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Posted on Tuesday, 11.03.09

BROWARD COUNTY

Feds probe prominent Broward attorney Scott Rothstein

Federal officials stepped up their probe into lawyer Scott Rothstein's business dealings as candidates who received contributions weighed returning the money.

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BY AMY SHERMAN, JAY WEAVER AND MARC CAPUTO

asherman@MiamiHerald.com

The politically influential Fort Lauderdale law firm that Scott Rothstein created just a few years ago has attempted to oust him amid a criminal investigation into his business dealings, sending shock waves through political campaigns that took fat checks.

The investigation into Rothstein, a major fundraiser for Gov. Charlie Crist, Chief Financial Officer Alex Sink and other major politicians has left candidates in the lurch and the prominent law firm reeling. The firm -- Rothstein Rosenfeldt Adler -- was a top sponsor of a Fort Lauderdale golf benefit Friday chaired by former Gov. Jeb Bush.

Federal authorities on Monday stepped up their criminal investigation into Rothstein, 47, who is suspected of operating a Ponzi scheme by selling hundreds of millions of dollars in fabricated legal settlements to investors.

``Nobody can really be surprised by this spectacular fall -- the question wasn't whether it would happen, but when,'' said Michael Goldberg, a Fort Lauderdale attorney who serves as a court receiver in Ponzi cases. ``How Rothstein was able to generate this kind of money practicing law seemed impossible.''

Rothstein has been a high-profile player, buying million-dollar cars and homes, and doling out generous donations to political campaigns and charities.

But as his business world began to crumble in recent days, Rothstein left the country. His attorney Marc Nurik said Monday that he will return this week, but his whereabouts were a mystery.

On Friday, ``He walked out on his wife and said, `Goodbye baby, see you tonight,' kissed [her] and went to the airport,'' said a source close to the law firm.

On Monday, political candidates and parties that received campaign contributions from Rothstein and his law firm were debating whether to return the money.

Rothstein, his firm and his wife gave about about $600,000 to the Republican Party of Florida and $200,000 to the state Democratic Party, both of which said they were ``monitoring'' the investigation.

Sink, the Democratic gubernatorial candidate, said she was giving back an unspecified amount of donations. Records show she received $2,050.

``These are very serious allegations,'' Sink's campaign said.

Rothstein, his wife and employees and relatives of employees of his law firm have contributed $100,550 to Republican Gov. Charlie Crist's Senate campaign since the governor announced in May, according to campaign finance records. Rothstein's law firm is one of Crist's top contributors.

Rothstein said in an interview in August that he got married in a three-day wedding celebration at the former Versace mansion in South Beach in January 2008 with about 400 guests, and that Crist flew in to attend.

Crist, in Fort Lauderdale Monday to tour a web development company, said little about Rothstein.

``I don't want to put the cart before the horse, and I don't want to prejudge anybody,'' Crist said. ``Let's see what the facts are first before we jump forward. But it doesn't look great.''

Sources told The Miami Herald that the FBI and other federal investigators are examining a Rothstein-controlled investment company run under the mantle of his law firm.

Rothstein is suspected of selling ``structured settlements'' from fabricated personal injury cases, each ranging from hundreds of thousands of dollars to millions of dollars, sources said. Rothstein allegedly claimed that his law firm anticipated the settlements and that investors who bought them at a discount stood to make from 20 to 52 percent returns.

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