With soft piano music in the background, an anonymous Republican in Gov. Rick Scott’s latest attack ad levels an explosive claim about Democrat Charlie Crist and Ponzi schemer Scott Rothstein.
“I got swindled by both Rothstein and Charlie,” the man says.
But not only is there no evidence to support this accusation about Crist, the Miami Herald has identified the man as Fort Lauderdale investor Dean Kretschmar — and found that he never made that allegation in his successful lawsuit to recover millions of dollars in Rothstein-related losses.
Also, Crist isn’t directly named in the suit Kretschmar joined. Nor is Crist mentioned in any of the other major court actions brought by victims of Rothstein’s $1.4 billion Ponzi scheme, the fourth-largest in U.S. history.
Rothstein showered Crist and other politicians, mostly Republicans, with tainted money that almost all of them returned after the scheme was exposed in 2009. Rothstein used his close relationships with Crist, other politicians, sports stars, and area religious and charitable leaders as an advertising tool to dupe investors.
None of that context is in the ad cut by the 41-year-old Kretschmar. Repeating a disputed Rothstein claim that Crist sold judgeships, Kretschmar makes a series of omissions.
Kretschmar fails to mention that his Fort Lauderdale lawyer is William R. Scherer, a Scott donor and GOP operative. Rothstein once called Scherer a “mentor.” And Scherer also tried to help get a lenient sentence for Rothstein — the very man Scherer’s client trashes in the ad, which has run about 4,000 times in Florida at a cost of at least $2million.
“Scott Rothstein,” Kretschmar says in the ad, “swindled a lot of people — me included — bankrupted many families.”
But Kretschmar wasn’t bankrupted.
Kretschmar recouped most of the roughly $8 million that he personally gave Rothstein as part of an investor group known as Razorback.
In all, investors of Razorback settled for $170 million with TD Bank, which was the former Rothstein law firm’s banker and played a role in his Ponzi scheme, which involved the sale of fabricated legal settlements. They had sought $190 million.
Fort Lauderdale attorney Michael Goldberg, who is handling the disbursement of funds recovered in the bankruptcy case of Rothstein’s former law firm and related investor lawsuits, said “all creditors and victims of his fraud have been made whole or will be made whole within 60 days.”
Since the lawsuit ended, Kretschmar has founded a company called Soaring Eagle Investments. He still lives in the 5,000-square-foot home near Coral Ridge Country Club that he bought for $2.9 million in 2007.
A woman who answered the door, later identified by the Scott campaign as a house guest, told a Herald reporter Tuesday that Krestchmar was out of town on business. He couldn’t be reached by telephone or email for comment. Scott won’t comment, either.
“The ad speaks for itself,” Scott has said repeatedly.
Scott’s campaign manager, Melissa Sellers, issued a statement that said Crist’s voters and supporters were “most certainly swindled” when the Republican-turned-independent-turned-Democrat flip-flopped on his campaign promises and political positions.
Kretschmar’s attorney, Scherer, defended the ad as “absolutely truthful,” but he simultaneously denied that his client directly implicated Crist in the Ponzi scheme.
Scherer said the point of the ad was that Crist took Rothstein’s money — about $81,000 for his unsuccessful U.S. Senate campaign — at the same time his client was being ripped off.
“I don’t think it’s negative campaigning when somebody tells the truth,” Scherer said.
There is no doubt that Rothstein was close to Crist and that he and his now-defunct law firm contributed hundreds of thousands of dollars to Crist’s campaigns and the Republican Party of Florida when Crist was still a Republican.
Crist gave Rothstein a major post in the legal community: a spot on a Judicial Nominating Commission that helps governors fill judicial vacancies.
Last year, Rothstein testified in open court that Crist sold judgeships in return for campaign contributions. But federal investigators, who first examined that claim in 2010, have found no evidence of it and are not actively investigating the charge, which Crist calls the lies of a convict.
It is common practice for governors to appoint campaign donors to various boards and nominating posts.
For instance, Scherer and his law firm have contributed at least $23,000 to Scott’s campaigns since 2010. Scott appointed Scherer to a JNC post in 2011. The next year, Scott appointed Scherer’s daughter, Elizabeth Ann Scherer, to a circuit court bench.
Last year, Kretschmar kicked in a $500 contribution to her reelection campaign. Kretschmar has given $18,300 more to various Republican groups and candidates, including Crist in 2006.
This year, amid the tight race against Crist, Scott tapped Scherer’s firm to sue a company called Digital Domain in an economic-development deal gone bad that was inked when Crist was governor four years before. That lawsuit repeatedly mentions Crist by name — unlike the suit that Kretschmar and dozens of Razorback investors brought against TD Bank.
Kretschmar’s ad is part of a one-two punch by the Scott campaign concerning Rothstein. The first TV ad cost about $1.5 million to run.
Crist’s campaign says Republicans are trying to distract voters from remembering that Scott’s former hospital company was slapped with a record Medicare-fraud fine.
As an image of Rothstein and Crist blowing out the governor’s birthday-cake candles floats across the screen, Kretschmar says in another part of the ad that “nobody was closer to Rothstein than Charlie Crist.”
Kretschmar’s lawyer, though, once had close ties, as well.
In a South Florida Sun Sentinel article in 2008, Scherer gave this endorsement of Rothstein: “Whatever he’s doing, it’s working … I chose his firm as my lawyers, to represent me in some attorney-fee litigation cases. That should tell you something.”
Crist and Scherer were not the only ones who once praised Rothstein while he was stealing from people. Rothstein also sidled up to Republican presidential candidate John McCain and his running mate, Sarah Palin, former Miami Dolphins great Dan Marino, Miami Heat star Dwyane Wade, and, after contributing stolen money, had a synagogue’s family center named after the Rothstein family.
Rothstein clearly liked Scherer. He told the New Times Broward-Palm Beach that Scherer was a “mentor.” And in a 2008 email obtained by the Herald, he once thanked Scherer and others because they “gave me my start in politics, and I have never and will never forget that. I am fiercely loyal.”
Asked about the email, Scherer said he didn’t remember it, but added: “I invited every type of lawyer to get involved … To take me to task for what Rothstein said is a cheap shot.”
But Democrats say the same thing about his client’s ad.
Charles Lichtman, a Democratic attorney and Crist donor who has represented the trustee in the bankruptcy case of Rothstein’s defunct law firm, said “there’s zero evidence that Charlie Crist had any knowledge that Scott Rothstein was up to no good.”
“To suggest Crist was part of the swindle is not fair,” Lichtman said. “It’s not remotely fair.”
Rothstein was a big help to Scherer, directly and indirectly.
In suing TD Bank, Scherer’s firm reaped about $45 million in fees — a huge payout from the $170 million settlement. And in order to get to that settlement, Scherer relied on Rothstein to point out the people at the institution who helped him perpetrate his fraud.
“Mr. Rothstein,” Scherer wrote to U.S. District Judge James I. Cohn on June 4, 2010, “has been an extremely valuable resource.”
Now, four years later, Rothstein is serving a 50-year sentence for his role in ultimately stealing $360 million in total from investors. And he is still helping Scherer’s cause — this time by giving his client and his favorite candidate ammunition to try to discredit Crist.
“Your enemies are my enemies,” Rothstein said in his 2008 email to Scherer “…we have been in the trenches together far too long for it to be any other way.”
CLARIFICATION: The original version of this story said the person that answered Kretschmar’s door was a maid. According to the Scott campaign, the woman was a house guest.