Lawyer Admits Helping Ponzi Schemer’s Wife Hide JewlerySusannah Nesmith and David Voreacos
A Florida attorney who represented the wife of convicted Ponzi schemer Scott Rothstein pleaded guilty to conspiring to help her hide expensive jewelry from the Internal Revenue Service.
Scott Saidel, 45, admitted today in federal court in Fort Lauderdale, Florida, that he conspired to help Kimberly Rothstein sell jewelry, including a 12-carat diamond that she was supposed to turn over to federal authorities after her husband’s $1.2 billion Ponzi scheme collapsed in November 2009.
“He has accepted responsibility for his actions,” Saidel’s attorney, Tama Kudman, said outside of court after the hearing.
The Ponzi scheme orchestrated by Scott Rothstein involved persuading wealthy investors to buy stakes in what he said were payouts in confidential sexual harassment and workplace discrimination lawsuits. The cases were fabricated. Rothstein used forged court documents and phony bank records to sell the scheme to investors, including four hedge funds and several wealthy South Florida businessmen.
The scheme fell apart over Halloween weekend 2009 when he was unable to bring in new investors to pay off old ones. He fled to Morocco, but returned a few days later and has cooperated with federal authorities and the trustee appointed in the bankruptcy of his former Fort Lauderdale law firm, Rothstein, Rosenfeldt & Adler.
He’s serving a 50-year sentence after pleading guilty to racketeering, wire fraud and money laundering in 2010.
Saidel pleaded guilty to conspiracy to commit money laundering, obstruct justice and tamper with a witness. He faces as long as five years in prison when he is sentenced on June 7. He has already forfeited $65,000 and a pair of mother of pearl, sapphire and diamond cuff links to federal authorities.
He was charged last September with Kimberly Rothstein and three others. Kimberly Rothstein, who pleaded not guilty, was scheduled to change her plea tomorrow. That hearing was rescheduled today for Feb. 1, according to court records.
Kimberly Rothstein was charged with illegally hiding $1 million in jewelry from U.S. authorities trying to seize her husband’s assets to repay investors. Authorities said she lied to IRS agents trying to confiscate the jewelry, including a 12-carat yellow diamond ring. Rothstein amassed tens of millions of dollars in real estate, cars, boats, luxury watches, jewelry and sports memorabilia during his Ponzi scheme, authorities said.
After Scott Rothstein agreed to plead guilty and forfeit his illegal gains, Kimberly Rothstein held back some jewelry when federal agents showed up on Nov. 9, 2009, U.S. prosecutors said in court papers filed in Miami and Fort Lauderdale.
She and a friend sold some jewelry and joined others in covering up their actions by lying during bankruptcy proceedings, according to court papers.
Prosecutors are seeking forfeiture of five diamond rings, 10 watches, two bracelets, four necklaces, five pairs of earrings, 50 gold bars, and various coins from the U.S., Canada, South Africa, England and China.
Scott Rothstein was known for what he called his “rock star” lifestyle. He and Kimberly were 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.
His firm also donated millions to prominent politicians, including Senator John McCain, and to charitable causes.
Last year, Toronto-Dominion Bank agreed to settle a lawsuit with investors who claimed it aided in the Ponzi scheme. The will pay $170 million. It’s appealing a $67 million verdict in another investor lawsuit and faces suits from several other investors in the Rothstein scheme.
The case is U.S. v. Saidel, 12-cr-60204, U.S. District Court, Southern District of Florida (Fort Lauderdale).