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Scott Rothstein scandal: One year later

He Rose Quickly and Fell Even Faster By Jon Burstein and Paula McMahon, Sun Sentinel 10:15 AM EDT, November 1, 2010 Fallout from the largest fraud in South Florida history continues after the dark secret behind Scott Rothstein’s success was revealed a year ago this week. The Ponzi schemer now sits in prison with limited contact from the outside world. The disgraced lawyer and business impresario who once held court at his now-shuttered Bova Prime restaurant is now reviled as a total fraud. The attorneys who had been on his Fort Lauderdale law firm’s payroll cringe when they hear his name. His former law partners at Rothstein Rosenfeldt Adler have become the subject of scorn with colleagues questioning how they had no idea Rothstein was using the law firm as the front for his $1.4 billion investment fraud. His wife, Kim Rothstein, faces a massive IRS lien that her attorney says has kept her from getting a job. The Rothstein drama captivated Fort Lauderdale—the implosion of his law firm, the details of his extravagant lifestyle and his dramatic return from Morocco, where he had fled as it became clear his colossal scam was unraveling. Within eight months, Rothstein, 48, was arrested, pleaded guilty to the fraud and was sentenced to 50 years in federal prison. While Rothstein’s name has been wiped from buildings and billboards, the path of financial destruction left in his wake remains. With the one-year anniversary of the scandal, questions still loom. Where is Rothstein now? This is the most common question asked about Rothstein. His name and inmate number have vanished from the U.S. Bureau of Prison’s inmate locator webpage. While conspiracy theories abound on the Internet, attorneys in civil and criminal cases involving Rothstein say there’s no question he is behind bars. Rothstein’s lawyer, Marc Nurik, scoffed last week at the notion that anyone could believe Rothstein is anywhere but prison. The defense attorney said he can’t give any details where Rothstein is incarcerated. Fort Lauderdale attorney, William Scherer, who is representing investors who lost more than $165 million with Rothstein, said he’s in constant contact with the Ponzi schemer through Nurik. Rothstein is being kept in protective custody in an undisclosed prison, Scherer said. Scherer said Rothstein continues to help attorneys trying to recover investors’ money. Rothstein began cooperating with the federal government almost immediately after he came back from Morocco. Rothstein will come back to Broward County—as early as next year—for more court appearances. He will be Scherer’s star witness in a civil case against more than 30 people and companies accused of aiding or allowing Rothstein’s Ponzi scheme. That case could go to trial sometime in 2011. Rothstein will inevitably ask U.S. District Judge James I. Cohn in Fort Lauderdale to reduce his prison sentence because of his cooperation. He also could be brought into any of the ongoing bankruptcy cases as well as future criminal cases filed against co-conspirators. Why have only Rothstein and the law firm’s chief operating officer...

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