Miami-Dade County

Ex-South Florida banker gets 2 1/2 years for role in Rothstein’s Ponzi scheme

In this July 27, 2009 photo, Fort Lauderdale attorney Scott Rothstein is shown in his office. Rothstein pleaded guilty in 2010 to federal charges that he ran a $1.2 billion Ponzi scheme.
In this July 27, 2009 photo, Fort Lauderdale attorney Scott Rothstein is shown in his office. Rothstein pleaded guilty in 2010 to federal charges that he ran a $1.2 billion Ponzi scheme. AP

Frank Spinosa was once an unassuming banker — until he crossed paths with his opposite, the brash lawyer Scott Rothstein.

Spinosa, a one-time TD Bank regional vice president in Fort Lauderdale, sought to please his seemingly deep-pocketed customer, going so far as to help Rothstein hoodwink a group of wealthy investors just before his $1.2 billion Ponzi scheme collapsed in fall 2009.

For helping craft letters falsely assuring the security of their money, Spinosa was sentenced to 2 1/2 years in prison on Friday in Miami federal court.

Spinosa, who pleaded guilty to a wire-fraud charge in October, was the last of 29 defendants to be sentenced in the sprawling Rothstein conspiracy case — a colossal crime that shook up powerful people in high places throughout the region. Rothstein himself was sentenced to 50 years on racketeering and other fraud convictions for selling fabricated legal settlements to investors from Florida, New York and Texas.

“It’s a crime that caused the community to lose faith in its institutions,” federal prosecutor Lawrence LaVecchio summed up at Friday’s sentencing.

Before he was punished, Spinosa choked up as he apologized to U.S. District Judge Beth Bloom, saying he “lost everything” — job, career, reputation and home — as a result of his criminal conduct as a regional vice president at TD Bank. “I know what I did was wrong,” he told Bloom. “I wish I could take it back, but I can’t.”

Bloom said Spinosa’s role as Rothstein’s banker was “critical” to propping up the investment scheme at the end, even if he didn’t know about the true nature of it. She said the banker’s “motivation was to please” Rothstein and that he “crossed the line” to commit fraud: “You didn’t ask the right questions. You didn’t stop. You didn’t say no.”

But Bloom also acknowledged Spinosa’s difficult upbringing in New York and the death of his first child — before deciding to shave seven months off the prosecution’s recommended sentence of 37 months. Defense attorney Sam Rabin sought 18 months.

Spinosa, who once lived in the affluent community of Weston, must surrender to the U.S. Bureau of Prisons on Feb. 18.

Spinosa was convicted of using his executive banking position to help Rothstein convince his investors that their money would be safe at the TD Bank branch in Fort Lauderdale, according to a statement filed with his plea agreement. In October 2009, Spinosa collaborated with Rothstein to craft a fictional “lock letter” guaranteeing that disbursements from their trust accounts could only be made to the lawyer's investors. Spinosa wrote a half-dozen other letters assuring his investors about the security of their funds.

It was all a lie. Rothstein treated his investors’ accounts like his own piggy bank. He not only stole their millions for his gaudy lifestyle, but also to pay off other old investors with new investors’ money.

With Spinosa’s assistance, Rothstein’s investors lost $2.4 million, according to prosecutors.

“What this case shows is that in a short period of time he did a lot of damage,” LaVecchio said. “Those letters were designed to deceive the investors into thinking that the funds at TD Bank could only be for their benefit.”

Spinosa’s attorney acknowledged his client’s crime, but also argued that he was not as culpable as others who assisted Rothstein and cut plea deals.

Rabin, however, saved his harshest criticism for Rothstein, saying he exploited the weaknesses of his accomplices. “He was the scourge of Broward County,” he told the judge. “He ruined a lot of lives.”

In late 2011, Rothstein testified during a civil bankruptcy proceeding involving his bankrupt Fort Lauderdale law firm that he paid off Spinosa. The disbarred attorney said that without help from Spinosa, his swindle would have died.

Rothstein claimed he once slid Spinosa an envelope filled with at least $50,000 during one of their regular lunch meetings at Rothstein's downtown Fort Lauderdale restaurant, Bova Prime. Spinosa helped pull off the fraud for the money and the chance to take part in the “rock star lifestyle” offered by the Rothstein Rosenfeldt Adler law firm, Rothstein alleged.

There is no reference to the alleged payoff in the charging document filed by prosecutors LaVecchio, Jeffrey Kaplan and Paul Schwartz.

Spinosa's attorney, Rabin, said at the time that Rothstein was lying, falsely accusing anyone he could of crimes in order to get his sentence reduced.

“Same con man, different motivation,” Rabin said. “The facts are Spinosa did not take part in the ‘rock star lifestyle.’’’

Nevertheless, Spinosa’s former employer, TD Bank, has lost hundreds of millions of dollars in legal battles with Rothstein's investors.

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