Disbarred attorney Scott Rothstein, whose seemingly unlimited wealth bought palatial homes, exotic cars and mega-yachts, was sentenced Wednesday to 50 years in prison for operating a $1.2 billion Ponzi scheme using faked legal settlements.
The sentence imposed by U.S. District Judge James I. Cohn was below the 100-year maximum Rothstein faced for five felony convictions, including racketeering conspiracy, money laundering conspiracy and wire fraud.
Rothstein, who turns 48 on Thursday, had hoped for a 30-year sentence because of his extensive cooperation with investigators — and prosecutors could later ask for up to one-third off his sentence because of continued assistance.
Cohn agreed that Rothstein deserved credit for cooperation but was particularly troubled that the former lawyer would use the judicial system for his scam, to the point of forging signatures of at least three federal judges on fake documents.
"These actions constitute the most egregious wrongs a licensed attorney can commit," Cohn said, adding that Rothstein's "opulent lifestyle" was designed to advance the scheme by projecting an illusion of success.
"It was all about image, wealth, power and influence," the judge said.
The prison sentence, 10 years more than prosecutors recommended, caps a swift downfall for Rothstein, whose now-defunct law firm Rothstein Rosenfeldt Adler was once considered a rising force in South Florida legal circles.
His taste in fancy Italian sports cars, an 87-foot custom yacht, glittering watches and big cigars made him seem to be a larger-than-life character and a darling of politicians, celebrities and sports stars. In fact, Rothstein told the judge in a letter, it was all a facade to feed his own "ego and greed."
"I did all I could to increase my power, to keep the myth alive, to feed the beast I had created, and to try to keep myself above the law," Rothstein wrote.
In a brief statement Wednesday in court, a much more subdued and visibly thinner Rothstein apologized and insisted he will do "everything in my power" to help investors recoup an estimated $429 million in losses. As he spoke, Rothstein's wife, Kim, sat in the court audence staring at her husband and dabbing at her eyes with a tissue. Kim Rothstein has not been implicated in the scheme.
"I don't expect your forgiveness," Rothstein said, turning and addressing the packed courtroom directly.
U.S. Attorney Willy Ferrer called the Rothstein case a "rags-to-riches-to-jail saga" and said he abused the trust of nearly everyone he had contact with.
"Today's sentence punishes the defendant for his thievery, and hopefully brings some sense of justice to the victims of this massive fraud," Ferrer said.
The Ponzi scheme involved attracting investors with fat interest rates from the sale of confidential legal settlements that were nothing but fiction, as well as fake bank statements showing money in accounts that didn't exist. Money from new investors was used to pay off older ones, until the scam collapsed in late October.
With the illusion of prosperity, Rothstein drew the interest of politicians including Florida Gov. Charlie Crist, to whom he contributed thousands of dollars that have since been returned, and national figures ranging from former Alaska Gov. Sarah Palin to California Gov. Arnold Schwarzenegger. Rothstein's office was covered in photos of him with politicians and prominent sports stars, such as ex-Miami Dolphins quarterback Dan Marino. Off-duty city police officers guarded his home.
The scam operated from 2005 until October 2009, when Rothstein said in the letter he considered suicide and then opted to flee to Morocco after wiring $16 million to an account there. Ultimately, he decided to return to Florida and face the consequences — and also secretly agreed to help the FBI in several undercover investigations, including that of a suspected Mafia figure now jailed and awaiting trial.
Rothstein pleaded guilty Jan. 27, surrendered his law license and agreed to forfeit all assets.
Prosecutors gave Rothstein credit for returning voluntarily from Morocco — a country with no U.S. extradition treaty — and assisting with the Ponzi scheme probe and other investigations. But they also said Rothstein could not get off lightly for sullying the legal profession, giving charities stolen money that in many cases had to be returned and causing the implosion of a once-thriving law firm.
The government has seized Rothstein's assets and is in the process of selling them to pay restitution to victims. There is also an ongoing legal wrestling match over ownership of some of the assets and bank accounts linked to the scam and Rothstein's law firm.