When auto magnate Ed Morse faced a legal tussle with a South Florida interior decorator, Morse turned to his lawyer Scott Rothstein -- and got taken for a ride.

What began as a dispute over a $2 million decorating bill for Morse's new Boca Raton and Maine homes transformed into a $57 million scam, in which Rothstein allegedly ripped off his wealthy clients with an elaborate series of lies, delays and forged court orders, sources familiar with the matter told The Miami Herald.

Ed and Carol Morse -- who were family friends with Rothstein -- sued Boca Raton decorator Jan Jones in 2006 claiming he botched their job. Rothstein told the Morses earlier this year that they had won the breach-of-contract case and that the decorator owed them $23 million, sources said.

It wasn't true. In fact, the Morses lost the case.

Rothstein also produced purported federal court orders signed by a judge, saying the Morses could claim the judgment by seizing a Cayman Islands bank account belonging to the decorator, sources said.

There were no such court orders, nor any fat bank account, court records show.

To confiscate the money, the Fort Lauderdale lawyer allegedly told the Morses they had to post a bond 2 ½ times larger than the judgment, or $57 million, the sources said. The large amount was required as a guarantee in case bank officials confiscated the judgment from the wrong account, Rothstein told them.

So the couple wired the $57 million to Rothstein in installments earlier this year, the sources said. It is not clear whether Rothstein paid any of that money back.

Rothstein's attorney, Marc Nurik, and the Morses' lawyer, Norman D. Tripp, declined to comment.

PONZI SCHEME

Rothstein, 47, is under federal investigation for allegedly running a Ponzi scheme that defrauded investors and his law clients of hundreds of millions of dollars. Some investors filed suit Tuesday seeking to force his law firm, Rothstein Rosenfeldt Adler, into involuntary bankruptcy.

IRS and FBI agents are investigating whether Rothstein, under pressure and scrambling to pay insistent investors in recent months, might have used the Morses' millions.

Ed Morse, 88, was also a small investor in Rothstein's separate business venture now under scrutiny by federal prosecutors.

AN AUTO DYNASTY

The Morse family's auto empire was founded by Ed and his father in 1946. Today the Ed Morse Automotive Group is run by Morse's son, president and CEO Edward J. ``Ted'' Morse, Jr, 59. The company owns 14 dealerships in Florida and Alabama. It appears Rothstein has been close to the Morse family for several years.

In 2005, the Morse auto company loaned Rothstein $2.73 million, which the attorney used to buy a home in Fort Lauderdale, county records show.

Ted Morse and his wife Patti are on the board of Rothstein's charity, the Rothstein Family Foundation, which Rothstein founded last year.

Rothstein also listed Ted Morse as one of three references in 2007 when he applied to the governor's office for a seat on the Judicial Nominating Commission.

In their 2006 lawsuit in Palm Beach Circuit Court, Ed and Carol Morse accused decorator Jones of inferior work at the two homes they were building.

They contended that Jones provided ``substandard'' furniture and misspent deposits. They also accused Jones of fraud, saying he falsely claimed that he was licensed by the state as an interior designer; in fact, Jones is not licensed.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@