Wife of Fort Lauderdale Ponzi schemer Rothstein gets one and a half years in prison
11/12/2013 2:07 PM
11/12/2013 8:07 PM
Kimberly Rothstein once lived with her husband, Scott, in a posh waterfront home in Fort Lauderdale.
They were the toast of Las Olas Boulevard.
Now, they are both behind bars.
Kim Rothstein, 39, surrendered to authorities Tuesday after a federal judge sentenced her to one and a half years in prison for plotting to fence more than $1 million worth of jewelry, including a 12.08-carat yellow diamond ring, that her incarcerated husband had purchased with his Ponzi scheme proceeds.
“I’m terribly ashamed,” a crying Rothstein told U.S. District Judge Robin Rosenbaum, in a packed Fort Lauderdale federal courtroom. “I’m willing to pay the consequences.”
The wife, whose husband is serving a 50-year sentence for masterminding one of Florida’s biggest investment scams, claimed she only learned about his crime after he had fled Fort Lauderdale and returned from Morocco in November 2009.
Kim Rothstein got off relatively light, because she faced between three and four years in prison for her money-laundering conspiracy. But prosecutors recommended she should receive a two-year sentence, after taking into account her cooperation in helping them target four other defendants involved in the plot to sell the ill-gotten gems.
Kim Rothstein, who only recently filed for divorce, tried to portray herself as a woman who was verbally and physically abused by her husband in the hope of gaining leniency from the federal judge.
“She is not the poster child for a greedy Ponzi wife,” said her defense attorney, David Tucker, who sought a year-and-half prison term, after detailing how Kim Rothstein became addicted to alcohol and drugs to help her cope with a series of abusive men in her life. “How inaccurate.”
In court papers, Kim Rothstein’s attorney also said for the first time that her husband instructed her to hide the jewelry as federal agents seized his Fort Lauderdale properties, luxury cars and other tainted assets four years ago. That revelation is likely to jeopardize chances for the convicted con man to reduce his sentence for the $1.2 billion investment scam he ran out of his Las Olas Boulevard law firm. In early 2010, Rothstein, 51, pleaded guilty to racketeering and other fraud charges involving the sale of purported legal settlements to investors from Florida to New York.
Assistant U.S. Attorney Lawrence LaVecchio told the judge that Rothstein “came up with this plan” for his wife to keep some of the jewels, watches and coins he had purchased with his Ponzi millions. “There is independent evidence that established that fact,” said LaVecchio, who has prosecuted the sprawling Rothstein case with prosecutor Paul Schwartz.
Kim Rothstein’s criminal life unfolded in November 2009, when Internal Revenue Service agents showed up at the couple’s waterfront mansion after his investment scam crashed. The wife helped them retrieve what she claimed was all the cash, jewelry and watches that the one-time attorney had obtained with millions stolen through his Ponzi scheme.
And Kim Rothstein, testifying the following February in the bankruptcy case of her husband’s defunct law firm, repeated that she had turned over all of the couple’s jewelry to authorities.
But she was lying.
According to court records, Kim Rothstein had already started to hide jewelry from her husband as their marriage deteriorated along with his investment scheme in fall 2009.
Among the pieces she kept before IRS agents searched the couple’s home: the 12.08-carat yellow diamond ring, which Rothstein had bought for her from J.R. Dunn Jewelers in Fort Lauderdale.
But after he returned from Morocco that November, Scott Rothstein advised Kim Rothstein to keep some of the jewels and other valuables he had bought for the couple, according to court records.
Last year, Kim Rothstein was charged along with her civil lawyer, Scott F. Saidel, 45, and her friend, Stacie Weisman, 50, with conspiring to hide and sell more than $1 million worth of jewelry, watches and coins.
Kim Rothstein and Weisman, who offered to hold some of the jewelry for her, were accused of selling the pieces through a local jeweler.
The three defendants, who all pleaded guilty, were charged with money-laundering conspiracy, obstruction of justice and tampering with a witness: Scott Rothstein. He had already been helping authorities investigate his complex investment scheme, but kept secret the valuable diamond ring and other pieces.
Weisman’s attorney, Alvin Entin, said his client came to know Kim Rothstein through Fort Lauderdale charity circles and wanted only to help a friend in need, stressing that Weisman used “horrible judgment” but received “no financial benefit” for her supporting role.
“I’m so incredibly sorry,” said a sobbing Weisman, who had served a short prison sentence for a check-kiting conviction a decade ago. “It’s nobody’s fault but my own.”
Weisman also cooperated with prosecutors, who recommended that she receive a two-year prison sentence. Entin asked for no jail time. The judge, instead, gave her a three-month sentence, allowing her to surrender in 45 days so that she can continue to help her ailing mother. She also has to serve nine months’ home detention as part of her probation.
Saidel was sentenced in October to three years in prison for helping Kim Rothstein hide proceeds from the jewelry sale. The now-disbarred lawyer, who made about $75,000 in fees, was ordered to surrender next week.
Kim Rothstein and Weisman sold some of the jewelry to Eddy Marin and Patrick Daoud. The latter is a longtime jeweler in Fort Lauderdale, who bought the valuable yellow diamond from Weisman for $175,000.
Marin, 50, and Daoud, 54, who were indicted on separate charges, pleaded guilty before their trial in October.
According to court records, Weisman showed the ring to Marin, and he took a picture of it so he could try to sell it. In April 2010, Weisman gave the ring to Daoud to have it graded by the Gemological Institute of America, and sold it to him, according to court records. Weisman gave the proceeds to Kimberly Rothstein and Saidel.
Lawyers in the bankruptcy case of Rothstein’s law firm helped the Fort Lauderdale federal prosecutors uncover the crime of the missing diamond.
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