Former lawyer Scott Rothstein was sentenced to 50 years in federal prison Wednesday for using his Fort Lauderdale law firm to run a $1.2 billion Bernie Madoff-style Ponzi scheme that brought him yachts and sports cars and allowed him to make sizable contributions to Florida politicians.
Rothstein had faced up to 100 years behind bars after pleading guilty in January to two counts of fraud and three counts of conspiracy. The sentence imposed by Judge James Cohn, however, is ten years more than prosecutors requested, and 20 years longer than the term Rothstein had hoped to receive because of his reportedly extensive cooperation with federal investigators.
Rothstein had cited his assistance to authorities in a plea for leniency filed last week, and prosecutors still have the option of asking that his sentence be reduced if he continues to help investigators. "I don't expect your forgiveness," Rothstein told the court Wednesday, and said he would do "everything in his power" to help investors recoup their losses.
In a statement, U.S. Attorney Wilfredo Ferrer said that the "rags-to-riches-to-jail saga" of Rothstein, who rose from blue-collar roots in the Bronx to the society pages of South Florida, was a "humbling reminder of what can happen when greed and ambition run amok."
"Today's sentence punishes the defendant for his thievery," said Ferrer, "and hopefully brings some sense of justice to the victims of this massive fraud."
Rothstein admitted that he ran a scam that involved selling shares in fake lawsuit settlements, promising investors they would reap rewards with the cases were settled. He created false bank documents and phony settlement agreements to dupe investors. In a classic Ponzi scheme, he used funds for new investors to pay off old investors. Rothstein's scheme destroyed his law firm, Rothstein Rosenfeldt Adler, which once employed more than 70 lawyers and is now defunct.
"Unfortunately today's sentencing does not immediately offer complete financial restitution for the victims of South Florida's largest Ponzi scheme," said Daniel W. Auer, Special Agent in Charge of the Criminal Investigation Division of the IRS in Miami. "Victims can rest assured that IRS-CID, together with our law enforcement partners at the U.S. Attorney's Office and the FBI, will continue to relentlessly pursue forfeiture proceedings relating to Rothstein's criminally-derived assets."
The scam began to unravel in late 2009. In October, Rothstein flew to Morocco without his wife. The Florida Sun-Sentinel reported that four days later, he texted partners at his law firm, saying he wouldn't see them 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 [my 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."
While Rothstein was out of the country, a Florida newspaper confirmed that investors had contacted federal prosecutors about his investment business, and that his law firm had contacted outside counsel.