But now, facing accusations of massive financial fraud, Rothstein is attracting attention of a different kind -- and his life in the fast lane seems to have crashed spectacularly.

The FBI and IRS are sifting through his computer files, and his Las Olas Boulevard law firm is in shambles.

Over the span of six years, Rothstein's net worth soared from at least $160,000 to tens of millions of dollars -- including opulent waterfront homes, a fleet of foreign sports cars, flashy watches, a stake in the former Versace mansion in South Beach and a restaurant group, court records show.

Rothstein, 47, personally spent more than $14 million on a half-dozen properties in Broward County since June 2003, property records show. They include four lots on Castilla Isle in Fort Lauderdale, for which he paid about $7.7 million, and another house bought last year for $6.5 million. He also owned multimillion-dollar homes in Rhode Island and New York.

In recent years, Rothstein also owned a black Rolls-Royce Phantom convertible, and multiple Lamborghinis and Ferraris.

The lawyer had collected cars for years, though his spending increased over time.

With the wealth and philanthropy came well-oiled connections in all the right places. Rothstein was able to use his charisma and contacts in the Broward society scene and business community to lure wealthy friends and patrons to invest with him, lawyers say.

But the very people who trusted him -- investors, law partners and clients -- now accuse him of living large on their dime, running an investment scam that was a massive Ponzi scheme and wiping them out for what could be hundreds of millions of dollars.

``The mark of any good con man is the ability to get people to like them,'' said Steve Geller, a Broward County Commission candidate whose political committee received a $50,000 donation from Rothstein and who now plans to return it. ``The guy certainly spoke a great game.''

Rothstein has not been criminally charged but is cooperating with federal prosecutors, offering to name others who might have been involved in wrongdoing, sources said.

Under scrutiny: Rothstein's sale of employment discrimination settlements at a discount, through an investment tool known as ``structured settlements.''

He allegedly solicited investors to front reduced payouts to plaintiffs and then collect profitable returns when the settlements were paid off in full. But Rothstein is suspected of concocting lawsuits that investors thought were legitimate. Investors are now planning to sue him and his firm.

Only two years ago, the Florida Bar appointed Rothstein as vice chair of a grievance committee that hears ethics and other complaints against attorneys.

``He was a good individual at making his personality seem larger than it was, I guess by using money,'' said former state Sen. Walter ``Skip'' Campbell. ``He got associated with some very high-profile people and was able to get within their little quarters and use that to parlay into what looked like a very successful life.''

It was a fast rise from modest beginnings for Rothstein, who grew up in what he described as a ``lower middle-class'' family.

``I shared a room with my sister until I was 13 in a Bronx apartment,'' he told a Miami Herald reporter in August, when he announced he was a new partner in the Versace venture.

Rothstein moved to Florida in the late '70s, graduated from the University of Florida in 1984 and from Nova Southeastern University Law School four years later.

For years, he handled routine employment discrimination and other civil cases.

In 1993, Rothstein married Kimberly Hill, another attorney. By 2003, when she filed for divorce, Rothstein was barely prosperous, let alone affluent.

The couple owned about $206,000 in stocks and retirement plans, which they agreed to split in half, according to a marital settlement agreement. They owned a home in Plantation, which they sold for a $125,000 profit.

Before the break-up, Rothstein had already gotten to know another lawyer around town: Stuart Rosenfeldt, his future law partner.

The two lawyers had met when they were opposing counsel in a case. They started talking weekly, shooting the breeze while at work at their separate offices.

``Every Saturday, we would go to our offices and one would call the other,'' Rosenfeldt said.

Rosenfeldt recruited Rothstein to join the firm he was at around the late 1990s. Later, Rothstein suggested that they launch their own firm.

``He offered to fund it,'' said Rosenfeldt.

Their plan: a small boutique firm that specialized in labor and employment. They moved into an office with a handful of lawyers.

``Originally, our plan was not to be a big firm,'' Rosenfeldt said.

But Rothstein ultimately had other ideas.

By 2007, the firm's growth was exploding. Rothstein Rosenfeldt Adler grew to 70 lawyers with offices in Fort Lauderdale, Boca Raton and Miami -- plus a separate group of lawyers in Caracas.

Partner Rosenfeldt maintains he knew nothing about Rothstein's alleged scam, and that Rothstein had exclusive control of the firm's finances. A judge removed Rothstein as the firm's chief executive officer and appointed an independent receiver last week.

Rothstein increased the firm's stature by hiring former Broward County judges, as well as a formerly powerful politician, ex-county Sheriff Ken Jenne. Jenne, convicted of corruption charges in 2007, signed on after his release from prison last year.

As his fortunes seemingly grew, the charismatic lawyer gave hundreds of thousands of dollars to the state Republican and Democratic parties and politicians -- some of whom, including Crist, are now returning the donations.

Records show that since 1996, Rothstein and his law firm contributed at least $924,000 to 60 state candidates and state political committees and causes. He co-chaired fundraisers for President George W. Bush and several U.S. senators, including John McCain and Mel Martinez.

At political functions, Rothstein was larger than life, said Broward GOP chairman Chip LaMarca. He held a fundraiser for Crist earlier this year on the massive deck of his home overlooking the Intracoastal Waterway.

Rothstein describes himself on his website as a ``close friend and advisor'' to the governor, who appointed him to his Chairman's Council, a group of 25 business leaders. Last week, Crist also called Rothstein a ``friend.''

Though normally a big GOP donor, in the most recent campaign finance reporting period, Rothstein's law firm gave $200,000 to the Florida Democratic Party.

Beyond politics, Rothstein's image spread throughout South Florida in recent years -- at the same time as his alleged investment scam reached greater heights.

He hired publicist Kip Hunter to promote his image as a successful lawyer, entrepreneur and philanthropist.

The firm advertised its logo -- RRA -- at Land Shark Stadium during Miami Dolphins and Florida Marlins games.

Rothstein garnered considerable media attention, including a gushing profile in the October 2007 issue of Las Olas Lifestyle magazine, which he posted on his law firm's website.

The headline: ``A Passionate Philanthropist.''

``I truly believe for some reason unknown to me, I was given this amazing blessing,'' he told the magazine. ``And I refuse to squander it.''

Rothstein was the talk of the town in January 2008, when he held his over-the-top wedding at the Versace venue, now known as Casa Casuarina. It featured three days of partying for 400 people, including Gov. Crist. Rothstein married Kimberly Wendell, a fitness enthusiast and former bartender at Blue Martini in Fort Lauderdale.

He was in the news again in March of 2008, following the slaying of Melissa Britt Lewis, a new partner at the firm. He hired around-the-clock security for Debra Villegas, the firm's chief operating officer and Lewis' best friend.

Villegas' estranged husband Tony Villegas was arrested a short time later and charged with murder in Lewis' killing. In April 2008, Debra Villegas moved from Sunrise to a Weston home that Rothstein bought for her for $475,000, records show.

Rothstein's pursuit of fortune and status climaxed with what may have been his last venture before investigators closed in on his law firm: becoming a partner in Casa Casuarina in August. The plan was to expand his upscale Bova restaurant chain to the South Beach landmark.

Some of Rothstein's investors became suspicious in late October when he failed to distribute the scheduled payments from their ``structured settlements.'' They started contacting authorities.

Rothstein, it turned out, had flown to Morocco.

He texted his law colleagues from there apologizing for ``letting you all down'' and said he was contemplating life in prison -- or suicide.

``I am a fool,'' the message continued. ``I thought I could fix it but got trapped by my ego and refusal to fail, and now all I have accomplished is hurting the people I love.''

Rothstein did come back -- in style -- in a chartered private jet that arrived at Fort Lauderdale Executive Airport on Tuesday. He met with federal prosecutors and has been holed up in an undisclosed location since.

After his initial debriefing, dozens of FBI and IRS agents raided his office Wednesday, seizing 44 boxes of computer files and documents. They included records from Toronto Dominion Bank and Gibraltar Private Bank & Trust. Rothstein's investors used the former bank, and his law firm used the latter for everyday operations.

His attorney, Marc Nurik, declined to discuss details.

On Friday, the law firm was to sponsor a Fort Lauderdale golf tournament -- chaired by former Gov. Jeb Bush -- benefiting the Cystic Fibrosis Foundation.

The group dropped his sponsorship last week.

Miami Herald staff writers Douglas Hanks, Scott Hiaasen, Beth Reinhard, Jennifer Lebovich and Diana Moskovitz contributed to this story.

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