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Investment Scheme Ripe with Fraud

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Comic illustration by TheAmbrosinos // Flickr.com

One of South Florida’s biggest Ponzi schemes in history is just unraveling, as FBI Special Agent in Charge John Gillies released a statement Thursday morning at a news conference that Mr. Scott Rothstein’s scandal could top over $1 billion.

That’s nine zeros. NINE.

According to The Miami Herald, investigators are already receiving reports that this was certainly not a one-man show, and the Internal Revenue Service is in the process of compiling a list of hundreds of victims that were affected in this latest act of insane, gargantuan fraud.

Maybe it’s a sign of the times we live in. The largest Ponzi scheme in history was smoked out only a few months ago, leaving affected families economically disparate.

The billions invested over several years into Bernard Madoff Investment Securities, LLC were lost in days. Many of the families afflicted by Madoff’s scheme were robbed of hard-earned savings from their work over several years.

We’re talking about the retirement savings a family may put together over decades and the money for our next generation to go to college.

Complaints against Rothstein first came to light after he had not paid scheduled settlements with his investors. Prosecutors accuse him of planting an investment scheme ripe with fraud, including falsifying legal settlements and bank records to mislead his customers.

And it doesn’t end there. The Miami Herald is also reporting that Rothstein ripped off auto giant Ed More, a major legal client, and duped him into believing that he had won a case breach-of-contract case against an interior decorator when, in fact, he had lost.

The case began as a $2 million dollar dispute that quickly spiraled to a $57 million dollar bill for the Morse family. Rothstein allegedly lied to the family and told them to post the $57 million as bond before they could claim the judgment; they were told it was insurance in case bank officials transferred the money from the wrong account.

Rothstein has also reportedly duped the Levy family, owners of Renato Watches. Their lawyers said in court on Thursday that the family lost approximately $15 – 20 million in investments.

“We were friends of his in the community,” said David Mink, CEO of Renato Watches to The Miami Herald. “His law firm represented us as well.”

Mink did not disclose the terms of the agreement with Rothstein to the Herald.

“A lot of people were investing with him,” Mink said. “It seemed very legitimate. . . . Our family is definitely a victim.”

Stay tuned as the investigation unravels. One can only imagine how many more families are going to be destroyed by this hometown debacle.

November 12, 2009

Reporters

Ramon Galiana

News Editor


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