Scott Rothstein was sentenced to 50 years in prison for his role in the
operation of a $1.2 billion
Ponzi scheme. Rothstein pled guilty in January to running the Ponzi scheme in which
he sold stakes in legal settlements, in which people sell large settlements
in legal cases for lump sums of cash at a discounted rate. Rothstein told
investors that they would profit, claiming a sixty-percent return on their
investment, when the legal settlements were paid in full.
The sentence was 10 years longer than federal prosecutors had requested
(and 20 years longer than Rothstein had asked for). Rothstein faced a
maximum sentence of 100 years on the five felony counts. Rothstein and
his co-conspirators created false documents, including fake settlements
and court orders, to sell the deals to investors.
Rothstein Ponzi scheme has been tied to at least one broker-dealer, HighTower
Advisors LLC of Chicago and one of its brokers, Curtis Lyman, who allegedly provided money to
Rothstein from a feeder fund investment he sold to his clients. Mr. Lyman,
an adviser based in Palm Beach, Florida, sold promissory notes to his
clients issued by Banyon 1030-32 LLC. Capital raised through the Banyon
notes was then routed to disbarred Florida lawyer Scott Rothstein.