Court in Rothstein $ 1.6 Billion Fraud Case Asserts Jurisdiction Over Assets
As reported by Law.com, yesterday, U.S. District Judge James I. Cohn of the Southern District of Florida issued an order requested by the government to preserve all assets of accused Ponzi schemer Scott Rothstein for forfeiture. Rothstein is alleged to have defrauded investors of an $1.6 billion--according to the most recent estimates--by soliciting investments in alleged settlement agreements in civil and employment cases. He voluntarily surrendered assets to authorities last month, without conceding any wrongdoing.
Rothstein's former law firm, Rothstein Rosenfeldt Adler, is currently going through dissolution in Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Florida. The District Court's order shifts jurisdiction for marshalling the assets from the Bankruptcy Court to the District Court. The Court will consider any claims by third-parties in ancillary proceedings to the criminal case against Rothstein.
The bankruptcy trustee had sought to bring Rothstein and his companies into the law firm's bankruptcy proceeding, claiming that they were "alter-egos" of the firm. The District Court's intervention will impede the trustee's pursuit of any claims against the assets, according to Rothstein's bankruptcy counsel.
The District Court has set trial on the money laundering, fraud and racketeering charges against Rothstein for January 11. Rothstein is currently being held in federal custody.
