Prosecutors Removed Reduced Recommendation for Ponzi Schemer Scott Rothstein

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Summary: Federal prosecutors claim notorious Ponzi scheme mastermind Scott Rothstein lied to them and does not deserve a reduced prison sentence.

Federal prosecutors filed court records Tuesday claiming Ponzi scheme mastermind Scott Rothstein knowingly lied to them, thus does not deserve any reduction in his sentence. Rothstein was sentenced to 50 years behind bars after pleading guilty to several charges related to his Ponzi scheme that derailed in October 2009.

  

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An attorney at the time, Rothstein was operating a $1.4 billion fraud scheme from his Fort Lauderdale law firm office. Now disbarred, Rothstein had originally cooperated with prosecutors during the investigation so they were planning on recommending a reduced sentence. They withdrew that offer under the belief that he lied to them.

Prosecutor Lawrence LaVecchio wrote, “In the judgment of the United States, the defendant provided false material information to the government and violated the terms of his plea agreement. Therefore, in the exercise of its sole discretion, the government moves to withdraw the previously filed motion.”

No details were provided but they have previously stated that Rothstein hid some of his assets. They also said previously in court that his now ex-wife, Kim Wendell Rothstein, had tried to hide over $1 million in assets, mostly jewelry, from them. They convicted her of that, of which she served over 15 months in federal prison. They uncovered the false testimony during the investigation and were able to seize the hidden property.

The defense attorneys for around 30 defendants also convicted of related crimes said Rothstein was giving misleading testimony about their clients. He gave sworn depositions over the course of several days about his conduct as well as the conduct of several others. He testified during the trial of his former employee Christina Kitterman, who was convicted and still behind bars.

The 55-year-old Rothstein is serving his sentence in the federal Bureau of Prisons’ top secret witness protection program for inmates. He is serving his sentence there because he helped arrest and convict at least one defendant with Mafia ties. He pleaded guilty in 2010 to racketeering, money launder, wire fraud conspiracy, mail fraud conspiracy, and two counts of wire fraud.

Federal prosecutors can make recommendations if a prosecutor cooperates but it is at their “sole discretion.” Fred Haddad, a veteran criminal defense attorney that knew Rothstein, said, “I think it’s over for Scott. If you make a cooperation agreement with the feds, you have to be 100 percent in. You can’t go down that slippery slope and start lying to them.” He added, “He violated his agreement with the feds and they won’t take that. It’s their integrity and their reputations at stake and they are not going to let a defendant lie to them. That’s explained very clearly going in to the agreement.”

Kitterman’s attorney Valentin Rodriguez was pleased with the prosecutor’s decision. Rodriguez said, “He lied to prosecutors when they debriefed him and you just can’t do that when you have a cooperation agreement. When he testified in Christina’s trial, he was not humble at all, he was proud of what he did. He kind of boasted about how he corrupted the whole system. He was thumbing his nose at the entire justice system and you can’t expect to be rewarded for doing that.”

The only reduction Rothstein can hope for now is for good behavior while in prison. Federal inmates can receive 15 percent time off. With that reduction, he may only have to serve just over 42 years. He would be eligible for release sometime in 2052 when he is about 90 years old.

Do you think Rothstein’s sentence is fair for his crime? Tell us in the comments below.

To learn more about Scott Rothstein’s case, read these articles:

• Florida Man Convicted of Murdering Rothstein Law Partner
• Steven Lippman, Scott Rothstein Partner, Charged in Scheme
• Scott Rothstein Requests Disbarment

Photo: washingtontimes.com