US: Fla. lawyer who ran Ponzi scheme deserves more lenient sentence because of undercover work

FORT LAUDERDALE, Fla. (AP) — A disbarred South Florida attorney who admitted orchestrating a $1.2 billion Ponzi scheme deserves a more lenient 40-year prison sentence because he cooperated with authorities and even went undercover for the FBI, federal prosecutors said Monday.

Scott Rothstein, 47, could get the maximum 100 years when he is sentenced Wednesday by U.S. District Judge James I. Cohn. Prosecutors said in court papers that while Rothstein's crimes were "reprehensible," he deserved credit for "extraordinary" cooperation since his scam collapsed last fall.

That included voluntarily returning from Morocco, a country with no U.S. extradition treaty where Rothstein had fled after arranging for $16 million to be wired to a bank account there. He also helped the FBI nab a suspected Mafia operative by agreeing to wear a hidden recording device at meetings between the two and helped identify assets that are being seized and sold to benefit wronged investors.

Rothstein's scheme revolved around investments in supposedly lucrative confidential legal settlements that were fictional. Prosecutors said the total invested was $1.2 billion, with losses estimated at just over $429 million.

Rothstein's attorney, Marc Nurik, last week asked Cohn for a 30-year sentence, which prosecutors said is not enough to deter others from concocting similar scams. And Rothstein, in an emotional 12-page letter to the judge, took full responsibility for his crimes and insisted he will continue working from behind bars with federal investigators.

"While I am incarcerated and when and if I am released I will never stop working to heal the wounds I have opened," Rothstein wrote.

Rothstein also described how he contemplated suicide several times, going so far once to sit in his shower with a .357-caliber Magnum handgun to his head. He said he had chosen the shower because it would be easier to clean up afterward.

"I kept telling myself that it would be the perfect ending to the perfect life I had decimated," Rothstein wrote.

Ultimately, he decided to flee to Morocco instead, then changed course after another near-suicide and returned to face reality. That included lengthy debriefings with the FBI and undercover operations "on multiple occasions," he said, including unspecified political corruption investigations.

Rothstein, his wife and people who worked in his now-defunct law firm contributed hundreds of thousands of dollars to Democrats and Republicans, much of which has been returned.