SCOTT ROTHSTEIN SCANDAL
Rothstein, associates sued
In a lawsuit that reads like a racketeering indictment, a group of investors alleged that attorney Scott Rothstein bilked them of hundreds of millions of dollars.
BY JAY WEAVER, AMY SHERMAN AND SCOTT HIAASEN
jweaver@MiamiHerald.com
A group of investors filed a lawsuit Friday against Fort Lauderdale attorney Scott Rothstein, saying he stole hundreds of millions of dollars from them with the help of an inner circle of employees at his law firm and a handful of officers at a Canadian bank.
In the suit, which reads more like a racketeering indictment, the investors accuse Rothstein of conspiring with others to fabricate confidential legal settlements to sell to wealthy investors and to falsify bank records to disguise his theft from their trust accounts.
It was a ``classic Ponzi scheme'' where Rothstein paid off older investors with newer ones' money over four years -- until it collapsed last month, the suit says. He duped them into believing their investments were lucrative and their trust accounts safe -- but they weren't.
The civil complaint was filed by a half-dozen investors seeking to recover more than $100 million from Rothstein, Toronto Dominion Bank and others. They first discovered that the Fort Lauderdale lawyer had cleaned out their bank accounts in late October, when Rothstein fled to Morocco. He returned to Fort Lauderdale in early November to face a federal investigation into his investment scheme, which the FBI said might top $1 billion.
Rothstein, 47, has not been charged with a crime. Through his attorney, Rothstein declined comment on the suit.
The 147-page suit says Rothstein schemed with three others at his firm: general counsel David Boden, chief operating officer Debra Villegas, and corporate officer Andrew Barnett.
Documents filed with the suit show that Boden wrote an Oct. 1 letter to a potential investor in Rothstein's legal settlements from employment discrimination cases.
Boden had no knowledge of any fraud, said his attorney David Vinikoor.
``He never solicited anyone to invest in any structured settlements,'' Vinikoor said. ``He was deceived just like many others.''
On Friday, Villegas and Barnett could not be reached for comment.
The complaint, filed by attorney William Scherer, maintains that Rothstein and his accomplices schemed with a representative of a group that invested hundreds of millions of dollars in the bogus settlements.
One accused conspirator: Frank J. Prevé of the Banyon Investment Fund, who worked out of Rothstein's law office. In one instance, Prevé helped recruit the Von Allmen family of Fort Lauderdale and those close to them to invest $32 million in the Banyon fund, which, in turn, invested the money in phony settlements.
FAKE STATEMENTS
The suit says Prevé knowingly gave investors fake bank statements that led the investors to believe Rothstein was actually collecting multimillion-dollar settlement claims when, in fact, the lawsuits and the settlements were fictitious.
Prevé has been in trouble before. He was the president of the International Bank of Miami before pleading guilty in 1985 to embezzlement for using phony records to divert $2.3 million in bank funds. He was placed on 10 years' probation.
Prevé could not be reached for comment Friday.
The Banyon fund was founded by a company controlled by George G. Levin, a wealthy Fort Lauderdale investor.
The suit filed Friday hammers Toronto Dominion Bank and a trio of its officers -- Frank Spinosa, Jennifer Kerstetter and Rosanne Caretsky. They're accused of being ``complicit'' by serving as a ``critical linchpin legitimizing'' the Rothstein-led ``plot'' to fleece investors.




















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