Federal prosecutors investigating Scott Rothstein's alleged $1.2 billion Ponzi scheme have given their strongest indication yet that some of his former co-workers will face criminal charges.
In a document filed in federal court late Thursday, prosecutors said some of Rothstein's fellow employees at the now-bankrupt Rothstein Rosenfeldt Adler law firm have "apparent criminal culpability," but disclosed no specifics.
The criminal complaint filed against Rothstein refers to unnamed co-conspirators 42 times. Rothstein allegedly had help fabricating investment documents in the scheme, and is also accused of illegally funnelling campaign contributions through his firm's employees in violation of state and federal election laws.
U.S. Attorney General Eric Holder mentioned Rothstein by name Friday in remarks before the Forum Club of the Palm Beaches, where he outlined new measures being taken against financial fraud by a Justice Department task force created by President Barack Obama.
"Last year, Allen Stanford, Tom Petters and, most recently, Fort Lauderdale attorney Scott Rothstein — who is alleged to have run a $1 billion investment scam — joined Bernie Madoff in becoming headline news and household names," Holder said, according to a copy of his prepared remarks. "I'm proud that these men, along with more than 450 others convicted of corporate and securities fraud in 2009, have been taken out of the game."
Rothstein's defense attorney, Marc Nurik, announced in federal court Wednesday that Rothstein, 47, intends to plead guilty in the racketeering and conspiracy case Jan. 27.
At the same hearing, U.S. District Judge James Cohn asked prosecutors to reveal whether Nurik, a former attorney in Rothstein's firm, might face criminal charges himself, because that could compromise his ability to defend Rothstein.
In their document filed Thursday, prosecutors said Nurik had nothing to fear from them.
"Mr. Nurik is neither a target nor a subject in the ongoing investigation which gave rise to the pending charges against the defendant," Assistant U.S. Attorney Lawrence LaVecchio wrote.
Rothstein is accused of running a massive swindle, selling bogus legal settlements to investors since 2005. Prosecutors alleged in their racketeering charges against Rothstein that his downtown Fort Lauderdale firm was a criminal enterprise he and his co-conspirators used to carry out the scheme.
In an interview Friday, Nurik said he expects others to be charged, because by definition a conspiracy involves two or more people.
"You don't ask someone to plead guilty to a conspiracy unless there is a factual basis that other people are involved," he said. "So under the circumstances, I think it's pretty clear the government intends to charge others."
Peter Franceschina can be reached at firstname.lastname@example.org or 954-459-2255.