Two Attorneys Charged in Connection with Rothstein Ponzi Scheme
|U.S. Attorney’s Office August 30, 2013|
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce the arrest of Douglas L. Bates, 54, of Parkland, and Christina M. Kitterman, 38, of Deerfield Beach. Arraignment for Bates is scheduled for September 4, 2013, and arraignment for Kitterman is scheduled for September 6, 2013, both before U.S. Magistrate Judge James M. Hopkins.
According to two indictments unsealed in court earlier today, Bates was charged with conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and wire fraud, in violation of Title 18, United States Code, Section 1343 (three counts). Kitterman was charged with conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349. Each of the aforesaid counts is punishable up to 20 years’ imprisonment and a fine of $250,000.00.
U.S. Attorney Wifredo A. Ferrer said, “As I have previously stated, the breadth, scope, and sheer complexity of Rothstein’s $1.2 billion Ponzi scheme is mind-boggling. The success of such a large-scale scheme depended on the complicity of Rothstein’s colleagues and associates, like Douglas Bates and Christina Kitterman. Bates and Kitterman, both attorneys, are the 15th and 16th individuals to face criminal charges in connection with this complex financial fraud.”
Acting SAC Michael J. De Palma stated, “Complex financial schemes such as the one orchestrated by Scott Rothstein do not occur in a vacuum. It is sad when you see two attorneys violate the public’s trust by using their law licenses to perpetrate a massive fraud. Together with our law enforcement partners, IRS-CI is committed to aggressively investigating and bringing to justice those who knowingly assist in perpetrating investment scams.”
“The FBI tirelessly pursues those who defraud investors,” said Michael B. Steinbach, Special Agent in Charge, FBI, Miami. “As attorneys, Bates and Kitterman took an oath to act with fairness and integrity but chose to violate that oath to assist Rothstein with perpetrating his massive fraud scheme.”
The acts set forth in the charging documents were all in furtherance of a Ponzi scheme involving the sale of purported confidential settlement agreements in sexual harassment and/or whistle blower cases which were purportedly handled by attorneys at the former Ft. Lauderdale law firm of Rothstein, Rosenfeldt and Adler P.A. (RRA).
The indictment against Douglas Bates charges that, while he was a partner in the Law Offices of Koppel and Bates, located in Plantation, Florida, he assisted Scott W. Rothstein in defrauding certain clients of RRA by creating a fraudulent and fictitious settlement letter purporting to resolve certain civil litigation to the benefit of RRA’s clients when, in fact, Bates did not represent the alleged party and no such litigation had ever been instituted. Additionally, the indictment charges that Bates drafted false and fraudulent opinion letters claiming to represent an investment group that had a business plan to invest in the confidential settlements that formed the basis for the Ponzi scheme when, in fact, he did not, and claiming that he represented a plaintiff who had entered into one of the confidential settlement agreements when, in fact, he did not. The indictment further alleges that Bates assisted Rothstein by arranging to have representatives of an investment group falsely informed that numerous legal cases were referred by Koppel & Bates to RRA when, in fact, they were not.
The indictment against Christina Kitterman charges that, during the course of the Ponzi scheme, and while she was employed as an attorney at RRA, Kitterman falsely posed as the head of the Ft. Lauderdale office of the Florida Bar Association during a meeting with certain investors and falsely claimed that certain of the RRA bank accounts had been frozen in connection with a pending Bar investigation of Rothstein. According to the indictment, this was done in order to explain to the investors the reason why certain payments due to them had not been made.
Mr. Ferrer commended the investigative efforts of IRS-CI and the FBI. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, Jeffrey N. Kaplan, and Evelyn B. Sheehan.
An indictment is only an accusation, and a defendant is presumed innocent unless and until proven guilty.