U.S. Attorney’s Office Reaches Forfeiture Settlement with RRA Liquidating Trustee
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that the United States Attorney’s Office has reached a forfeiture settlement, subject to court approval, with Michael I. Goldberg, Esq., the Liquidating Trustee for Rothstein, Rosenfeldt & Adler PA (“RRA”), globally resolving all issues between RRA’s bankruptcy estate and the United States relating to forfeiture and restitution matters in connection with the criminal prosecution of Scott W. Rothstein (“Rothstein”). The proposed settlement follows Rothstein’s 2010 guilty plea to conspiracy to violate the RICO statute in violation of Title 18, United States Code, Section 1962(d); conspiracy to commit money laundering in violation of Title 18, United States Code, Section 1956(h); conspiracy to commit mail fraud and wire fraud in violation of Title 18, United States Code, Section 1349; and two counts of wire fraud in violation of Title 18, United States Code, Section 1343. Rothstein was sentenced to 50 years in prison and was ordered to pay restitution to 320 victims of the scheme. Since Rothstein’s conviction, approximately 24 other defendants have been convicted in connection with the scheme.
The United States sought forfeiture of a vast array of real property, luxury boats and vehicles, bank accounts, jewelry, and investments valued at approximately $50 million. According to court documents, the parties will seek approval of the settlement agreement by both the U.S. Bankruptcy Court overseeing RRA’s bankruptcy and the U.S. District Court handling the underlying criminal case. Upon approval of the settlement agreement, the parties have agreed to the entry of a final order of forfeiture for assets sufficient to satisfy the U.S. District Court’s restitution orders. The United States has expressly agreed to restore all forfeited assets and proceeds from those assets to satisfy the restitution orders entered in the criminal case.
Further, subject to court approval, the settlement agreement provides an equitable mechanism that will allow for all non-subordinated victims to be paid in full and for the RRA bankruptcy estate to receive a distribution in the approximate amount of $21 million from the assets seized by the United States in connection with Rothstein’s criminal prosecution. The full restitution to the qualifying victims is possible through a combination of forfeited funds as well as funds obtained by the victims through the bankruptcy proceedings, federal and state proceedings and other collateral sources.
The settlement agreement also provides for the appointment of Michael I. Goldberg, Esq., as the “Restitution Receiver” responsible for distributing the restitution funds to qualifying victims in accordance with the terms of the agreement and the eventual amended restitution order (which shall account for all collateral sources of recovery pursuant to Title 18, United States Code, Section 3664(j)).
U.S. Attorney Wifredo A. Ferrer stated that “This case demonstrates our commitment to work tirelessly to return stolen assets to the victims of the financial crimes perpetrated by Scott Rothstein’s criminal network. Today’s settlement is the culmination of many years of relentless work to maximize forfeiture to obtain restitution for the victims of Rothstein’s fraud consistent with the Department of Justice Asset Forfeiture Program and the Mandatory Victims Restitution Act.”
IRS-CI Acting Special Agent in Charge Donnell Young stated, “IRS-CI enforces the nation’s tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others. We are pleased with today’s settlement agreement to return assets to the victims of this case, and will continue to work with our law enforcement partners to assist in dismantling criminal enterprises and forfeiting their assets.”
“In addition to bringing fraud perpetrators to justice, a top priority for the FBI is seizing assets obtained through fraud in order to compensate victims,” said Acting FBI Special Agent in Charge Kelly M. Darden, Jr. “For many fraud perpetrators, taking their assets removes most or all benefit they obtained by their crimes.”
Mr. Ferrer commended the investigative efforts of the IRS-CI and the FBI. The criminal case was prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan. The forfeiture proceedings were handled by Assistant U.S. Attorneys Michelle B. Alvarez, Evelyn B. Sheehan, and Alison W. Lehr. The appeal of the forfeiture proceedings was handled by Assistant U.S. Attorney Madeleine R. Shirley.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.