By Jon Burstein, Sun-Sentinel
December 31, 2011
For more than 70 hours, billion-dollar fraudster Scott Rothstein talked and talked, answering questions for the first time under oath. He mapped out how he constructed the largest financial swindle in South Florida history, leveled damaging accusations at people he said broke the law with him and hinted at how his own crimes went well beyond stealing money.
So what was revealed about Rothstein, his $1.4-billion fraud and what's to come in the sensational case that continues making headlines? Here's a rundown of the more than 2,500 pages of transcripts released so far from the imprisoned con man's recent closed-door testimony in a Miami federal courtroom:
Q: What has Rothstein said?
A: In a nutshell, that he had a lot of help pulling off his Ponzi scheme. There were those who actively participated and others who knew he was breaking the law and did nothing to stop him. Likewise, he claimed banks where the proceeds of his fraud flowed — TD Bank and Gibraltar Private Bank & Trust Co. — did nothing to stop him, even when his actions went well beyond the suspicious. Attorneys for his former law partners at Rothstein Rosenfeldt Adler and the banks say Rothstein is lying, pulling off another scam to get his prison sentence reduced.
Q: What remains a mystery as far as Rothstein goes?
A: A lot. Rothstein admitted to committing a panoply of crimes outside his Ponzi scheme — money laundering, extortion, bribing public officials, bribing law enforcement, paying law enforcement officers to commit illegal acts, interfering with the judiciary and misreporting his taxes.
He wasn't allowed to elaborate, though. He was stopped by a federal prosecutor sitting in on the deposition sessions who cited "governmental investigatory privilege." Legal experts said that shutting down such lines of questioning indicates that federal authorities are still examining Rothstein's claims.
Q: Where is Rothstein? Has anything been done to change his physical appearance?
A: His whereabouts in the federal prison system remain a secret. He said in his deposition that he has limited access to the Internet and has been poring over thousands upon thousands of documents related to his crimes.
He's also lost about 35 pounds from exercise, has his hair cut short and sports a goatee. Rothstein, 49, said nothing else has been done to change his appearance.
Q: How could Rothstein's cooperation affect the 50-year prison sentence he is now serving?
A: Federal prosecutors filed notice in June that they intend to ask U.S. District Judge James I. Cohn to shorten Rothstein's prison term because of his cooperation. As long as prosecutors believe Rothstein has been telling the truth and not falsely implicating others, they are expected to ask for a resentencing hearing and recommend a reduced prison term.
It's not a sure thing that Cohn will heed prosecutors' recommendations. The U.S. Attorney's Office originally had asked Rothstein be sentenced to 40 years behind bars, but the judge tacked 10 years onto that.
Q: Rothstein was arrested more than two years ago — on Dec. 1, 2009 — so how does what he say matter now?
A: What should be of concern to the public is Rothstein's claim that as he built his empire of lies, he subverted institutions central to civic life — the political system, law enforcement, the legal profession, the judiciary and areas of the banking system. In his testimony, Rothstein painted a damning portrait of Broward County as a place where he engineered his meteoric rise by showering cash and gifts on people to get them to do his bidding or look the other way.
Q: Was Rothstein really involved with organized crime?
A. Yes, according to his testimony before more than 30 attorneys involved in bankruptcy and civil litigation resulting from his fraud. Rothstein admitted handling "a lot of money" for the mob. After his Ponzi scheme unraveled, he worked as an informant to bring down Roberto Settineri, an alleged Mafioso who authorities say acted as a conduit between the violent Santa Maria di Gesu crime family in Sicily and the Gambino crime family in New York.
When it publicly came to light that he helped the FBI nab Settineri, Rothstein became a phantom — hidden away in a witness protection program somewhere in the federal prison system.
Q: Why haven't his alleged co-conspirators been rounded up?
A: Rothstein's Ponzi scheme imploded in dramatic fashion, rather than gradually disintegrating like many major financial frauds. Federal authorities sometimes spend years deconstructing such schemes before making any arrests. In Rothstein's case, he was in handcuffs within a month — largely because he admitted to orchestrating the fraud.
Federal prosecutors have the monumental task of going through hundreds of thousands of pages of documents, while keeping an eye on protecting the attorney-client relationships in legitimate cases handled by Rothstein's former law firm.
So far, seven players connected with Rothstein's fraud — primarily office staff — have been charged, with five taking plea deals and a sixth, his former administrative assistant Marybeth Feiss, set to plead guilty later this month. Rothstein's uncle, Bill Boockvor, is awaiting trial on allegations he helped his nephew dupe investors.
Speculation about an impending multi-defendant indictment has been making the rounds in South Florida's legal community for months. Sources say it's not a question of whether more people will be charged, but how many and when.
Q: Is Rothstein still married?
A: Yes, according to his wife's attorney.
Kim Rothstein, his spouse of nearly four years, has been able to visit him in custody periodically and talk to him by phone, said her attorney, Scott Saidel.
Q: Is Rothstein done talking?
A: No. Even after his 10 days of testimony, which wrapped up on Dec. 23, more attorneys are seeking to question Rothstein about civil and bankruptcy litigation resulting from the collapse of his law firm. Cohn has already talked about holding a sequel to what was dubbed "The Big Deposition."
In addition, if any of his alleged co-conspirators decide to go to trial, prosecutors could call Rothstein to the witness stand.
Transcripts of Rothstein's final two days of testimony are scheduled to be released by Tuesday.
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