Scott Rothstein Takes Witness Stand In Trial Of Former Employee

, Daily Business Review

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Scott Rothstein
Scott Rothstein

Looking trim and fit, Scott Rothstein testified Wednesday at the federal trial of a former colleague at his fraud-ridden Fort Lauderdale law firm on subjects ranging from political influence with former Gov. Charlie Christ to romantic affairs.

It was the first time Rothstein has appeared in public to testify since a civil deposition in 2012, and he did not disappoint.

In a blue-collared shirt and jeans, a relaxed Rothstein reiterated his earlier statements that the other name partners at his firm, Stuart Rosenfeldt and Russell Adler, a TD Bank official and a South Florida hedge fund manager, knew about his $1.2 billion Ponzi scheme.

None of them has been charged in the settlement financing fraud that used forged judges' signatures.

Rothstein, who is serving a 50-year prison sentence, is testifying for the defense in the trial of Boca Raton attorney Christina Kitterman, who worked at RRA before it collapsed in October 2009. He was taken out of turn on the third day of her wire fraud conspiracy trial because of costs associated with his security.

Kitterman is accused of pretending to be a Florida Bar official in a phone call with Rothstein's investors to keep money flowing from New York hedge funds.

Kitterman's attorneys, Val Rodriguez and Peter Feldman, maintain she never identified herself as a Florida Bar attorney but joined a conference call after Rothstein introduced her.

Officials with Platinum Partners LLC said the woman they spoke to backed up Rothstein's lie that he was under investigation by The Florida Bar.

Kitterman is accused of pretending to be Adria Quintela, an investigator in The Florida Bar's Fort Lauderdale office.

Rothstein testified Kitterman knew she was pretending to be Quintela and would be lying on the phone to Platinum president Ari Glass about 26 fictitious bar complaints.

"Ms. Kitterman over a period of several years had already engaged in illegal activity with the law firm. She was not new to this," said Rothstein, who was known at the firm for his bombastic and overbearing personality.

He testified it wasn't unusual for attorneys and staff at the firm to perform—without question—illegal or unethical acts without knowing the full extent of his Ponzi scheme.

"I did not tell her I was going to cheat anyone," Rothstein said. "I asked her to lie."

Rothstein said he was mistaken in a 2011 civil deposition when he identified the person who pretended to be Quintela as a law firm paralegal, not Kitterman.

'Not Happy'

Within minutes of taking the stand, Rothstein talked up his connections to then-Gov. Charlie Crist, who named the Rothstein Rosenfeldt Adler chief to the judicial selection committee for the Fourth District Court of Appeal.

"I was able to convince the governor to do a lot of things," said Rothstein, who was a guest at Crist's wedding and hosted the governor at his luxurious waterfront mansion.

"My job was to be the governor's voice on the commission," Rothstein told a jammed courtroom. He bragged he also influenced Crist to name judges Rothstein wanted in place on the bench.

Members of the Judicial Nominating Commission are appointed by the governor and deliver the names of up to six finalists to fill courthouse vacancies.

Rothstein, sporting a crew cut and goatee, said he and Kitterman had "a physical relationship from time to time" and talked about "making out" with her in the restroom of the Anthony's Runway 84 restaurant in Fort Lauderdale.

Kitterman has denied having an affair with her former boss, and the testimony clearly took the defense by surprise.

Asked by Rodriguez if he liked being in court, Rothstein said: "I am not happy about being here. I am upset that it has gotten to this point where I have to testify against someone or for someone I care about."

He agreed with Rodriguez that one of his mottoes was "steal from the rich and give to the richer."

On another subject, Rothstein said he routinely paid Broward sheriff's deputies to do his bidding.

Assistant U.S. Attorney Lawrence LaVecchio interrupted that line of questioning without explanation and asked for a sidebar. Senior U.S. District Judge Daniel T.K. Hurley in West Palm Beach cut off Rodriguez, whose questioning switched to another direction.

Rothstein previously acknowledged hiring Broward deputies and Fort Lauderdale police for personal duties. Questions about their service to Rothstein have not produced any criminal charges. Time runs out for federal prosecutors to charge people in Rothstein's fraud in November.

'Consider The Source'

Rothstein is testifying out of order as a defense witness for the convenience of federal agents because he is detained at a secret location after testifying for prosecutors in a mob-related sting shortly after he surrendered. Rothstein testified he laundered money through his law firm for an associate of organized crime.

He also said he directed his wife, Kim Rothstein, to hide assets after he fled to Morocco following the collapse of the scheme. Rothstein said that because he wasn't honest with prosecutors about his role in hiding assets, which included diamond rings, his cooperation agreement to reduce his sentence is in jeopardy.

He also implicated numerous people while on the stand. He said former RRA attorney David Boden practiced law even though he wasn't licensed in Florida.

He also said he changed his mind about whether George Levin, CEO of Banyon Investments, knew of the Ponzi scheme. Debra Villegas, the law firm's COO, testified Tuesday that Levin knew the law firm's finances were cooked.

Prosecutors chose to call Villegas as witness, as opposed to Rothstein, to set the foundation for the Ponzi scheme. Prosecutors fought to keep Rothstein from the stand at public expense, but Hurley granted a defense motion to bring him to court.

Rothstein said Banyan's top executive, ex-convict Frank J. Preve, was an architect in the scheme and helped invent lies to keep it afloat.

As the top feeder fund, Banyan pumped $775 million into the fraud, and Rothstein testified Preve was in on the Florida Bar scheme.

Rothstein also said he paid a TD Bank official, believed to be former regional vice president Frank Spinosa, up to $75,000 to create fake documents to assure investors their money was safe in law firm accounts.

Miami attorney Sam Rabin rejected Rothstein's accusations against his client, Spinosa, as untrue.

"One need only consider the source," Rabin said. "Mr. Rothstein has no credibility due to the numerous lies, misrepresentations and false accusations. Even the government now declines to vouch for him or call him as a witness."

Rosenfeldt's attorney, Bruce Lehr, a partner at Lehr Levi & Mendez in Miami, asked, "Who would take the word of a proven pathological liar?" Rosenfeldt is expected to be called later as a defense witness.

Attorney William Scherer, a partner at Conrad & Scherer in Fort Lauderdale who represents numerous Rothstein investors and was involved in two rounds of civil depositions by Rothstein, said Rothstein's testimony was "accurate from everything I know."

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