Scott Rothstein, the flashy Fort Lauderdale attorney who authorities say ran a $1.2 billion investment scam while acting like a philanthropic tycoon, faces up to 100 years in prison on federal racketeering, conspiracy and fraud charges.
Rothstein, who had fled to Morocco in late October but returned in early November, was arrested early Tuesday by federal agents and pleaded not guilty to the five charges, including a RICO conspiracy starting in 2005.
U.S. Magistrate Judge Robin Rosenbaum ordered that Rothstein, 47, be held before trial at the government's request, citing a risk of flight. The defendant and his attorney did not contest it. Assistant U.S. Attorney Paul Schwartz not only highlighted Rothstein's Ponzi scheme but also addressed the lawyer's fraudulent representation of car-dealership mogul Ed Morse. Schwartz accused Rothstein of forging the signatures of federal and appellate judges to bilk Morse out of $57 million arising from a contract dispute with interior decorator -- using that money to perpetuate his investment scam.
Rothstein, whose hands were cuffed in front of him, wore blue jeans and a brown and black T-shirt, exuding a casual and confident demeanor. When Rothstein sat down in court, he leaned back and swiveled in his chair and surveyed the rows of federal agents and reporters crammed into to the courtroom. He smiled at several points and winked at a reporter as he was escorted out of the courtroom by U.S. marshals.
He was processed by the U.S. Marshals around 8:30 a.m. in Fort Lauderdale.
While under federal watch in November, Rothstein cooperated with prosecutors and provided them with details of his Ponzi scheme, involving the sale of fabricated legal settlements to wealthy investors. FBI and IRS agents also raided his Fort Lauderdale law office and seized his waterfront home and other assets.
Stuart Rosenfeldt, co-owner of Rothstein's law firm, said Tuesday morning he was relieved to hear that his former law partner and friend had been arrested.
``I'm just relieved,'' he said. ``It's bothered me that he did such bad things and appeared to be free.''
Rothstein could not be reached for comment on Monday, and his attorney, Marc Nurik, declined to say anything about his client's imminent arrest.
Florida Republicans have been reeling since the disclosure of his billion-dollar Ponzi scheme just weeks ago. Rothstein lavished huge contributions on many of the state's top Republicans, including Gov. Charlie Christ. Note that the feds didn't blink in seizing the assets of Rothstein weeks before filing formal criminal charges against him.