Ponzi schemer's firm provided prostitutes to investors, police

Jan 4 2012 - 4:31pm

FORT LAUDERDALE, Fla. -- Ponzi schemer Scott Rothstein said his downtown Fort Lauderdale law firm maintained a condo across the street where he and his law partners would have sex with prostitutes and then come back to work, according to transcripts of his testimony that were unsealed Wednesday.

The imprisoned fraudster said his law firm spent tens of thousands of dollars per month on escorts, offering the women's services to friends, investors and business associates.

Rothstein also said he provided escorts to two police officers, but he did not name names.

"There were probably times when we spent $50,000, $60,000 a month on escorts," Rothstein said. "It just depends. When there were political things in town, more. Big functions, conventions, more. People in town to entertain, more money. But it was a lot of money just for the law partners that were using escorts. Some of them had fairly voracious escort habits."

Rothstein, 49, has said that escorts were part of the "rock-star lifestyle" he used to seduce investors and manipulate people while he masterminded a $1.4 billion financial fraud from the Las Olas Boulevard offices of his Fort Lauderdale law firm, Rothstein Rosenfeldt Adler.

Rothstein pleaded guilty to the scheme in January 2010 and was later sentenced to 50 years in prison.

His Dec. 16 testimony concerning the escorts was made publicly available after U.S. Bankruptcy Judge Raymond B. Ray rejected an attempt to keep that part of the transcript sealed. An attorney for Michael Szafranski, a financial adviser who Rothstein alleges knew about his fraud, had argued in a closed court hearing that the testimony should remain hidden from public view.

In the five pages of transcripts that were unsealed, Rothstein said he provided escorts to Szafranski and others, including law partners Stuart Rosenfeldt and Russell Adler and the law firm's general counsel, David Boden.

"I was giving Stu Rosenfeldt $5,000 a week for his escort habit and general people at the law firm probably another few $1,000 a week," Rothstein said.

"We had a condo in 350 Las Olas right across the street from the office," he said. "That's where Russ and Stu and me and Boden, we would send a girl up there, and then we'd go up there and do our business and come back to work."

Rosenfeldt's attorney, Bruce Lehr, said Wednesday that he would not dignify Rothstein's claims with an answer.

"I'll tell you Stuart is happily married to the same wife all these years," Lehr said.

Boden's attorney, David Vinikoor, simply responded to the allegations with: "It's ludicrous."

Adler's attorney, Fred Haddad, said Rothstein's claims "go along with the rest of the delusions that Rothstein seems to have."

"What else would you expect from Rothstein?" Haddad asked. "He's keeping the fraud going. He's defrauding the government with his testimony, and they are buying it."

Szafranski's attorney, Christopher Berga, wrote in a prepared statement that Rothstein lied about his client being with an escort.

"It is bad enough that Mr. Szafranski has had to endure all of Rothstein's other false allegations that he was a co-conspirator in the fraud, but an assault on a man's marriage, particularly when false, goes too far," Berga said.

Rothstein admitted that he had relationships with two escorts. He said his wife caught him cheating "on more than several occasions."

The disbarred attorney spent two weeks behind closed doors in a Miami federal courtroom last month answering the questions of more than 30 attorneys involved in litigation related to his bankrupt law firm. He is hoping for a reduction in his 50-year federal prison sentence.

Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com

Distributed by MCT Information Services

 

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