Fort Lauderdale, Florida attorney Scott Rothstein was arrested Tuesday on charges of racketeering, conspiracy to commit money laundering, conspiracy to commit fraud, and two counts of fraud for his role in allegedly orchestrating a $1.2 Billion Ponzi scheme. Acting U.S. Attorney Jeffrey H. Sloman said, “Attorneys, like elected officials, hold a special position in society and owe a duty to deal honestly with their clients and their clients’s best interests.”
Rothstein is alleged to have spent large sums of the Ponzi scheme’s illegal proceeds on everything from political contributions, to luxury sports cars, mansions, new business ventures, and charitable donations.
It is also alleged that Rothstein and his co-conspirators compelled employees at his law firm to give political contributions which would later be reimbursed by the firm in the form of bonuses. This scheme is particularly troublesome, if true, because it would show a clear intent to sidestep campaign finance laws. Whether some politicians were aware of the scheme is still unknown.
Regardless, there is no doubt that the fall-out from this Fort Lauderdale-made-for-tv-melodrama is going to be widespread.
It is doubtful that Rothstein acted alone or acted only with small-time, no name cohorts. In an effort to save his own skin, Rothstein is expected to have already “spilled the beans” on more than a handful of people, including those in high power positions. While yet to be confirmed, many speculate that some local bank executives and power brokers were in on the take as well.
For those who think Rothstein’s arrest marks the end of a bizarre and seemingly inexplicable skyrocket to success for a lawfirm of but 70 lawyers, many believe it is only the beginning. Which politicians will be unseated for violating campaign finance laws? Who among Fort Lauderdale’s elite will fall from grace? What about the yet unresolved homicide prosecution surrounding the murder of Rothstein’s associate Melissa Britt Lewis?
Here’s a prediction: Rothstein’s partners will lose their licenses to practice law as well. Everyone in town is still wondering how Rothstein’s equity and name partner allowed him to control the firm’s finances without any oversight. In the world-wide history of business partners, who ever heard of such a thing? Especially in a business so strictly regulated and supervised as the practice of law – just one sidestep and an attorney can be at risk of losing his or her license forever.
Hopefully the Florida Bar will take this case as an opportunity to evaluate the ethical implications of partnerships amongst lawyers and their ramifications to clients, the public, and overall confidance in what is supposed to be an honorable profession.
In any event, like you, I sit with bitten nails and a sour stomach as I await the next automatic update from Google news!