Federal prosecutors took their next step Monday in stripping Ponzi schemer Scott Rothstein of all the worldly possessions he left behind when his massive fraud scheme blew up last fall.
Rothstein had already agreed to give up tens of millions of dollars in cash, multimillion dollar homes, exotic sports cars, hundreds of pieces of jewelry, and his interests in dozens of businesses as part of his January plea agreement.
But there has been little action on the forfeiture front, as prosecutors and the bankruptcy trustee for Rothstein's defunct law firm have quietly battled behind the scenes over control of the assets caught up in the criminal case.
U.S. District Judge James Cohn, who is overseeing the criminal case, ordered prosecutors to make a decision by 2 p.m. Monday on whether they would seek forfeiture of the assets.
Prosecutors beat the deadline, and they have targeted more than $75 million in assets.
They are seeking to lay claim to 24 properties Rothstein either owned or had an interest in, for which he paid $47 million; 20 exotic cars, including Ferraris, Lamborghinis and Bentleys; three yachts worth more than $5 million; more than 300 pieces of jewelry, including watches, necklaces and earrings; 20 bank accounts containing $20 million; and Rothstein's interests in two dozen businesses and more than 100 corporations.
The filing of the court documents sets the next stage in the forfeiture proceedings. The bankruptcy trustee has repeatedly claimed in court filings that the assets seized by prosecutors actually belong to Rothstein's law firm, because Rothstein used funds that flowed through his law firm trust accounts to run his Ponzi and buy the assets. Similar disputes have taken place in the Bernard Madoff Ponzi scheme and other fraud cases.
If the judge approves the prosecution's motion for forfeiture, the bankruptcy trustee can then begin filing legal claims against the assets.
Rothstein, 47, pleaded guilty to five federal felonies and faces up to 100 years in prison at his May 6 sentencing. He is the only one to be charged so far in the far-reaching federal investigation.
Prosecutors seek to forfeit more than $75 million in Rothstein assets
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