The investigation of the $1.2 billion Ponzi Scheme run by Scott Rothstein, a former Florida lawyer who pled guilty in January 2010, continues to move forward, with prosecutors disclosing in a filing late last week that a fresh round of indictments is expected in the coming months.
Rothstein, who admitted using the pretense of selling nonexistent legal settlements to investors to rake in over $1 billion, has been cooperating extensively with investigators since his arrest and guilty plea. He was sentenced to 50 years in prison for his role, although prosecutors are expected to ask for a reduction based on the fruits of Rothstein's efforts in cooperating.
The latest disclosure comes as the trustee marshalling assets for the benefit of defrauded investors seeks to depose Rothstein, after receiving approval from United States Bankruptcy Judge Raymond Ray. The decision will ultimately be up to District Judge James Cohn, who will take up the matter at a hearing on July 1st. Prosecutors said in a filing opposing the deposition that
"It is anticipated that a deposition of Rothstein would disclose the evidence which forms the basis of the government’s proposed case to putative defendants and other targets of the criminal investigation, some of whom are parties to this action. It is further feared that such a disclosure of information, at the present time, would enable coconspirators to obstruct the grand jury’s investigation and to corruptly tailor their statements and statements of other witnesses to falsely exculpate themselves."
In lieu of deposing Rothstein, prosecutors have offered to provide the trustee, Herbert Stettin, with information he may need to go forward with pursuing clawback lawsuits, in light of the two-year statute of limitations applicable in bankruptcy proceedings.
Already, five Rothstein associates have been charged, including the chief operating officer of the now-defunct firm. According to the recent filing, prosecutors expect to file indictments for a broad array of crimes, including mail and wire fraud, campaign finance fraud, tax fraud, extortion, payments of unlawful gratuities, bank fraud, and money laundering.