Carey Codd Broward County

We learned today -- no surprise here -- that the Florida Bar began pushing for the disbarment of disgraced Ft. Lauderdale attorney Scott Rothstein on November 5th.

The Florida Bar filed a petition with the Florida Supreme Court this morning to have Rothstein disbarred.

Rothstein consented to give up his law license, admitting -- among other things -- that he failed to comply with with Bar rules regarding trust accounts.

Rothstein agreed to stop practicing law as of November 15. He will be charegd $1,250 to pay for the disbarment proceedings.

The lawsuit filed today by attorney William Scherer on behalf of several investors is a treasure trove of information about Rothstein allegedly planned and operated his Ponzi scheme.

For instance, the lawsuit alleges that Rothstein claimed to be representing plaintiffs in 450 wrongful death cases against Chiquita Brands International. Rothstein claimed that each of the cases would settle for $2 million and Rothstein was trying to line up investors to fund money to the plaintiffs upfront. In exchange for the plaintiffs taking a reduced lump settlement, the investors would then earn 20-40% by receiving the entire settlement over a 3-9 month period.

In an email attached to the lawsuit dated October 14, 2009, Rothstein told Doug Von Allmen and Dean Kretschmar that he had a "call with chiquita counsel in one hour."

The problem was -- according to the lawsuit -- Rothstein did not represent any of the plaintiffs and had absolutely no involvement in the Chiquita case.

Von Allmen and Kretschmar are two of the people suing Rothstein and a number of alleged co-conspirators including law firm employee Debra Villegas,  law firm general counsel David Boden and Andrew Barnett, Director of Corporate Development. The suit also names TD Bank and three bank employees, including Frank Spinosa, senior vice president of bank operations.

The lawsuit is 147 pages with a ream of attachments. I'm digging through it and hope to have more in a bit.

Broward Sheriff's Officials are hopeful the Prescription Drug Monitoring Program created by state legislators this year will curb much of the doctor shopping and illegal prescription trade.

However, there are concerns about whether there will be enough money in the budget and enough outside funds from grants to pay for it.

In the meantime, BSO continues to crack down on prescription drug deals and has two other plans in the works.

The first is asking Broward cities to put a moratorium on opening pain clinics in their city limits. I'm told Oakland Park passed such an ordinance last night. Dania Beach has a similar law.

The other push will begin next month when BSO asks residents to turn in unwanted or unused prescription drugs. In return, residents will get a gift card. The goal is to try and get prescription drugs out of medicine cabinets and into the garbage.

An investor in Scott Rothstein's business filed suit today in federal court and his lawsuit is the first to name TD Bank as a defendant.

Todd Snyder, founder and president of Miami-based Tech Optics Inc., claims he invested $2.1 million with Rothstein on October 23. Snyder believed his money would kept in a separate trust account at TD Bank. Snyder is asking for his money back.

Rothstein is accused of operating a Ponzi scheme worth potentially $1 billion dollars. The scheme surfaced just days after Snyder made his investment.

According to Snyder's attorney, Cary Lubetsky, his client was introduced to Rothstein's investment by a third party. Snyder never dealt with Rothstein directly.

It appears due to the timing of Rothstein's departure to Morocco in late October and the revelations about the alleged Ponzi scheme just days later, Snyder's money remained in the trust account and was not used. Lubetsky wants to get his clients money back before it gets turned over to investors as part of the bankruptcy proceedings.

In an exhibit attached to the lawsuit, Andrew Barnett wrote on Rothstein's law firm letterhead, "This is to confirm that Todd Snyder is a client of the firm and that the funds are being used for a transaction involving Mr. Snyder."

Published reports indicate that Barnett is the son of a Ft. Lauderdale socialite who also claims to lost money to Rothstein.

TD Bank continues to be part of the story because the bank held the trust accounts for Rothstein clients. The bank is investigating how the investor's money allegedly wound up in Rothstein's hands.

As for the Snyder lawsuit, TD Bank spokesperson Rebecca Acevedo said in a statment, "Due to customer privacy issues we can not comment specifically about customer accounts or pending litigation regarding customer accounts. However, it appears that this is a lawsuit between an investor, Scott Rothstein and the RRA firm. TD Bank is named in the suit solely because funds are alleged to have been deposited into an alleged RRA firm account at TD Bank. TD Bank will continue to be open and transparent, consistent with the law, and will comply with any order entered by the court."

The Broward Sheriff's Office just charged a fourth man -- Brandon Edwards -- in the murder of Craig Cohen and beating of David Villanova.

This is interesting because we knew Edwards was a suspect in the attack but had never been charged. In fact, according to investigative reports, it appeared that Edwards was cooperating with detectives and providing them information on what happened on April 6 in Oakland Park when Cohen and Villanova were attacked and beaten.

Also today, BSO is saying that the attack on Cohen -- who was openly gay -- was not motivated by his sexual orientation. Villanova is also gay.

"In the weeks following the attacks, there was some speculation as to whether they had been fueled by hate and perpetrated because the victims were both gay men. However, detectives have determined that the sexual orientation of the victims didn’t factor in when their attackers were planning or committing the crimes,” said Commander Rick Wierzbicki of BSO’s Hate Crimes Task Force. “Cohen and Villanova were innocent victims, chosen simply because they were alone and defenseless.”

While BSO was investigating the Cohen case, they came across an online video showing Edwards and three other young men allegedly beating a homeless man. CLICK HERE TO SEE THE STORY.

All three of the men in the video and a fourth man behind the camera are charged in that case.

 

Last year, Scott Rothstein announced to great fanfare that he was donating $1 million dollars to Holy Cross Hospital through the Rothstein Family Foundation.

This afternoon Holy Cross announced they are returning the donation.

"In light of the recent allegations surrounding Scott Rothstein, Holy Cross Hospital has concluded that it should not retain the funds recently gifted to it by the Rothstein Family Foundation," the hospital said in a statement.

The hospital said the money will remain in a trust account until the hospital receives direction on how to disburse the money.

The man appointed to oversee the remains of the Rothstein Rosenfeldt Adler law firm is giving us a window into who's left at the firm and the amount of money the firm is spending.

According to a court filing, at least 14 "critical employees" remain at RRA. Their positions and daily rates are part of the motion filed in court requesting payment for the employees. There may be more people working at the firm but they may not be drawing a paycheck or they may not be named in the filing.

There are 3 Legal Assistants, 2 IT employees, an attorney, an accountant, a paralegal, a receptionist, and several other workers.

According to the receiver, these employees collectively earned $18,177 for their work the week of November 4-10. The receiver is requesting approval from the bankruptcy judge to pay the workers.

We have also learned that as of last Wednesday, RRA had $3.8 million dollars. The receiver controlled $941,000. The rest is in trust accounts although the receiver is not sure if they are truly trust accounts based on allegations that attorney Scott Rothstein may have looted the trust accounts as part of an alleged Ponzi scheme.

RRA is racking up other bills. The receiver -- former Miami-Dade County Judge Herbert Stettin -- writes that the firm owes $17,765 in receiver's fees and more than $68,000 in fees and expenses for a forensic accounting firm.

The firm hired to handle RRA's voluntary chapter 11 filing is owed $83,000 in fees.

Will Scott Rothstein sit for a deposition in the bankruptcy case surrounding his law firm, Rothstein Rosenfedlt and Adler?

That is the request of attorneys representing three investors who claim they lost money in Rothstein's alleged Ponzi scheme using structured settlements. The feds believe Rothstein may have swindled investors out of as much as $1 billion dollars in a scheme that began back in 2005.

Attorney John Genovese requested that the depo of Rothstein be held this Thursday morning at his law office. According to the court filing, "(T)he examination is being taken for the purpose of discovery, for use at trial...or for such other purposes as are permitted under the Federal Rules of Bankruptcy..."

A bankruptcy expert told me this is pretty standard stuff and, in most cases, the person being deposed would have to show up. However, the expert said it's possible Rothstein's lawyer would ask for the depo to be postponed since it is so early in the case. Clearly, there might also be issues and details that Rothstein will not want to discuss as the feds continue to investigate him.

Rothstein's attorney Marc Nurik told me he plans to file a response to the depo tomorrow, adding "We don't anticipate (the deposition) going forward."

As for the investigation into Rothstein, Nurik told me he has no idea of the time frame the federal authorities are working on. He also reiterated that Rothstein has never spoken to the feds about the case.

Also, in another public sign of the demise of the Rothstein Rosenfeldt Adler law firm, the firm's name has been taken off the Bank of America sign.

One of the many questions remaining to be answered in the Scott Rothstein saga is did anyone else at the Rothstein Rosenfeldt Adler law firm know what Rothstein was allegedly up to when he peddled his investment business to clients?

According to attorney William Scherer, who represents about a dozen investors who lost about $100 million dollars, at least one of his clients said there were other people from the firm present when they were pitched by Rothstein.

Scherer said his client showed him one of the firm's glossy brochures and told him, "When Rothstein pitched this thing to me this guy was there, this guy was there, this guy was there."

Scherer refused to tell me which people from the firm were in the room.

Last week Scherer filed suit on behalf of a group of investors known as D3 Capital Club, saying they put $13.5 million into Rothstein's alleged Ponzi scheme. Scherer told me his research shows that by October Rothstein's scheme was imploding and he was putting on a hard sell for new money to replace the old money. Scherer estimates his clients invested $50 million with Rothstein in October alone.

"The staggering weight of this thing had to collapse," Scherer said.

Since this story broke two weeks ago, Scherer has been talking about the alleged involvement of people at TD Bank, where investor's accounts were held. Scherer explained to me today that by his calculations, $500 million flowed through the bank within about 18 months. Scherer said that is an enormous sum for a law firm.

"Our $50 million flew through there supersonically," Scherer said.

Scherer believes that should have set off alarm bells for bank officials. He's trying to find out if it did and what was done about it.

Scherer believes this is proof -- as the FBI said on Thursday -- that Rothstein did not act alone.

A TD Bank spokesperson said the bank did nothing wrong with regards to Rothstein's firm.

One other update -- Scherer said he believes there were only about 375 total investors -- not the thousand or so that some believed.

At least nine Ft. Lauderdale Police Officers say Scott Rothstein's law firm -- Rothstein Rosenfeldt Adler -- either did not pay them for recent security details or the checks from the firm bounced.

In emails received through a public records request, the issue surfaced last week -- on Wednesday -- as the details of Rothstein's alleged Ponzi scheme were coming to light.

The records show FLPD Sgt. Steve Greenlaw contacted RRA attorneys Stuart Rosenfeldt and Grant Smith regarding checks from Oct. 18-24 writing, "Numerous officers have advised either the banks will not honor the checks or the checks are bouncing."

Greenlaw also inquired about checks for Oct. 25-Nov. 2, writing that RRA employee and former Broward County Sheriff Ken Jenne "advised me they are working on issuing those checks ASAP."

Rosenfeldt responded via email an hour and a half later saying, "We are asking the Receiver to permit these payments."

Four days later, the FLPD Sgt. followed up asking for any updates.

Rosenfeldt responded four minutes later saying, "I am asking the Receiver to keep your officers and what is owed them as high on the list as he can. I truly regret that they were not paid."

An undated memo or email from Greenlaw shows that 9 FLPD contacted him regarding bounced checks from RRA. Sgt. Greenlaw writes, "We apologize again but it is out of our control."

According to Sgt. Frank Sousa, the issue has nothing to do with the Ft. Lauderdale Police Department. "The officers are individual entities," Sousa told me.

Sousa did not know how much money the officers are owed but he said the officers are working with the receiver to get their money.

I did learn that Rothstein has been hiring FLPD officers to provide security at his law firm, restaurant and house at various dates since the beginning of 2009.

I have a call into the Receiver -- Herbert Stettin -- to find out how much money the officers are owed and the time frame for receiving their money. I am awaiting a call back.