FORT LAUDERDALE, Fla. (AP) – Former NFL star Warren Sapp, some of America’s biggest banks and tax collectors from Florida to Rhode Island are laying claim to a piece of the collapsed empire of disbarred attorney Scott Rothstein, who is awaiting sentencing after pleading guilty to operating a $1.2 billion Ponzi scheme.
A hearing was scheduled Friday to begin sorting through the claims, including one from the bankruptcy trustee for Rothstein’s defunct law firm who says more than $469 million is being sought by investors and creditors.
are the true owners.
For example, Wachovia bank contends that it owns a $2.75 million commercial property in Pompano Beach. Rothstein’s former law partner, Russell Adler, says a downtown New York condominium is “100 percent” his and has no link to the Ponzi scheme. Tax collectors in Miami-Dade and Palm Beach counties in Florida and the town of Narragansett, R.I., are demanding taxes owed on several Rothstein-related properties.
Sapp, a seven-time Pro Bowl defensive lineman, is seeking return of more than $102,000 from an unspecified legal settlement that was held in the law firm’s trust accounts. More than two dozen other former Rothstein Rosenfeldt Adler clients have made similar claims for return of their money.
Assets other than cash that is forfeited to the U.S. government will eventually be sold, with most of the proceeds going to victims of Rothstein’s Ponzi scheme. An auction is scheduled next week for 10 vehicles formerly owned by Rothstein, including a Bugatti Veyron that retails new for nearly $2 million, and an 87-foot Warren yacht.
Rothstein, who briefly fled to Morocco when his fraud scam collapsed last October, pleaded guilty Jan. 27 to five felony charges stemming from a Ponzi scheme in which he sold faked legal settlements as lucrative investments promising double-digit returns.
sentence because of his undercover assistance in helping the FBI snare an alleged Mafia operative with links to crime families in Sicily and New York. Sentencing is scheduled for June 9.
Cohn has already ordered most of Rothstein’s assets forfeited to the U.S. government. But the law firm bankruptcy trustee, Herbert Stettin, contends that a lengthy list of those assets belong in that proceeding because their purchase is directly tied to the firm’s accounts.
“The trustee has a right to recover any and all assets obtained with RRAs’ funds,” Stettin said in court papers.
But Assistant U.S. Attorney Alison Lehr disagreed, contending that although some people and companies may claim ownership of certain assets there is no way to shift them wholesale into the bankruptcy court.
Lehr also said prosecutors have not yet calculated the total losses suffered by Rothstein’s investors.
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