Nov. 4 (Bloomberg) -- Scott Rothstein, the South Florida lawyer whose firm asked federal prosecutors to investigate as much as $500 million in missing investor funds, returned yesterday to the U.S. from Morocco, his law partner said.

Rothstein came back of his own volition and wasn’t in police custody, said Stuart Rosenfeldt, co-founder of the firm Rothstein Rosenfeldt Adler PA in Fort Lauderdale. Rothstein, a Republican fundraiser whose lifestyle included multimillion- dollar homes, luxury cars, a yacht and a 24-hour police guard at his home, earlier transferred $16 million to Morocco, Rosenfeldt said in a phone interview.

Rothstein Rosenfeldt on Nov. 2 sued Rothstein, one of the firm’s two owners, in Florida state court, asking a judge to appoint a receiver to dissolve the firm and manage its finances. Rosenfeldt told authorities about the possible misappropriation of funds by Rothstein, 47, who raised money for former president George W. Bush and Florida Governor Charlie Crist.

“I feel betrayed, I feel sad, and I feel embarrassed,” Rosenfeldt said. “He didn’t have to do this. He was a frickin’ good lawyer.”

The firm discovered last week that Rothstein, its chief executive officer, may have stolen millions of dollars from a side business that dealt in legal-case settlements, Kendall Coffey, a lawyer representing the firm, said in an interview.

Meeting With Authorities

At a hearing yesterday on the request for a receiver, Coffey said Rothstein was thought to be “in meetings with federal authorities” in Florida. State court Judge Jeffrey Streitfeld chose retired Miami Judge Herbert Stettin as the receiver for the law firm.

Marc Nurik, an attorney representing Rothstein, didn’t return voice-mail messages seeking comment.

Rosenfeldt said the firm discovered evidence of the $16 million transfer to an account in Morocco and e-mails showing Rothstein made reservations at the Hyatt Regency Hotel in Casablanca.

Rosenfeldt said Rothstein sent a firm-wide e-mail asking his colleagues, on behalf of an unnamed client, for information about countries that don’t extradite fugitives to the U.S. Morocco was one of the countries lawyers identified, he said.

Rothstein returned to Fort Lauderdale after telling Rosenfeldt he was considering suicide, the South Florida Sun- Sentinel reported today.

In addition to his fundraising for candidates, Rothstein contributed about $334,000 to the Republican Party of Florida during the past two years, a party spokeswoman said.

Founded in 2002

Rothstein and Rosenfeldt founded the 70-lawyer firm in 2002, according to court papers filed in the dissolution request. The firm initially specialized in labor and employment law and grew to include intellectual property, real estate and criminal defense work, court papers say.

Rothstein controlled all aspects of firm management, including its finances, the firm said in its court complaint. The firm had offices in Florida, New York and Venezuela.

Rothstein was selling investors the right to collect legal settlements due to be paid within a fixed period of time. An investigation by the firm found that Rothstein was selling investments in non-existent legal claim settlements, Rosenfeldt said.

Rosenfeldt said a group of trust accounts set up by Rothstein, which reflected about $500 million on Oct. 23, were empty a week later.

Absent Money

“A review of the firm’s records undertaken over this past weekend indicates that various funds unrelated to the practice of law cannot be accounted for,” the firm said in its court petition.

None of the settlements that Rothstein tried to sell investors involved clients of the firm, Rosenfeldt said.

The firm is investigating whether Rothstein fraudulently used regular trust accounts at the firm, said Coffey, a former U.S. attorney now in private practice in Miami.

Alicia Valle, a spokeswoman for acting U.S. Attorney Jeffrey Sloman in Miami, declined comment on the case today.

“Rothstein gave money to everybody, politicians and former politicians,” Grey Tesh, a criminal-defense lawyer in West Palm Beach, Florida, said in an interview. “He was a friend of Crist and of any politician with reach.”

Florida State Representative Ellyn Bogdanoff, a Republican, is prepared to return about $11,000 in Rothstein contributions made in connection with a September fundraiser, Todd Richardson, a Bogdanoff consultant, said in an interview.

More Returns

“I think you’ll see more people doing it in the next few days,” Richardson said. “It’s the only thing to do.”

Crist’s campaign will return $9,600 in personal contributions from Rothstein and his wife, Dane Eagle, finance director for the campaign, said today in a statement.

Rothstein made in-kind, personal and law-firm contributions of about $148,000 to the Republican Party of Florida in 2009, and about $186,000 in personal and law-firm contributions in 2008, said a local party spokeswoman, Katie Betta.

The state Republican party plans to return the contributions to prosecutors, Betta said.

While Rothstein recently began donating to Democratic causes, his donations were driven by business interests, not partisan politics, Broward County Democratic Party Chairman Mitchell Ceasar said in an interview.

“Rothstein has been the talk of the town for years,” Ceasar said. “No one could figure out how the firm operated, how he had these spending habits. In this case, where there was smoke, there’s a forest fire.”

College, Law School

Rothstein graduated from Nova University Law Center in 1988 after receiving a bachelor’s degree from the University of Florida in 1984, according to the firm Web site.

He owns homes in Florida and New York and two homes on Bluff Hill Cove Farm Road in Narragansett, Rhode Island valued at $1.9 million and $2.5 million, according to public records. He also has a Lamborghini, a BMW, Cadillac, two Ferraris, two Rolls Royces, two Mercedes and three Porsches, according to Florida motor vehicle records.

Rothstein contributes to charities such as the Weston, Florida-based Dan Marino Foundation, which helps children with special needs, and Fort Lauderdale’s Downtown Jewish Center- Chabad, according to Candice Russell, a Florida journalist who profiled him for Los Olas Lifestyle magazine.

Marino Foundation CEO Mary Partin was unavailable for comment, as was Rabbi Schneur Kaplan of the Jewish Center. Rothstein donated $205,000 to the American Heart Association in the past three years, the nonprofit group said in a statement today.

The law firm’s case is Rosenfeldt v. Rothstein, 09059301, Circuit Court, 17th Judicial Circuit, Broward County, Florida (Fort Lauderdale).

To contact the reporters on this story: Carlyn Kolker in New York at ckolker@bloomberg.net; Bob Van Voris in New York at rvanvoris@bloomberg.net; Cynthia Cotts in New York at ccotts@bloomberg.net.

Last Updated: November 4, 2009 17:11 EST