The woman who once served as Ponzi schemer Scott Rothstein's most loyal lieutenant was led into court Wednesday handcuffed and shackled, charged with aiding him in the largest fraud scheme in South Florida history.
Debra Villegas, the chief operating officer of Rothstein's law firm, pleaded not guilty to a single charge of money laundering, but is cooperating with federal authorities and expected to eventually reach a plea agreement with prosecutors. She surrendered to marshals at the federal courthouse in Fort Lauderdale about 8:15 a.m.
Villegas, 42, walked into the courtroom with her head up. Sitting in the back row of the courtroom was her husband, Daniel Coffey, and a former colleague, attorney Christina Kitterman. She answered the judge's questions in a clear voice.
An hour after the hearing, Villegas walked out of the courthouse on a $250,000 personal-signature bond, holding Coffey's hand. With reporters asking her questions, she left without saying anything.
She is the first Rothstein associate to be criminally implicated in his $1.4 billion conspiracy.
Assistant U.S. Attorney Lawrence LaVecchio told U.S. Magistrate Robin Rosenbaum that Villegas began cooperating with authorities last November, and she has provided information not only about Rothstein's investment fraud but other criminal activity involving his law firm.
LaVecchio offered no specifics, but prosecutors have alleged Rothstein and unnamed co-conspirators violated federal and state election laws through illegal campaign contributions.
LaVecchio told the judge it was beneficial to authorities to have Villegas remain free while she continues to help them with their investigation. "The defendant has known this day was coming, and if she would have fled, she would have fled some time ago," the prosecutor said.
The magistrate decided Villegas was not a flight risk.
The charging document filed Tuesday against Villegas accuses her of forging nonexistent legal settlement agreements, which Rothstein used to dupe investors into believing he was bringing in millions of dollars in whistle-blower and employment discrimination cases. The money-laundering conspiracy charge is punishable by up to 10 years in prison.
Outside the courthouse, Villegas' attorney, Robert Stickney, confirmed that Villegas has been assisting federal authorities since the Ponzi scheme was revealed.
"She has been doing the right thing for several months now," he said.
Rothstein, 47, also is cooperating with authorities. He has pleaded guilty to five felonies and faces up to 100 years in prison at his sentencing scheduled for June 9.
Villegas has known Rothstein for years, rising from paralegal to chief operating officer of his now-bankrupt law firm, Rothstein Rosenfeldt Adler. As Rothstein's confidante, Villegas worked in his sealed-off inner sanctum, handled aspects of his personal and professional financial affairs and was well-rewarded, earning $120,000 a year.
Rothstein also bought her a $475,000 Weston home, which he deeded to her last summer out of "love and affection," and a $100,000 Maserati, which she has surrendered to federal authorities. Prosecutors are seeking the forfeiture of the Weston home. Villegas took a $100,000 mortgage out on the home days before Rothstein's Ponzi scheme collapsed, records show.
Stickney said Wednesday that Villegas has moved to Clewiston, in part to ease her stress, and is willing to sign over the Weston home to the government. He also said her Cadillac Escalade has been repossessed.
Villegas has described Rothstein as "like a brother." He took care of her family after her former husband was charged in March 2008 with murdering her best friend, Rothstein law firm partner Melissa Britt Lewis.
Before Villegas' name came up in connection with Rothstein's investment fraud, she was in the spotlight as a central figure in the Lewis murder investigation. Plantation police believe Villegas' ex-husband, Tony Villegas, killed Lewis out of jealousy, because he thought Lewis played a role in his marriage's demise. Tony Villegas has pleaded not guilty and is awaiting trial.
Jon Burstein can be reached at firstname.lastname@example.org or 954-356-4491.
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