Scott Rothstein sentenced to 50 years in prison
"I am ashamed and embarrassed," he told judge and victims
Scott Rothstein was a self-made superstar, South Florida was his stage, and his big-money production was a sham built on lies.
The main act drew to a close Wednesday when Rothstein was sentenced to 50 years in federal prison for running the largest Ponzi scheme in the state's history from his downtown Fort Lauderdale law firm.
The sentence was 10 years more than prosecutors sought, 20 more than the defense requested and half the maximum penalty of 100 years.
"Mr. Rothstein was seemingly omnipotent. He was everywhere. He was not only everywhere, but everywhere with excesses," U.S. District Judge James I. Cohn told the packed courtroom, explaining why the case captured the public's interest and spawned such disgust.
Rothstein, who turns 48 Thursday, looked dramatically different after six months in federal custody. He had lost a lot of weight, his conduct was muted and he was almost unrecognizable from the larger-than-life personality he used to project. His gray hair was closely shorn and he had a goatee.
Wearing dark pants and an off-white dress shirt, Rothstein was handcuffed and shackled at the waist and ankles. Rothstein's wife, Kim, began to cry when she saw him led into the courtroom. Rothstein looked back briefly after he sat down, but made no attempt to scan the audience as he did at prior hearings.
He humbly addressed the judge and the 100 people crammed into the standing-room-only courtroom, apologizing "to all those that I stole money from" and for all the harm he caused.
"I am truly and deeply sorry for what I have done. I don't expect your forgiveness. I don't," Rothstein said. "I am ashamed and embarrassed."
Rothstein's parents, Harvey and Gay, and his sister, Ronni Leon, also attended the sentencing but did not speak. They wrote letters seeking leniency but defense attorney Marc Nurik said Rothstein did not want to put his wife through the distress of writing or speaking for him.
Gone now are Rothstein's fancy houses, luxury cars and boats, the proceeds of which will be used to help repay legitimate victims later this summer. And none of his former political connections and buddies, who included Gov. Charlie Crist, attended the sentencing or wrote letters on his behalf.
Prosecutors said Rothstein was the creator and cause of his own downfall. He started out asking for money from people who trusted him, claiming it was for secret loans for important clients who would repay at outrageous interest rates. He later made up another hoax, that he was selling confidential legal settlements to investors who could make improbable profits, taking the Ponzi scheme into the hundreds of millions almost overnight.
"This defendant essentially placed himself in the pantheon of fraudsters," prosecutor Lawrence LaVecchio said.
As the judge announced the 50-year sentence, Rothstein's mother let out a pained gasp, put a hand over her face and leaned against the wall. Kim Rothstein dabbed her eyes.
Later, family members gathered in the foyer outside, tearful and visibly distraught. Kim Rothstein heaved loud sobs as she waited for an elevator.
Rothstein showed no reaction and appeared composed as he was led out of court. Federal authorities won't say where he is imprisoned but he was moved from federal detention to the St. Lucie County jail earlier this year and he wrote the judge that he was in protective custody.
Nurik, Rothstein's lawyer, said his client hasn't had "a moment of freedom" since he voluntarily returned from fleeing to Morocco in November.
Rothstein's lawyer made it clear Wednesday that he hopes the U.S. Attorney's Office will ask the judge to reduce the 50-year sentence in the future based on what prosecutors have called Rothstein's "extraordinary" cooperation in unraveling his fraud and the unspecified help he has provided in identifying other alleged criminals.
Experts said the average reduction for "substantial assistance" lies between a quarter and a third of the sentence imposed, though cuts of 50 percent have been granted more rarely.
"I anticipate another sentencing hearing at a later time and as a result it would be inappropriate for me to talk about the case," Nurik said as he left the courthouse.
It's unclear what will happen next for Rothstein. According to court documents, he is still cooperating with prosecutors and expects to continue doing so for some time.
Nurik also wouldn't comment about where his client is being held. But several defense attorneys said public speculation that Rothstein is not behind bars is farfetched and that he is most likely in protective custody in an isolated wing of a jail or prison. Some prisoners are given an added layer of protection because they are perceived to be in potential danger due to their cooperation, involvement in a high-profile case or conviction for a crime that is reviled by prisoners.
Rothstein can expect to get the customary 15 percent sentence reduction all prisoners receive for good behavior. If prosecutors later recommend he get an additional reduction for his cooperation, the final decision will rest with the judge. The most Rothstein could hope to receive would be a 25-year cut for truly exceptional assistance, attorneys said, and a reduction of 12 to 16 years would be more likely.
For a 48-year-old man, those prospects look grim.
Bill Berger, a former Palm Beach Circuit judge who worked for the Rothstein Rosenfeldt Adler law firm before it imploded, said he was satisfied with the punishment meted out Wednesday. "My hope was that Rothstein be disbarred from humanity, but this is close enough," Berger said.
Cohn clearly put a lot of preparation into his sentencing order, which he read aloud from the bench. He traced the arc of the fraud, the motivations and the methods used.
The opulent lifestyle Rothstein lived and the brand name image he created were strategic elements of the crimes he committed, Cohn said. Rothstein infiltrated so many spheres of public life, including politics, law enforcement, sports and charities. He went from being a little-known lawyer and, in five years, turned himself into a public figure with his face splashed on billboards and the pages of society magazines.
The scheme was sophisticated and caused some 400 investors to lose more than $400 million, Cohn said. "Unfortunately, many innocent people have been swept up by the tsunami that followed."
Rothstein's fraud was all about image, wealth, power and influence, Cohn said.
"He maintained political connections stretching from the Broward Sheriff's Office on one end of Broward Boulevard to the Fort Lauderdale Police Department on the other end of Broward Boulevard, the Governor's mansion in Tallahassee to the United States Congress in Washington and down Pennsylvania Avenue all the way to the White House," the judge said.
He had particularly stern words for Rothstein's unprecedented actions in forging the signatures of three federal judges on faked court orders to carry out one aspect of his fraud.
"These actions constitute the most egregious wrongs a licensed attorney can commit and represent a total disrespect for the authority and dignity of the courts," Cohn said. "There can be no conduct more reviled than an attorney perpetrating such a fraud on the court."
The federal prosecutors handling Rothstein's case — LaVecchio, Paul Schwartz and Jeffrey Kaplan — declined to comment outside court.
U.S. Attorney Wifredo Ferrer said in a statement that he hopes the sentence brings "some sense of justice to the victims of this massive fraud."
"This rags-to-riches-to-jail saga is a humbling reminder of what can happen when greed and ambition run amok," Ferrer said. "Rothstein manipulated and abused the trust of all whom he knew — his friends, family, business partners, legal colleagues, political figures and even charitable organizations — to enhance his reputation, standing and power in the community. All that he accomplished crashed and burned when his elaborate Ponzi scheme fell apart."
John V. Gillies, head of the FBI's Miami office, said the far-reaching criminal investigation into Rothstein's massive investment fraud scheme continues.
"For those that are entrusted with other people's money: Do the right thing," he said. "For those that entrust people with their money: Don't be fooled by the promise of unrealistic returns. The common element for both is greed — don't let it get the best of you."
Staff Writer Peter Franceschina contributed to this report.