Rothstein lied to us, prosecutors tell judge

Court filing says Ponzi schemer shouldn’t get cut in 50-year term

Notorious Ponzi schemer Scott Rothstein won’t be catching any breaks on his 50-year prison term after federal prosecutors filed court records Tuesday saying he lied to them and doesn’t deserve any sentence reduction.

Rothstein pleaded guilty to several federal charges after his Ponzi scheme imploded during the Halloween weekend in October 2009. The now-disbarred lawyer was caught operating a $1.4 billion fraud at his Fort Lauderdale law firm offices nearly eight years ago.

He initially cooperated with prosecutors, and they had planned to recommend reducing his prison sentence.

But they withdrew that offer Tuesday, saying Rothstein broke the terms of his binding, legal agreement with them by lying.

“In the judgment of the United States, the de-

“I think it’s over for Scott. If you make a cooperation agreement with the feds, you have to be 100 percent in.” Fred Haddad, attorney

fendant provided false material information to the government and violated the terms of his plea agreement. Therefore, in the exercise of its sole discretion, the government moves to withdraw the previously filed motion,” prosecutor Lawrence LaVecchio wrote in a court document filed Tuesday.

Though prosecutors didn’t provide details, they previously have said in court that Rothstein lied to them and hid some of his assets. They also said he concealed that his now exwife, Kim Wendell Rothstein, tried to hide more than $1 million worth of assets, mostly jewelry, from them. She was convicted of hiding assets and served more than 15 months in federal prison.

Investigators uncovered Scott Rothstein’s false testimony during their investigation, and they found and seized the hidden property.

Defense attorneys, who represented some of the 30 or so defendants who were convicted of related crimes, said Rothstein gave misleading testimony about their clients. Rothstein spent several days giving sworn depositions about his, and other people’s, misdeeds to criminal prosecutors and civil attorneys.

He also testified in the trial of one of his former employees, Christina Kitterman, in federal court in West Palm Beach. She was convicted and is still imprisoned.

Rothstein, 55, is serving his punishment in the federal Bureau of Prisons’ top secret witness protection program for inmates. Authorities have said he is in a prison facility but no details about his location have been released. He was placed there because he helped authorities arrest and convict at least one defendant who had Mafia ties.

In January 2010, Rothstein pleaded guilty to several racketeering, moneylaundering and mail- and wire-fraud conspiracies, as well as two counts of wire fraud.

Rothstein’s defense attorney, Marc Nurik, plans to object to the government’s decision but has not filed his response yet, according to court documents. Nurik did not respond to calls for comment Tuesday, but other criminal defense lawyers said there is nothing he can do.

Senior U.S. District Judge James Cohn could hear arguments from both sides but hasn’t yet indicated whether he will do so.

Federal judges usually follow the recommendations of prosecutors in cases where a defendant cooperates in the investigation. But prosecutors make those recommendations at their “sole discretion,” according to court records and case law.

The U.S. Attorney’s Office in South Florida routinely recommends sentence reductions of 10 percent to 30 percent for cooperating defendants who help their investigations. In extraordinary circumstances, they have recommended 50 percent reductions in punishment.

Fred Haddad, a veteran criminal defense attorney who knew Rothstein well, said Rothstein broke the cardinal rule for criminals who decide to cooperate with federal prosecutors.

“I think it’s over for Scott,” Haddad said. “If you make a cooperation agreement with the feds, you have to be 100 percent in. You can’t go down that slippery slope and start lying to them.”

Haddad called prosecutors LaVecchio and Jeffrey Kaplan, who handled most of the case, “two of the straightest shooters in the world.”

“He violated his agreement with the feds and they won’t take that. It’s their integrity and their reputations at stake and they are not going to let a defendant lie to them,” Haddad said. “That’s explained very clearly going in to the agreement.”

Kitterman’s attorney, Valentin Rodriguez, said prosecutors have made the right decision. He recalled Rothstein’s braggart testimony in his client’s trial.

“He lied to prosecutors when they debriefed him and you just can’t do that when you have a cooperation agreement,” Rodriguez said. “When he testified in Christina’s trial, he was not humble at all, he was proud of what he did. He kind of boasted about how he corrupted the whole system. He was thumbing his nose at the entire justice system and you can’t expect to be rewarded for doing that.”

Federal inmates who behave appropriately while they are locked up are rewarded with 15 percent time off for good behavior — and Rothstein still will qualify for that common reduction.

With standard time off for good behavior, Rothstein can expect to serve a total of 42 ½ years in prison and would be eligible for release sometime in the year 2052. He would be about 90 years old.

Rothstein