Politics

FORT LAUDERDALE (CBS4) ― Alan Sakowitz is a savvy attorney and businessman.
 
Months ago, he learned of a possible investment opportunity with high-profile Ft. Lauderdale lawyer Scott Rothstein.

Sakowitz sat down with Rothstein to consider the investment.

"I see myself in a legitimate law firm with great lawyers and then everything else that's going on doesn't make sense," Sakowitz told CBS 4 News.

Sakowitz said the investment plan Rothstein showed him was simply too good to be true. The plan was for Sakowitz to purchase structured legal settlements in sexual harassment and whistle blower cases. Sakowitz said Rothstein promised him a minimum return of 36% within 3 months.

"We're going to be buying settlements before a lawsuit's filed from some of his clients, so I wanted to see the settlement," Sakowitz said, describing his conversation with Rothstein. "I wanted to talk to the client. I wanted to talk to the lawyer that handled case and when they wouldn't give me anything, I figured show me the time card so I know this is real, you're not making this up."

But Sakowitz said Rothstein refused to do that. Sakowitz said he did not believe the figures Rothstein was telling him.

"By the end of our conversation, he said they settle 3,000 cases a year without filing a lawsuit and the minimum case he settles for is $500,000," Sakowiotz said. "I know that's not real. I know no law firm settles a billion and a half dollars on the low end without ever filing a suit."

The investment apparently worked like this: The defendant in a civil case settles for $900,000. That money is to be paid to a plaintiff. But the plaintiff needs money now so he or she sells the settlement to an investor for a lump sum of $660,000.

Then the defendant pays the investor $300,000 per month for 3 months. So, the investor is actually paying $660,000 and receiving $900,000 in return. 

But the allegations are that were no cases -- that Rothstein made everything up.

"They made up phony names and phony attorney names," Sakowitz said.

Sakowitz walked away.

"You can't make a 100 percent on your money with no risk. That's the bottom line in investing. You can't make 100% with no risk," he said. "It sounded way too good to be true and way too bizarre besides."

But the conversation and the business plan lingered with Sakowitz and he decided to do something about it.

"Where I know for a fact that he's selling something that doesn't exist, I figure I have an obligation to protect the public so I went to the FBI," he said.

The FBI began investigating. But for a while Sakowitz said he was looking over his shoulder.

"When you're sitting in Scott's office, you understand from him that he has the politicians in his pocket and he has law enforcement in his pocket," Sakowitz said. "I have a wife and five kids but at the same time I couldn't sit there and do nothing."

Federal agents with the FBI and IRS were inside the Rothstein 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.

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