Scott Rothstein, a lawyer from Florida who was sentenced to spend fifty years in jail for having carried out a Ponzi scheme of $1.2 billion, stated that he had help in doing it. He said that officials in 3 hedge funds being operated in Manhattan aided him in carrying out the fraud. A court deposition transcript indicated that their help was provided in the last few months of the scam.
Scheme Fell Apart when Rothstein was Unable to Pay
According to Rothstein, his scheme started falling apart when he was unable to pay customers. This happened in 2009. In court, he testified that Level 3 Capital Fund, LLC, Platinum Partners Value Arbitrage and Centurion Structured Growth agreed that they will not inform potential investors of the fact that Rothstein had not paid them.
The scheme was developed to bring in new money that would allow Rothstein pay off the companies. The attorney, who has now been disbarred, was questioned regarding the way the scheme worked and the people who were aware of it. This was done because victims generally seek compensation from companies and people who know about the fraud.
Rothstein Hopes to get a Reduced Sentence
Rothstein stated that he hopes to get a reduced sentence. He is aware that this will require that he is honest about the scheme. So, he has spoken to prosecutors about all those involved in the scheme. This includes the police officers that he bribed.
As Rothstein had stopped paying the companies, a recommendation letter from them would have been a false one. The chief investment officer at Platinum and a portfolio manager had agreed to help him. Rothstein clarified that his biggest concern was that the companies would lie. According to a spokesperson for the funds, they did not provide false statements about the fraud. He stated that the funds were not part of the conspiracy.
Call Attorney Christopher Morales, a specialist in law, if you want a consultation regarding White Collar Crimes in San Francisco.
