Disbarred Attorney Scott Rothstein, 47, Arrested by FBI on Racketeering Charges, Accused in a $1 Billion Investment Scam

Another one bites the dust. Scott Rothstein, a flashy Fort Lauderdale attorney, has surrendered to FBI agents this morning, on a federal racketeering charge. Authorities have said he ran a $1 billion investment scam while acting like a philanthropic tycoon. Rothstein, 47, had fled to Morocco in late October but returned in early November. He is set to appear at 11 a.m. before U.S. Magistrate Judge Robin Rosenbaum to face the RICO conspiracy charge at the federal courthouse in Fort Lauderdale. He was processed by the U.S. Marshals around 8:30 a.m. in Fort Lauderdale. The irony here is that he befriended high-profile figures from Gov. Charlie Crist and NFL Hall of Fame inductee Dan Marino. He has been accused of stealing hundreds of millions of dollars from his investors. With the wealth and philanthropy he was able to forge well-oiled connections with the "right" people in Broward County's society scene and business community to lure the wealthy and other patrons to invest with him.

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.

Here's how authorities say Rothstein's scheme worked: Investors would make an upfront payment at a discount to a plaintiff in a lawsuit who was expecting a series of settlement payments from the defendant over months or years. The investors would later receive the full settlement amount at a hefty profit.

In a 2008 prospectus for investors -- who were required to put up a minimum of $1 million each -- Levin said Rothstein was offering a slice of a ``largely untapped market'' in settlements in multimillion-dollar employment and sexual harassment lawsuits. Their value, Levin said, was in their secrecy, suggesting a defendant would pay a premium for a plaintiff's silence. Source: Miami Herald

His date with Lady Justice is far from over with his surrender. The U.S. attorney's office will convene a grand jury to consider criminal charges against Rothstein's alleged co-conspirators, which could include former employees of his now-defunct firm. Prosecutors are using the Racketeer Influenced and Corrupt Organizations Act to charge Rothstein and possibly others. The conspiracy law was passed by Congress to battle the Mafia and others involved in criminal enterprises. Rothstein has been disbarred. He is accused of mail, wire and bank fraud, along with money laundering. He faces at least 20 years in prison and forfeiture of tens of millions of dollars in illegal profits if convicted. I guess the question I have is, who helped Scott Rothstein to flee the country and try to cover his tracks? Gov. Crist must be kicking himself in the pants to have rubbed shoulders with this criminal.