Crimewatch

MIAMI (CBS4) ― A prominent South Florida lawyer suspected of orchestrating a multimillion-dollar fraud is back in South Florida but nobody seems to know where he is. Scott Rothstein, who returned from Morocco on Tuesday, is reportedly meeting with federal investigators. Sources say he has not been taken into custody.

At the same time, Rothstein's law firm, Rothstein Rosenfeldt Adler, is up and running with founding partner Stuart Rosenfeldt as the new CEO, but with a lot less operating money.

Federal agents with the FBI and IRS were inside the law firm late Wednesday night—one source telling CBS4 about 40 agents entered the building around 6:30 pm. They might be in there through Thursday morning.

 

Agents will not discuss what they're doing there other than to say they are conducting "official business."

 

As CBS4 waited outside the building Stuart Rosenfeldt was seen speaking with federal agents. He has been retained as CEO of the law firm.


Funds for the firm went from millions to about $500,000 left in its bank account.

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

"This case has the hallmarks or red flags of what a Ponzi scheme might look like. No one has confirmed it is a Ponzi scheme, but it has all the red flags," said Jeffrey Sonn, a Fort Lauderdale attorney representing investors.

Sonn had the chance to review some of the investment documents. He tells CBS4 News that it appears investors thought they were buying into structured settlements, with the promise of making a profit.

"They can sell it to a settlement funding company that would get an investor to buy that settlement payment for cash, so that the litigant can get their money now, rather than later," explained Sonn.

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. 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.

Rothstein returned Tuesday from Morocco and met with federal investigators, according to government officials and attorneys involved in the case.

Hours later, a Broward judge placed the embattled law firm into the receivership of retired Miami-Dade Circuit Court Judge Herbert Stettin. Final touches are now being put on that receivership agreement. Stettin will handle financial matters, security of the building and access to files. Forensic accountants will look at the books and see what they reveal.

While Rothstein was in Morocco, he reportedly sent his partners a text message apologizing. It also suggested he might not return to face authorities and indicated his was contemplating suicide.

Rothstein called himself a fool in the message, first reported by the South Florida Sun-Sentinel.

According to the Sentinel, this is what the text messages said: "Sorry for letting you all down. I am a fool. I thought I could fix it but got trapped by my ego and refusal to fail and now all I have accomplished is hurting the people I love. Please take care of yourselves and please protect Kimmie (Rothstein's wife). She knew nothing. Neither did she nor any of you deserve what I did. I hope God allows me to see you on the other side. Love, Scott."

The Sentinel is not identifying the source that gave them the text messages, but did say it was someone from within the firm.

If the allegations against Rothstein are true they would mark an incredible fall for a man who just a few months ago seemed very much in control of the political world around him.

A major fundraiser for Gov. Charlie Crist and John McCain during last year's presidential race, his firm had grown from just a handful of attorneys in 2002 to more than 70 in offices throughout Florida and in Washington.

Rothstein also has contributed to numerous charities, including a foundation for children and youth run by former Miami Dolphins star Dan Marino and former Miami Heat star Alonzo Mourning.

Rothstein has considerable personal wealth, and owns a $6.4 million home in Fort Lauderdale, properties in Manhattan and along Rhode Island's coast, and a large collection of expensive cars, including a Rolls-Royce and a Bentley.

The well-connected attorney was protected around the clock, until Monday, by off-duty Fort Lauderdale police officers. That assignment, which was paid for by Rothstein, has now been canceled by top officials at the police department, a spokesman said.

Also Tuesday, politicians and political parties that received contributions from Rothstein started giving back some or all of the donations.

Among them: Gov. Charlie Crist, state Chief Financial Officer Alex Sink, Senate President Jeff Atwater, Rep. Ellyn Bogdanoff, the Florida Democratic Party and the Republican Party of Florida.

CBS4's Ted Scouten, Jim DeFede, Dave Game, Jasmine Kripalani, Carey Codd, Lisa Cilli and Daniel Lastra contributed to this report.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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