Scott Rothstein Ponzi Scheme Essay
Memorandum to the File
Date:
From:
Re: The Scott Rothstein Ponzi Scheme
Introduction
Scott Rothstein was a prominent Fort Lauderdale attorney. From 2004 until 2009 Rothstein ran South Florida’s largest Ponzi scheme (Franceschina, 2010). His Ponzi scheme collected 1.2 billion dollars during the time it was in operation, and like all Ponzi schemes he relied on payments by new investors to pay the previous investors. When his scheme began to fall apart, Rothstein fled to Morocco. He eventually returned to the United States to try and make a plea deal for a reduced sentence in exchange for his cooperation. (Burstein, 2012). Rothstein is currently serving a 50-year sentence.
Methodology
In order for Scott Rothstein to perpetrate his crime he would find investors to invest money in lawsuit settlements. He would tell investors that his clients had reached a settlement on a lawsuit, and instead of taking payments they would like the money upfront. The clients would be willing to take less money in exchange for a lump sum payment. The investors were guaranteed a 20 percent return on their money (Kestin, 2009). The suits were not real and Rothstein would make up the cases and all the supporting documents to make the investment look legitimate. Rothstein promised his investors large returns and he …show more content…
He enjoyed living a rich lifestyle. Rothstein called his lifestyle, “rock star lifestyle”. His way of life included a condo close to his office that was used for sex with prostitutes by him and many of his partners. Rothstein said that he bribed many officials in Fort Lauderdale and that he seduced many others with his image. He said he spent a million dollars on bribe money (Grimm, 2012). His flashy life included having the best of everything, the best clothes, the best shoes, front row seats at concerts and the ability to close down a store and take your friends shopping (Kestin,
Date:
From:
Re: The Scott Rothstein Ponzi Scheme
Introduction
Scott Rothstein was a prominent Fort Lauderdale attorney. From 2004 until 2009 Rothstein ran South Florida’s largest Ponzi scheme (Franceschina, 2010). His Ponzi scheme collected 1.2 billion dollars during the time it was in operation, and like all Ponzi schemes he relied on payments by new investors to pay the previous investors. When his scheme began to fall apart, Rothstein fled to Morocco. He eventually returned to the United States to try and make a plea deal for a reduced sentence in exchange for his cooperation. (Burstein, 2012). Rothstein is currently serving a 50-year sentence.
Methodology
In order for Scott Rothstein to perpetrate his crime he would find investors to invest money in lawsuit settlements. He would tell investors that his clients had reached a settlement on a lawsuit, and instead of taking payments they would like the money upfront. The clients would be willing to take less money in exchange for a lump sum payment. The investors were guaranteed a 20 percent return on their money (Kestin, 2009). The suits were not real and Rothstein would make up the cases and all the supporting documents to make the investment look legitimate. Rothstein promised his investors large returns and he …show more content…
He enjoyed living a rich lifestyle. Rothstein called his lifestyle, “rock star lifestyle”. His way of life included a condo close to his office that was used for sex with prostitutes by him and many of his partners. Rothstein said that he bribed many officials in Fort Lauderdale and that he seduced many others with his image. He said he spent a million dollars on bribe money (Grimm, 2012). His flashy life included having the best of everything, the best clothes, the best shoes, front row seats at concerts and the ability to close down a store and take your friends shopping (Kestin,