Prominent Fort Lauderdale lawyer Scott Rothstein no longer with Rothstein, Rosenfeldt and Adler law firm: Retired Miami-Dade judge appointed as financial overseer of the 150-employee firm that its attorneys say only has $500,000 in its operating accounts
By Jon Burstein, Paula McMahon and Brittany Wallman
Sun-Sentinel, November 3, 2009
FORT LAUDERDALE - Attorney Scott Rothstein returned to Fort Lauderdale on Tuesday after contemplating suicide amid mounting allegations that he misappropriated hundreds of millions of dollars from an investment business he covertly ran out of his law office.
Stuart Rosenfeldt, the president of the Rothstein, Rosenfeldt and Adler law firm, said he was told that Rothstein met with federal prosecutors after his chartered plane landed at Fort Lauderdale Executive Airport.
Rothstein's arrival came four days after he sent a desperate text message to his law firm's five partners indicating they wouldn't see him again.
"Sorry for letting you all down," he wrote. "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."
For much of Tuesday afternoon, speculation ran rampant over where Rothstein would show up. Within 30 minutes of his plane touching down, Fort Lauderdale police officers, some wearing bulletproof vests, surrounded every entrance of the downtown tower housing the law firm. Rothstein did not appear.
Nor did he show up at a late-afternoon court hearing in which a retired Miami-Dade judge was appointed as the financial overseer of the 150-employee law firm that its attorneys say only has $500,000 in its operating accounts. That's barely enough to cover the next paychecks of staff and clerical employees. Many of the firm's remaining attorneys have agreed to waive their salaries for now.
"We've been learning more by the hour, and by the hour, it's getting worse," said Kendall Coffey, the former U.S. attorney who is representing the law firm. The law firm filed suit against Rothstein on Monday, accusing him of misappropriating money from an investment business he ran out of his private office.
Within the past year, Rothstein has had a meteoric rise in South Florida's political, business and nonprofit worlds, spending millions during a recession that forced other local law firms to make cutbacks.
For the first time on Tuesday, more details began to emerge about just how much money was sunk into Rothstein's investment business, which guaranteed a minimum of 20 percent investment returns in as little as three months.
Banyan Income Fund, a Fort Lauderdale-based hedge fund, invested at least $300 million with Rothstein, according to sources with knowledge of the firm's business.
Fort Lauderdale attorney William Scherer confirmed he is representing clients who lost $72.5 million. Miami attorney Mark Raymond said he has spoken to a group of New York investors who are out $36 million.
In addition, the first investor lawsuit was filed Tuesday against Rothstein, Rosenfeldt and Adler by an Aventura company that says it lost more than $3 million.
"We have very little sense (of what's happening) other than clearly something has gone very wrong," said attorney Alexandra Sanchez, who is representing FDS Investments USA LLC.
Investors over the weekend began raising questions about what happened to their money. Rothstein's whereabouts during those tumultuous days remained a mystery, and even his attorney said he didn't know where in the world his client was.
Rothstein's law partners all got the Oct. 31 text message, and Rosenfeldt talked to Rothstein, urging him to "choose life."
Rothstein said he had three options--kill himself, live life "on the lam as a fugitive" or go to prison and risk being killed there because he has made enemies, Rosenfeldt said.
Rothstein returned about 12:50 p.m. Tuesday, landing in a chartered jet at Fort Lauderdale Executive Airport. Flight tracking records show that about the time Rothstein arrived at the airport, a chartered Gulfstream V jet from Casablanca, Morocco, touched down. The same jet flew from Fort Lauderdale to Casablanca on Oct. 27.
Rothstein's attorney, Marc Nurik, could not be reached to comment Tuesday night. Nurik had vowed that Rothstein "would straighten this thing out" once he returned.
Fort Lauderdale police surrounded the office tower housing Rothstein's law firm after receiving a call that lawyers there had "some concerns about their safety," said Sgt. Frank Sousa, a Fort Lauderdale police spokesman.
"Better safe than sorry," said Rosenfeldt about his firm's call to police.
A few hours later, Streitfeld named retired Miami-Dade Circuit Judge Herbert Stettin to be the firm's receiver, responsible for approving the firm's day-to-day financial decisions. Rosenfeldt will be responsible for the firm's legal decisions.
The ruling freezes Rothstein out of the firm.
"He has twice chosen not to appear (in court), he has in my opinion, for now, relinquished his authority," Streitfeld said.
Or as Coffey later said, "He is O-U-T, out of the picture."
Staff writers Sally Kestin, Peter Franceschina, Scott Wyman and Joel Marino contributed to this report. Jon Burstein can be reached at email@example.com or 954-356-4491.