Thursday, November 5, 2009
Carmel on the Case: Scott Rothstein Homes
7 News is learning the controversial attorney made a real estate move right before his house of cards fell apart. Investigative reporter Carmel Cafiero continues our team coverage with this exclusive.
WSVN -- You've probably seen the multimillion dollar mansion Scott Rothstein calls home. You may not have seen four more waterfront houses that Seven News has learned he owned nearby. The homes have assessed values of between $1.1 million and $1.8 million.
Carmel Cafiero: "Property records show Scott Rothstein transferred ownership in July and August of this mansion and three others all on the same street to out-of-state corporations. Their mailing address? His law office."
These homes no doubt will be among the assets investors go after, but that's just a drop in the bucket if the losses in Rothstein's suspected ponzi scheme are in the neighborhood of hundreds of millions of dollars.
Bill Scherer: "It didn't make sense. It didn't add up, and it didn't take very long to look at the papers and say this it not legitimate."
Attorney Bill Scherer represents a dozen investors who may be out more than $80 million. He says Rothstein sold them on the belief they were buying into out-of-court settlements that were top secret and confidential.
Bill Scherer: "Sexual harassment and whistle blowers kinds of cases that was what the theme of this thing to keep people from digging too deeply."
This is the paperwork for one of those deals. It's for a $1,450,000 settlement.
According to the document, Rothstein's law firm certified the "Source of the proceeds is legitimate and lawful."
Bill Scherer: "It looks like every penny went through TD Bank, to start with."
Scherer says his clients also relied on letters from TD Bank that the money was being held in trust-type accounts.
He says he will file a lawsuit within days that goes after everyone, from the bank to the law firm, to early investors who made money.
Bill Scherer: "Any profit over what they put in is subject to being recovered back under what's called a claw back. We heard that term in the Bernie Madoff cases, and this is like a Broward County Madoff case."
Carmel Cafiero: "Also facing big trouble in this financial meltdown, charities that once benefited from Scott Rothstein's very public, very big giving. They could face demands to give the money back."
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