Disbarred South Florida lawyer Scott Rothstein is negotiating a guilty plea with federal prosecutors on charges of orchestrating a $1.2 billion Ponzi scheme using faked legal settlements, his attorney said Tuesday.
"I can tell you that there will be a change of plea to guilty," said Rothstein attorney Marc Nurik. "We don't have any finalization on the details at this point."
Nurik said he will ask a federal judge Wednesday to set a date for the change of plea hearing. Rothstein, 47, pleaded not guilty in December to a five-count indictment accusing him of racketeering, conspiracy and fraud in a scheme that ran from 2005 to 2009.
Those charges carry a maximum sentence of 100 years in prison, but people who plead guilty typically get a lesser sentence. No agreement has been reached on the exact charges to which Rothstein will plead guilty, Nurik said.
The Miami U.S. attorney's office had no immediate comment.
Rothstein has been jailed without bail since his Dec. 1 arrest, which followed the swift collapse of his once high-flying Rothstein Rosenfeldt Adler law firm in Fort Lauderdale. The FBI and Internal Revenue Service have seized Rothstein's assets, including numerous luxury vehicles, homes and other properties, bank accounts and business interests.
Prosecutors say Rothstein lured people to invest in phony legal settlements that promised big payoffs in a short time. Rothstein also offered investments in short-term business loans that offered huge financial returns, most of them also nonexistent.
As with any Ponzi scheme, prosecutors say, Rothstein used money from new investors to pay off older ones, keeping a fat chunk for himself to buy luxuries such as a $1.7 million Bugatti Veyron sports car, several Ferraris, expensive jewelry and watches and two dozen homes and properties.
Just as the scheme was unraveling in October, Rothstein took off in a private jet for Morocco after wiring $16 million to an account that he controlled there. He also carried with him some $500,000 in cash, according to court documents, but ultimately decided to return to South Florida before he was indicted.
Rothstein was close to major national and state politicians, including Florida Gov. Charlie Crist and 2008 Republican presidential nominee John McCain. Political parties and candidates have returned hundreds of thousands of dollars in contributions linked to Rothstein and are investigating whether others in the law firm played a role in potential political donation violations.
Prosecutors also have not ruled out charging others in the firm in the Ponzi scheme. If Rothstein were to agree to cooperate with investigators, it could lead to more indictments and reduce his potential time in prison.