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Suit seeks $3.8 million from Rothstein colleague
In the first lawsuit targeting a former Scott Rothstein colleague, a bankruptcy trustee on Tuesday sued attorney Steven N. Lippman, asserting he pocketed $3.8 million in bonuses, unpaid loans and reimbursements for home furnishings, country club fees and other expenses he wasn't entitled to.
It was likely only the first in a series of legal actions to recover money paid to lawyers and other employees of a once-prominent Fort Lauderdale business that federal investigators say was a front for Rothstein's alleged $1.2 billion Ponzi scheme.
"This is the first lawsuit against a Rothstein Rosenfeldt Adler partner for fraudulent transfers," said Charles H. Lichtman, an attorney representing Herbert Stettin, the bankruptcy trustee for the now-defunct firm. "We believe others will follow."
From 2006 to 2009, according to the suit filed Tuesday in federal court, Lippman received "unreasonable and improper" payments totaling $3.8 million.
A lawyer for Lippman, 47, a commercial litigation specialist who began working for Rothstein in January 2005, said in an interview that his client had done nothing wrong and deserved the money.
"He earned every cent that he received while employed there through legitimate, hard work," Lippman's attorney, Bruce Zimet, said. "He's a real lawyer, did real work and brought in legitimate, real fees to the law firm. He had absolutely nothing to do with any illegal activity."
As court-appointed bankruptcy trustee, Stettin's role is to reconcile the claims of creditors against the assets of Rothstein's firm. In a court filing last week, Stettin reported that records of Rothstein Rosenfeldt Adler indicated that some of Rothstein's former partners and employees received loans, including a total of more than $1 million not yet repaid by co-owner Stuart Rosenfeldt and the other name partner, Russell Adler. Former employees of the firm disputed those findings.
According to the lawsuit against Lippman, he was improperly given $932,670 to reimburse expenses that had nothing to do with his job responsibilities at the firm. The reimbursments included the cost of home furnishings, charges at the Weston Hills Country Club, personal travel, clothing, tickets to sports events, charitable contributions and personal meals, the suit says.
The lawsuit also seeks the recovery of $2,464,907 in loans that Lippman allegedly did not repay.
According to the suit, Lippman regularly received checks from the law firm's operating account, which he would typically deposit into a bank account he maintained in the name of his former law firm, Lippman Valinksy & Storfer.
Both Rothstein and Lippman referred to this account as the "Nest Egg Account," according to the lawsuit.
Within a day or two of the deposits, Lippman would write a repayment check for a lesser sum, the suit says.
At other times, according to the suit, Lippman would write checks to other parties, such as Sterling Bank; Kendall Sports Bar; Albert Peter, a Rothstein business associate; Banyon LLC; Rothstein; or himself.
Lippman's lawyer said he has furnished proof that all the transactions were aboveboard.
"We supplied Mr. Stettin with a copy of the front and back of every check in question in relation to these so-called loans," Zimet said. "He knows that Mr. Lippman was not involved in any scheme whatsoever, and that Mr. Lippman did not improperly receive one cent of money relating to these so-called loans."
The third set of payments Stettin is seeking is recover is $436,518 that Lippman reportedly received in 2008 and 2009 as bonuses.
Rothstein is being held in a federal detention center in Miami on rackeetering and fraud charges. His trial has been tentativelty scheduled for next month.
Tonya Alanez can be reached at tealanez@SunSentinel.com or 954-356-4542.