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Toxic shock of Rothstein's fall felt across South Florida
To victims, colleagues and members of his once-swinging entourage, he's a superstar of flimflam, a lawyer gone spectacularly rotten — maybe even a sociopath.
Scott Rothstein's attorney says his client is truly remorseful and ready to atone with many years behind bars.
As the fallen Fort Lauderdale lawyer and accused super swindler heads back to court and an anticipated guilty plea Wednesday in his alleged $1.2-billion Ponzi scheme, toxic fallout from what may be South Florida's most colossal fraud in history still reverberates across the region.
A handful of very wealthy investors, out hundreds of millions of dollars, are frantically trying to claw back some of their vanished assets through warring lawsuits.
Smaller investors and some law firm clients, the proverbial little guys, are hurting even worse. Some have been virtually wiped out.
A large law firm — Rothstein Rosenfeldt Adler, with dozens of innocent employees — has been destroyed, leaving many without jobs.
Fort Lauderdale's police chief and two high-ranking Broward Sheriff's Office officials are under scrutiny for their chummy ties to Rothstein.
The running house-party that was Rothstein's life for the past five years is over, and his brigade of hangers-on has done its best to melt into the shadows. The martinis have dried up, the Montecristos aren't burning bright and the colorful Ferraris and Lamborghinis no longer growl down Las Olas Boulevard.
Rothstein, 47, himself is a changed man — nearly two months in federal detention can be transformative. His once spiky blond hair is now graying; there is no dye in lockup. His double chin has disappeared; there are no rich meals or liquor in lockup. He's doing his best to remain strong in his forced isolation.
The five federal counts of racketeering, money laundering and fraud filed against him carry a potential 100 years of prison time. Rothstein's attorney, Marc Nurik, has said his client will plead guilty to some charges Wednesday morning, but it's unclear as to which, and what sort of punishment they may carry.
"The process is very open-ended as far as sentencing occurs," Nurik said in a recent interview. "He is facing a lot of time."
Meanwhile, an intense federal investigation continues to determine who else was involved. Prosecutors, FBI agents and IRS investigators remain tight-lipped, but the 34-page document charging Rothstein refers to "co-conspirators" 42 times.
Simultaneously, the Florida Bar is investigating 35 senior attorneys from Rothstein's firm, to determine whether they were involved in trust account irregularities.
Many who were closest to Rothstein no longer want their names mentioned along with his. Former fast friends won't talk to reporters. Ex-law partners refuse to comment on the record, though two of them privately called Rothstein a "sociopath." Investors don't return journalists' messages.
For former firm co-owner Stuart Rosenfeldt, gone are the stylish Las Olas Boulevard offices, where he and "Scotty" presided over 150 employees occupying four floors of a downtown high-rise. Rosenfeldt has opened a practice with another ex-RRA lawyer and now shares down-at-heels office digs with a building contractor in a depressed area of Fort Lauderdale, next to a convenience store with bars across the windows and across from a thrift store and pawn-shop plaza.
"I have nothing to say,'' Rosenfeldt said one afternoon last week. "I just can't even think about it.''
RRA's other name partner, Russell Adler, gave an adamant, "no comment" to the question the Sun Sentinel asked many people for this article: how has Scott Rothstein's fall changed your life?
Adler now has an office two floors down from his old haunts; his updated profile on the Florida Bar's website lists his firm size as "one." Other attorneys from Rothstein's now bankrupt firm – there were once about 70 of them – have formed their own firms, joined others or struck out on their own.
One of those lawyers, Anna Lenchus, hasn't decided which path she will take. She was with RRA only nine months and on maternity leave when news of the fraud scandal broke around last Halloween.
"I have a 3-month-old baby. I'm working for myself right now. I think I'm still in shock," she said. "He has destroyed many people's lives and careers. It hasn't been easy getting jobs with RRA at the end of your name. … I think it is going to be a while until people let that negative connotation go. He did affect thousands of people's lives."
Emotions run strong among former RRA employees, Lenchus said.
"I think everyone has a feeling of betrayal, more than anything," she said. "Everybody worked hard. There was a lot of dedication, a lot of loyalty."
Former Broward Sheriff Ken Jenne, an attorney by training, went to work for Rothstein's law firm after completing a federal prison term for public corruption in September 2008. Disbarred because of his felony conviction, Jenne had no formal title at the RRA but played several roles, according to former co-workers who spoke on condition of anonymity.
Chief among those was consulting with corporations and individuals and giving advice on doing business locally. He also worked with a team who conducted investigations for civil suits and corporations.
Jenne declined to comment for this article, but friends and former associates say he plans to continue working in the same field. The former sheriff formed a corporation, De Groene Poort — Dutch for "green door" or "green gate" — in October 2008, and has kept it active.
At Ultimate Cigars near downtown Fort Lauderdale, a Rothstein hangout, owner Moe Sohail has erased all photographic evidence of his now notorious customer. These days, Sohail hawks rolls of toilet paper, each sheet of which bears an image of a smiling Rothstein and the words, "Rolling with Rothstein.'' Price: $15 a roll.
"I just made my first sale,'' Sohail said last Thursday, pointing to a box that arrived from New York with yet more rolls. Then he turned somber.
"I just feel bad for all the people who worked for him, the secretaries, the drivers, who lost their jobs just before Christmas,'' Sohail said. "It's a heartbreaker.''
Still, Rothstein has his defenders.
One of them is Joe Alu, the former Plantation police officer still working as a bodyguard for Rothstein's wife, Kim, who has avoided any public appearances that would subject her to the media. Nothing Alu has heard or read appears to have shattered his loyalty to his boss. Not even the guilty plea expected on Wednesday.
"I think he's trying to make a good deal for himself,'' Alu said. "He's a lawyer. He knows what he's doing.''
Alu said he didn't think Rothstein's been treated fairly by the media or federal prosecutors.
"I don't think this was his scheme. This is my opinion. I don't believe this was his plan. … Scott would never do this on his own. Someone put him up to this and he's taking the fall for it."
Since Rothstein's Dec. 1 arrest, Alu said he has chauffeured Kim Rothstein to the federal detention center in Miami for weekly visits, and communicated himself with Rothstein by e-mail.
Though Alu hasn't seen Rothstein, he said he heard he looked great and has lost weight.
"No more dyeing hair, no more martinis for lunch,'' Alu said. "Scott is mentally as strong as you could be. He's having his up and downs as anyone would.''
Last Oct. 30, Karin Romanowski, a registered nurse from Canada now on disability, and her husband wired all of their savings — $145,000 — to Rothstein's firm to buy a retirement condo in Lauderdale-by-the-Sea. That weekend is when the rumors first surfaced that Rothstein had fled to Morocco and millions of dollars were missing. The nurse and her husband haven't been able to find out yet if their money is lost.
"All our hopes and dreams, we put all our savings into it. It's devastating," Romanowski said. "He has caused so much harm to so many people and so much suffering he should go to prison for a long time."
Staff Writer Paula McMahon contributed to this report. Peter Franceschina can be reached at firstname.lastname@example.org or 954-459-2255.