In July of 2010, Scott Rothstein was sentenced to 50 years in prison for running a US$1.2 billion Ponzi scheme from his Florida law firm. DH Gatsby
EXECUTIVE SUMMARY: Money Laundering & Scott Rothstein
In July of 2010, Scott Rothstein was sentenced to 50 years in prison for running a US$1.2 billion
Ponzi scheme from his Florida law firm.
Rothstein had two types of schemes. He persuaded clients/investors to purchase hundreds of millions of dollars of structured settlements at a discounted price so that he could generate immediate revenue from false settlements. Through the use of his law firm he fabricated court orders, forging the signatures of federal court judges, that showed that…show more content…
The paper trail would give warranted reasons for suspicion.
The con revolved around the law firm settling numerous lawsuits and that the plaintiffs wanted to expedite the receiving of their funds. Rothstein would sell their settlements at a lump-sum discount so they could receive their funds up front to another individual/firm. In return, Rothstein promised investors substantial returns on the full value of the fraudulent settlement.
Alongside a financial review, I would inquire into Rothstein 's personal communication with staff and external colleagues. Obtaining computer, email and telephone information would give me the greatest access to his communication.
I would also contact all of his registered clients and confirm their information with the information Rothstein has provided.
Three Step Money Laundering Process
Placement Phase: Illegal puts money in. Creates fake settlements to interest purchasers out the to buy out the settlements at a discounted rate.
Layering Phase: Move money around. Once he created the settlement, he would receive cash payments for them at a discounted rate. In another ploy, in order for Rothstein to recover the money, his clients had to post bonds worth millions of dollars with his firm.
Integration: Rothstein would move the funds in several ways so that it would offer the illusion of being legitimate sources of income. In several cases, he