Our Daily Book Review

by Bernard McCormick Tuesday, February 05, 2013 No Comment(s)

Chuck Malkus’ book is out. The Ultimate Ponzi by the long-time Fort Lauderdale public relations man summarizes the Scott Rothstein story. I have not read it, or at least not much of it, but I did look at the pictures. Malkus was kind enough to send me an inscribed copy, but I did not know why until Jack Drury, also a long-time Fort Lauderdale public relations man, called with the intelligence that I am in it.

Sure enough, I am quoted from a column that appeared at the time of Rothstein’s arrest in 2009. It deals with Rothstein’s crashing a reception in Washington, D.C. It was after the swearing in of George LeMieux, for his brief term as Florida’s U.S. senator.  Nobody had invited Rothstein. LeMieux and people around him were suspicious of Rothstein’s flashy style and flaunting of new wealth. But Rothstein came anyway. It was the kind of event he needed to be part of, to show people how important and politically connected he was.

There is only one thing wrong with Malkus’ account, but it is hardly his fault. He said I wrote the piece. My name was on it, but I never said I was at the party, and the description of what happened was actually given to me, word for word, by Mark McCormick, who is no relation to me except my son. Mark dabbles in Republican politics, or at least did at the time, and was friendly with LeMieux and those supporting him. He was an eyewitnesses to Rothstein’s appearance that day. He was aware, of course, as were many on the fringe of politics, that Rothstein was a deeply suspicious figure. Mark had an instinct that something was going to blow up.

He was hardly alone. Rothstein had made our list of “50 Most Powerful” people about six months earlier. In truth, we were wary of including him on that select list. Most of those on it have never been indicted. And I never had heard his name until shortly before our survey of power. But when I heard it, I heard it all over the place. Lawyers, financial people, anyone following politics, were all asking the same question: where was this guy, who nobody even knew a few years before, suddenly getting all this money? Most of Rothstein’s legal associates have claimed they had no idea that anything was wrong at his firm. Yet outside the firm, anyone with an IQ marginally higher than your average fire hydrant, sensed that something had to be wrong. People like George LeMieux were giving him wide berth.

There was speculation that that he was running drugs, big time, or into an extremely lucrative pornography empire. At that point the only people suspecting a Ponzi scheme were those who would emerge as victims.  And that did not take long. What has taken longer has been the effort to “clawback” as much money as possible.

If there is any good that has come out of this situation, it has been an economic stimulus for the legal profession. With more than 100 victims and so many organizations – including many non-profits forced to return gifts made by Rothstein – there has been a blizzard of legal activity. There are something like 60 cases in federal court, and hearings at the bankruptcy court are jammed with lawyers, sometimes nobody but lawyers, all of them making five bills an hour minimum. And they are getting money back, mostly from banks Rothstein used to establish his credibility.

Attorney William Scherer got there early, almost from the day the deal broke. To date he has recovered up to $220 million for his clients, and still has three active lawsuits.

The most recent victim of private attorneys and federal prosecutors has been Rothstein’s wife (maybe?) Kim. She is not in Malkus’ book, except about 1,000 times, with photos on every other page with her absurdly fixed smile. She just got nailed for trying to hide some ill-gotten jewelry. It wasn’t much, only about $1 million worth. Pocket change, by Scott Rothstein’s standards. But it might be enough to pay a few legal fees.

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