Sept. 14 (Bloomberg) --Steven Lippman, a former attorney in the law firm of convicted Ponzi schemer Scott Rothstein who admitted helping the firm make illegal campaign contributions, was sentenced to three years in prison.
Lippman, 50, pleaded guilty in May to conspiracy to violate banking, election and tax laws. He said he helped Rothstein’s now-defunct law firm, Rothstein, Rosenfeldt & Adler, illegally “bundle” contributions to Republican John McCain’s losing campaign in 2008 against President Barack Obama. The firm was the largest contributor to McCain’s campaign.
Lippman also was fined $15,000 today in federal court in Fort Lauderdale, Florida, and ordered to pay $179,000 in restitution. He told U.S. District Judge James I. Cohn that he was “horrified” by his actions. He said he was taken in by the charms of Rothstein, who is serving 50 years in prison for running a $1.2 billion Ponzi scheme.
“The first mistake I made was an error in judgment regarding Scott Rothstein,” Lippman said. “I not only failed to ask the right questions, I agreed to do things that were wrong. Yes, he played me like a fool, but at the end of the day, I should have said no. That’s my fault.”
Cohn said he wasn’t swayed by letters that friends and family members wrote on Lippman’s behalf, or by the three people who testified for him. He said he gave Lippman some credit for amending four years of tax returns to show income that he had not initially reported to the Internal Revenue Service. Lippman changed the returns before he was charged criminally.
“Without question Mr. Lippman is an accomplished lawyer,” Cohn said. “He has a strong work ethic. He’s a good family man, and he’s helped a lot of people. But, also without question, Mr. Lippman is a very intelligent man. As such, he knew the legal requirements.”
The length of the sentence was less than the government asked for and more than the defense sought.
Prosecutors asked Cohn for a sentence within the advisory guideline range of 41 to 51 months.
Lippman’s attorney, Bruce Zimet, sought a sentence of no more than 18 months. He said Rothstein conned Lippman into moving money through his bank account and making illegal campaign donations.
Assistant U.S. Attorney Lawrence LaVecchio questioned how such an accomplished attorney could have been conned so easily.
“In the first half of this hearing we hear that he’s a brilliant attorney,” he said. “In the second half of the hearing, I hear he’s a veritable idiot who is easily manipulated into committing these acts.”
LaVecchio said Lippman “did it because he was making a lot of money at RRA and he wanted to keep the gravy flowing.”
He said Lippman went from earning less than $400,000 in 2004, the year before he started at Rothstein Rosenfeldt, to making almost $1.3 million in 2008.
“This will be with me for the rest of my life,” Lippman said as his family members sobbed in the front row of the courtroom gallery. “I’m going to be a felon for the rest of my life.
“I was a real lawyer,” he said. “I was doing real work. I worked as hard as anybody can work for their client. I’m just devastated that I can’t do that anymore.”
He admitted that he persuaded wealthy investors to buy stakes in what he said were payouts from settlements of sexual- harassment and workplace discrimination cases. He fabricated the cases, using forged documents and ruses such as having an accomplice pose as a bank officer.
The scheme fell apart over Halloween weekend in 2009 when Rothstein couldn’t lure enough new investors to pay earlier ones. After fleeing to Morocco, he returned to the U.S.
Rothstein was known for what he called his “rock star” lifestyle. He was married in the Versace mansion in Miami Beach -- Florida’s then-governor Charlie Crist was a guest -- and his car collection included a Rolls-Royce, a Bugatti, two Lamborghinis and a Maserati.
Toronto Dominion Bank (TD) agreed in February to settle a lawsuit with investors who claimed it aided in the fraud. TD Bank will pay $170 million, said Paul Singerman, attorney for the law firm’s bankruptcy receiver.
The case is U.S. v. Lippman, 12-cr-60078, U.S. District Court, Southern District of Florida (Fort Lauderdale).
To contact the editor responsible for this story: Michael Hytha at email@example.com.