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FORT LAUDERDALE

Back from Morocco, attorney Scott Rothstein faces feds

Scott Rothstein, the high-profile Fort Lauderdale lawyer accused by investors and law partners of stealing millions of dollars, returned from an overseas trip to meet federal authorities.

jweaver@MiamiHerald.com

A flashy Fort Lauderdale lawyer who investors say fleeced them for hundreds of millions of dollars and whose partners say wiped out his law firm's finances flew back from Morocco on Tuesday to face federal prosecutors considering criminal charges, sources familiar with the probe said.

While Scott Rothstein and his defense attorney, Marc Nurik, met with prosecutors, a Broward County judge appointed an independent receiver to examine the financial records of Rothstein's law firm, Rothstein Rosenfeldt Adler.

Rothstein, 47, had left for Morocco on Friday as news of his alleged investment scam started leaking around Broward County. He came back facing an FBI investigation and the loss of his Las Olas Boulevard law firm. The once high-flying firm, formed in 2002, has only $500,000 left in its bank account, a lawyer said.

Rothstein, suspected of running a Ponzi scheme, apparently drained vast sums of money from the firm, his partners say.

``I believe there are about $500,000 in operating funds -- maybe slightly more,'' Grant Smith, an attorney at the firm, said at a court hearing. He said the firm set up new bank accounts Tuesday for funds that started to come in over the weekend.

Most of the firm's lawyers have agreed to forgo their paychecks due Nov. 13.

On Oct. 31, Rothstein sent his law partners a text message that indicated he was contemplating suicide, sunsentinel.com reported Tuesday night.

Rothstein mused that he had three options -- kill himself, live life ``on the lam as a fugitive'' or go to prison and risk being killed there because he had made enemies, said the law firm's co-founder, Stuart Rosenfeldt, according to the website. Rosenfeldt talked to Rothstein, urging him to ``choose life.''

In court papers, the firm has accused Rothstein of secretly running a fraudulent investment scheme that sold ``fabricated'' structured settlements from employment discrimination and whistle-blower cases to investors who were promised lucrative returns for fronting the payouts.

Rothstein's investors had $500 million deposited in a Canadian bank on Oct. 23 and that money was gone seven days later, said William Scherer, an attorney representing investors he says lost more than $70 million.

``I'm not surprised at those numbers given what I know about the case so far,'' Scherer said.

Rothstein and his attorney could not be reached for comment Tuesday.

TALENTED, CHARISMATIC

Rothstein and his firm gave millions to politicians and charities across South Florida. Scherer said that Rothstein met some potential investors through the charities and gala functions and was viewed as a talented and charismatic attorney.

``We all wondered where the money came from,'' he said of the donations.

Some investors said they intend to sue Rothstein and the law firm.

Rosenfeldt and other law partners said they knew nothing of Rothstein's alleged investment scheme.

At Tuesday's hearing, Broward Circuit Court Judge Jeffrey Streitfeld appointed retired Miami-Dade Circuit Court Judge Herbert Stettin as the receiver of Rothstein's firm. Stettin will handle financial matters, security of the building and access to files.

Streitfeld also directed the firm to set aside $50,000 for the receiver and accounting staff.

Rosenfeldt will become the CEO and oversee legal matters.

Officially, Rothstein is now out of the firm.

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