A team of federal prosecutors who won convictions against South Florida Ponzi schemer Scott Rothstein and 28 others implicated in his $1.2 billion investment racket have been recognized for their distinguished work by the U.S. Department of Justice.
The U.S. Attorney General’s Distinguished Service Award was presented on Thursday to assistant U.S. attorneys Lawrence D. LaVecchio, Jeffrey N. Kaplan, Paul F. Schwartz, Michelle B. Alvarez, Alison W. Lehr, Evelyn B. Sheehan and Madeleine Shirley, all from the Southern District of Florida.
The collapse of Rothstein’s massive financial scheme in October 2009 left a wide swath of carnage that included hundreds of wealthy investors from South Florida to New York. Rothstein, who pleaded guilty and is serving a 50-year prison sentence, operated the scheme out of his Fort Lauderdale law firm while he raised his profile with donations of hefty sums of stolen money to politicians and charities.
Rothstein sold purported confidential settlements in sexual harassment, employment discrimination and whistle-blower cases to investors dazzled by his promise of high returns. The scheme, which financed the lawyer’s lavish lifestyle, unraveled as he misappropriated new investors’ money to pay off his initial customers, agents with the FBI and IRS found.
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During six years of litigation, 29 defendants, including lawyers, cops and a reputed Italian mafioso, were convicted and sentenced on a variety of charges: from racketeering to money laundering, according to the U.S. attorney’s office in Miami.
In addition, through government forfeiture efforts as well as bankruptcy and civil actions, more than $400 million in assets were ultimately recovered, mostly in damages paid by TD Bank, where Rothstein kept his trust accounts. All of Rothstein’s investors were fully repaid.