Convicted South Florida Ponzi schemer Scott Rothstein, a disbarred attorney who ran a $1.2 billion investment scheme out of his Fort Lauderdale law firm, will not be receiving a reduction in his 50-year prison sentence because he lied to federal prosecutors, authorities said Tuesday.
Prosecutors withdrew their pending motion to reduce Rothstein's sentence based on his cooperation in the sprawling racketeering investigation because he provided “false” information and violated his plea agreement. Rothstein, who helped the U.S. attorney's office gain convictions of almost 30 defendants, was hoping to see many years cut from his sentence for his assistance.
That reward won't happen.
“In the judgment of the United States, the defendant provided false material information to the government and violated the terms of his plea agreement,” Assistant U.S. Attorney Lawrence LaVecchio wrote in a motion to withdraw an earlier request for a sentence reduction with U.S. District Judge James Cohn. “Therefore, in the exercise of its sole discretion, the government moves to withdraw the previously filed motion.”
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LaVecchio didn’t provide details of Rothstein’s false information in the court filing.
Rothstein’s defense attorney, Marc Nurik, could not be reached for comment.
Rothstein’s crime shook up powerful people in high places throughout the region. Rothstein was sentenced to 50 years in June 2010 on racketeering and other fraud convictions for selling fabricated legal settlements to investors from Florida, New York and Texas. He pleaded guilty in January 2010, after his Ponzi scheme collapsed around Halloween the previous year.
During the fallout from the scandal, several defense attorneys regularly described Rothstein as a liar who would say anything to reduce his prison sentence.
“I’m not surprised that the government withdrew its motion for a sentence reduction based on the extent of lies Rothstein told about my client,” Miami attorney Sam Rabin said Tuesday.
Rabin represented TD Bank regional vice president Frank Spinosa, who pleaded guilty to a fraud charge in late 2015 and was sentenced to 2 1/2 years in prison. Spinosa was the last defendant to be convicted, after he admitted he helped Rothstein hoodwink wealthy investors by helping craft letters falsely assuring the security of their money in TD Bank trust accounts.
Spinosa’s former employer, TD Bank, lost hundreds of millions of dollars in legal battles with Rothstein's investors.