Fort Lauderdale lawyer Scott Rothstein, who returned from a trip to Morocco last week to face a federal fraud investigation, said he was in good spirits Sunday.

``I am sitting here smoking cigars with Marc,'' Rothstein said in a brief interview Sunday afternoon with The Miami Herald, referring to his attorney Marc Nurik. ``Rumors of my demise have been greatly exaggerated. I'm doing pretty good.''

Rothstein, 47, has been accused by investors in an alleged Ponzi scheme of stealing hundreds of millions of dollars and by his law partners of crippling their firm, Rothstein Rosenfeldt Adler.

Federal authorities began questioning Rothstein upon his return from Morocco on Tuesday and based their search warrant to raid the law firm Wednesday in part on what he and his defense lawyer had told them, according to sources familiar with the probe.

Nurik, however, said news accounts stating that authorities were talking with Rothstein are false -- despite last week's repeated meetings and telephone calls involving Rothstein, his lawyer, FBI agents, IRS agents and federal prosecutors as reported by sources familiar with the probe.

``All this nonsense that he is somehow hanging out with the government -- he is free,'' Nurik said. ``I don't know where all this stuff is coming from.''

Rothstein, who is cooperating with investigators, is under federal surveillance at an undisclosed South Florida location.

Authorities could arrest him with evidence collected so far, the sources said, but they are trying to build a conspiracy case around Rothstein and possibly others who participated in his alleged investment scam under the mantle of his law firm.

UNDER PRESSURE

Rothstein said Sunday he could not disclose his whereabouts because otherwise ``Marc will break my head.'' Rothstein then handed the telephone to his lawyer, Nurik, who said that, in fact, they had not been smoking cigars.

``He is under a lot of pressure,'' said Nurik, who had worked at Rothstein's law firm but stepped down to represent him. ``I don't want anybody to think he is having a good time.''

During the brief interview with Nurik, Rothstein could be heard heartily laughing in the background.

Nurik would not disclose Rothstein's whereabouts -- a Florida location that Nurik said he -- not federal authorities -- chose.

``I have him hidden,'' Nurik said. ``I'm not going to tell anybody where, including the government. I don't know where people are coming up with this stuff. I have been discussing his case with the government as any defense counsel would under these circumstances.

``I have been in contact with the government,'' Nurik said. ``My client is at an undisclosed location of my choosing and he is talking to no one but me. He hasn't even met with his family.''

Nurik declined to discuss the case, but added that Rothstein wanted to say goodbye.

``I'm doing really good,'' Rothstein said. ``Marc is a great lawyer, a great friend. We will speak when the time is right.''

Meanwhile, a receiver appointed last week by a judge to examine the law firm's finances will be back in court Monday for an update.

On Friday, Broward Circuit Judge Jeffrey Streitfeld gave Toronto Dominion Bank -- where Rothstein kept dozens of his investors' accounts -- until noon Monday to turn over financial records related to him and his law firm. Streitfeld will hold a hearing one hour later with the receiver, retired Miami-Dade Circuit Judge Herbert Stettin.

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