Investors Sue Fla. Lawyer in Fraud Probe for $100M

Investors claiming they were fleeced by a high-profile South Florida attorney filed a $100 million lawsuit Friday contending that the lawyer orchestrated a massive Ponzi scheme with the help of a Canadian bank's U.S. subsidiary and several accomplices.

The 147-page lawsuit, filed in Broward County Circuit Court, alleges that attorney Scott Rothstein and others in his now-defunct firm used faked legal settlements — or faked their involvement in real cases — to promise fat returns for investors. TD Bank, the lawsuit claims, "was complicit in this scheme" by making the deals appear more legitimate and reassuring investors.

"The Ponzi scheme simply could not have gained traction without TD Bank's involvement in sanctioning, or otherwise, willingly failing to authenticate the origin of the enormous amounts of money coming through its doors," said the lawsuit, filed on behalf of six investors by attorney William Scherer. "TD Bank was the financial epicenter of the Ponzi scheme."

The lawsuit claims numerous red flags were ignored, such as the movement of some $500 million through Rothstein accounts at a TD Bank branch in Fort Lauderdale in October alone.

TD Bank, with headquarters in Maine and New Jersey, is the U.S. subsidiary of Canada's publicly traded Toronto Dominion Bank. It has about $134 billion in assets and about 1,000 U.S. branches, according to the company Web site. A bank statement Friday denied any collusion with Rothstein or wrongdoing on the part of its employees.

"TD Bank will defend against all such unfounded claims," the statement said. "The claims are solely allegations and not evidence of any wrongdoing on the part of TD Bank."

Rothstein's attorney Marc Nurik declined comment on the lawsuit.

"This is the first I'm hearing of it," Nurik said.

Rothstein, 47, has not been charged with a crime. But the FBI has estimated his scam at $1 billion and federal authorities have already seized his yacht, luxury cars and begun forfeiture proceedings on several homes and properties. The once fast-growing law firm Rothstein Rosenfeldt Adler has been dissolved and Rothstein is seeking voluntary disbarment as a lawyer.