South Florida Ponzi scheme leads to 50-year prison sentence on fraud in racketeering charges

Scott Rothstein, the admitted mastermind of a $1.2 billion South Florida Ponzi scheme, has been sentenced to 50 years in federal prison after being convicted of fraud charges in Miami.

The deteriorating economy has forced many of these schemes to come to light, as plummeting stock values and real estate losses stemmed the flow of cash available to continue the scams. As we reported recently on our Miami Criminal Attorney Blog, more than $1.2 billion in claims have been filed against Rothstein’s estate, which is valued at less than $500 million. Hiring an experienced Miami attorney is critical for South Florida victims seeking to recover losses in the wake of an investment scam. Additionally, as the government continues to aggressively pursue such cases, more and more defendants are finding themselves in legal trouble as a result of bad investments or soured real estate deals; in those cases, hiring an experienced Miami defense lawyer is vital to protecting your rights.

Known as the “Bernie Madoff of South Florida,” Rothstein pleaded guilty in January to fraud and racketeering charges in connection with a scheme that duped investors into buying shares in the settlements of non-existent court cases, according to CNN.

Rothstein, 47, told potential investors they could buy the settlements of court cases at steep discounts in exchange for payment of a lump sum to clients who did not want to wait for their money. Sophisticated investors, including hedge fund managers and trust directors, were victimized as well as friends and other less sophisticated acquaintances of Rothstein’s. The scheme collapsed in October when he ran out of money to pay investors. Authorities say he wired $16 million to an offshore bank account and fled to Morocco by private jet. He returned several weeks later to face the charges.

The Miami Herald reported that the judge slapped Rothstein with 10 more years than prosecutors had sought and two decades longer than the 30 years defense attorneys had requested.

He has surrendered millions of dollars in property, including cars, yachts and houses. But the sale of assets has fallen far short of the money owed to investors. CNN reports that more arrests are expects as the IRS and FBI investigation into the scam continues.

The Herald reported that Rothstein has cooperated with authorities in identifying members of organized crime and will enter the witness protection program. The chief operating officer at his former firm is scheduled to plead guilty this week to money-laundering conspiracy.