"We were on the short list, and we kind of got disinvited," said Rhett Traband, who represents Caro Group, which claims a $10 million investment loss. "I feel like I had a prom date and lost it."
Sheesh Rhett, I sure know what that's like (see above).
I bless my lucky stars every day I don't have to think about bankruptcy court and the odd quirks of its jurisdictional reach, the appropriate scope of and standard for district court review, and what can and can't be heard there and why.
(We have geeks skilled bankruptcy specialists for that.)
That's why when I read this important opinion from Judge Marra (involving Judge Stettin, the Rothstein bankruptcy, and TD Bank), I promptly forgot all about it and went to lunch.
Then, as my food was digesting nicely, I felt a sudden rumble in my belly and remembered I forgot to write anything at all about it.
Rothstein said in a marathon deposition that he even enlisted a paralegal employed by his partner, Stuart Rosenfeldt, to pose as a Florida Bar staffer in a phone call with worried investor Ari Glass and his lawyer.
"I had given her a script to refer to about what was going on, what questions she should answer," Rothstein testified in the deposition. "I told her specifically that when they ask for something that she couldn't think up an answer for to just say that pursuant to the Bar rules she couldn't answer that type of question, that was her escape vow, so to speak."
Hey, why should that raise any alarm bells? Have you seen this guy's private elevator?
"I'm doing this because I make a living at it, and I do good deeds,"Rosenfeldt, 56, of Boca Raton, told the Sun Sentinel in an interview.
Oy does this man know how to sweet-talk the press!
This is like one of those Bar proceedings where you bring in someone like Sandy Bohrer to vouch for your general good character, except here Stuart is vouching for himself.
As Alvy Singer quiped in Annie Hall, don't knock masturbation -- it's sex with someone I love.
I recently had the great pleasure of rewatching Jimmy Caan's best film, Thief, where he plays a Chicago freelance diamond thief dreaming of a better life who gets sucked into working for a local mob kingpin for what Caan thinks is one final heist.
Of course the mobster, brilliantly played by Robert Prosky, has other, longer term plans for the profitable crook.
Naturally we are in a very different context, yet for whatever reason I'm reminded of this superb story line when I read the curious settlement terms reached by receiver Herb Stettin and Russ Adler in the Rothstein bankruptcy, which involves Russ handing over a portion of his settlements or judgments should he be successful in future cases:
The settlement stipulates Adler will pay off the settlement by liquidating a $90,000 IRA and by providing liens on any attorney fee recoveries. The lien is 50 percent on lawsuits Adler prosecuted while at RRA and 15 percent afterward.
So now they're in business together? And Russ is now working to pay off the settlement by trying to settle cases he either has in the hopper or may one day have in the hopper.
This is allegedly due to his current financial situation:
Critical to determining settlement was a detailed analysis of the Adlers’ current financial condition, which based upon mediation related financial disclosures revealed that the Adlers have no existing bank, securities or other accounts upon which to execute, no equity in their home, leased vehicles and no other liquid non-exempt assets that could be used to satisfy any potential judgment. Further, it appears as if the Adlers may be subject to an IRS notice of lien or other action in an approximate amount of $234,000 and Mr. Adler could be facing other types of exposure in potential Florida Bar or criminal proceedings. Thus, the Trustee could have spent a significant amount of money to prepare for and conduct a lengthy trial which he believes would have resulted in a favorable jury verdict, but the likelihood of a successful collection on any such judgment would have proven difficult.
So who's the winner here -- is this a brilliant move by Adler, a smart move by the trustee, or something else entirely?
So there I was in Morocco, at the runway, and at the last moment I double crossed Renault, forcing him at gunpoint to assist in our escape.
Then, suddenly, I make Ilsa board the plane to Lisbon with her husband, telling her she would regret it if she stayed: "Maybe not today, maybe not tomorrow, but soon and for the rest of your life." I then walked off into the fog, remarking "Judge C, I think this is the beginning of a beautiful friendship."
By Davis's estimate, it took 12-15 minutes to get from the rig to the work boat, but it would take another 36-40 hours before they were to return to shore – even though there were dozens of boats in the area and Coast Guard helicopters airlifting the most severely injured to hospital.
Some of the men were openly furious, while others, like Davis, were just numb. He says they were denied access to the onboard satellite phone or radio to call their families.
When the ship finally did move, it did not head for shore directly, stopping at two more rigs to collect and drop off engineers and coast guard crew before arriving at Port Fourchon, Louisiana.
The company was ready for the men then, with portable toilets lined up at the dock for drug tests. The men were loaded on to buses, given a change of clothing and boxes of sandwiches, and taken to a hotel in Kenner, Louisiana, where finally they were reunited with their families.
Lawyers say the isolation was deliberate and that Transocean was trying to wear the men down so they would sign statements denying that they had been hurt or that they had witnessed the explosion that destroyed the rig.
"These men are told they have to sign these statements or they can't go home," said Buzbee. "I think it's pretty callous, but I'm not surprised by it."
Davis had been awake nonstop for about 50 hours by that point. He signed. Buzbee says most of the men did.
Hey, a contract's a contract.
Oh hail, let's see what the Resplendent Ones have been up to:
Although additional allegations of fact were inserted into the complaint as it progressed through its steps, and the legal theories of recovery were supplemented and modified, the substantive factual situation remained the same as that found in the original complaint—a slip and fall on property for which Riscomp was responsible.
At the time the agreed order was entered, the tenant was represented by attorneys at the firm of Rothstein Rosenfeldt Adler (“RRA”) in Ft. Lauderdale, Florida. On Sunday November 1, federal authorities seized the law firm premises in connection with an alleged Ponzi scheme carried out by the law firm’s senior partner, Scott W. Rothstein.
Turmoil at the law firm ensued. According to the attorneys, the firm no longer had an ability to issue trust account checks. It was therefore necessary for the tenant to obtain cashier’s checks to deposit in the court registry. On Monday November 2, the tenant obtained two official checks issued by Citibank, each in the amount of $21,400, for a total of $42,800. On November 3, the tenant provided these checks to counsel. Counsel arranged for one of the RRA law firm’s in-house couriers to deliver the checks to the registry of the court inMiami. The same day counsel served a notice of payment to the court registry and attached copies of the Citibank checks.
However, during the work day on November 3, the law firm employees were informed that they would no longer be paid. Many employees, including the one or ones responsible for delivering these checks, walked off the job. Accordingly the November 3 deadline passed without the checks being deposited in the registry of the court.
On November 4, counsel learned of the nondelivery of the checks. Counsel personally took the checks to the court registry in Miami on November 4 but the clerk refused to accept the checks because they were tendered a day late.
Judge Gersten says the "trial court may not consider the reasons why the deposit was not made," though he offers some "rachmones" to the displaced, totally-screwed tenant.
That's nice, says Judge Cope, but the tenant might have preferred a little justice with his schmaltz.
This morning, Mr. Goodman was arrested at the Four Seasons Hotel in Miami and charged with DUI manslaughter and vehicular homicide. (Click here to see the police photo.) He was released on $100,000 bail.
A quick review: Mr. Goodman was returning from a late night at his polo club when he crashed his Bentley into 23-year-old Scott Wilson’s Hyundai. Mr. Wilson’s car tumbled into a canal, where it laid upside down and caused Mr. Wilson to drown, police say. Mr. Goodman’s blood alcohol level was later tested and found to be at .177, well over the .08 legal limit.
Police say Mr. Goodman waited nearly an hour to call police and didn’t make an attempt to help Wilson.
Mr. Goodman’s attorney, the famed Miami defense lawyer Roy Black, said in a statement that “Mr. Goodman intends to vigorously defend himself against the criminal charges while continuing to do all within his power to minimize any further suffering by the Wilson family. After thoroughly reviewing the facts available to us, the defense team believes that the arrest warrant and charges reveal only a part of the whole story. Mr. Goodman is entitled to his day in court. We ask that the public and the media not rush to judgment until all of the facts are known.”
Hmm, the Four Seasons, "polo magnate," a Bentley, car crash, waiting an hour, is this that Tom Wolfe book with Tom Hanks?
Meanwhile, Warren Sapp is somehow involved in the Rothstein mess.
And he's doing it for, well, I'll let him explain it:
Petitioner is represented in the instant forfeiture proceeding by the law firm of Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, P.L. ("Farmer Jaffe Weissing"). SFL note -- too long, fellas!! Farmer Jaffe Weissing have undertaken the representation of Petitioner, and more than forty (40) others similarly situation individuals (the "Farmer Jaffe Weissing Petitioners"), and has agreed not to take any portion of the subject trust fund for payment of the attorneys' fees incurred in this action. Rather, Farmer Jaffe Weissing will seek only a court awarded fee over and above the amounts owed to the Petitioners. Petitioners' counsel's interest in this proceeding is to obtain justice for the Petitioners, who seek the return of their settlement monies which were held in IOTA legal service trust accounts for their benefit by their former attorneys, Rothstein Rosenfeldt Adler, P.A. (RRA).
Oy, this is one you'll get ribbed about by your out of town lawyer friends who just don't "get" how we do things in Florida:
A distinguished group of Florida business and civic leaders is in Tallahassee this week brushing up on their leadership skills, attending a low country boil and rubbing elbows with past and prospective governors of the state.
In attendance as a member of Leadership Florida is none other than Stuart Rosenfeldt, the former law partner of Fort Lauderdale’s con man extraordinaire, Scott Rothstein.
Rosenfeldt is one of 55 hand-picked members of the leadership organization’s current class, apparently chosen before his Rothstein Rosenfeldt Adler law firm collapsed in bankruptcy last fall and his ex-partner went to a federal lock-up for running a $1.2 billion Ponzi scheme.
Rosenfeldt has denied any knowledge of the scam but is under investigation by the Florida Bar and is being sued by lawyers handling the law firm’s bankruptcy, who contend he was grossly overpaid with proceeds from the Ponzi scheme and must repay $9.5 million.
Rosenfeldt could not be reached late Thursday afternoon. He’s a registered guest at the Doubletree Hotel in Tallahassee, where the Leadership Florida conference is being held.
Question -- is this the right time for Stu to be participating in something like this?
Related -- maybe Leadership Florida ought to put Stu in next year's class and allow these allegations to play themselves out?
Nurik came to the deposition with fortifications – an energy drink, a power bar and Fig Newtons – to answer questions from bankruptcy lawyers seeking to reclaim assets for creditors of the defunct Rothstein Rosenfeldt Adler law firm.
Marc Marc Marc!
These are not the weapons of a well-armed lawyer/gladiator.
What are you doing here -- preparing for an important deposition, or packing lunch for a third-grader?
You need life-affirming fortifications for mind and body -- whole grains, nuts, fresh fruit, and of course a small chilled flask of gin.
Also, I've said this before -- what kind of facacta firm was Rothstein running:
Nurik admitted he would regularly ask Rothstein for money to cover personal expenses. He testified he can’t repay the $190,000 in loans he received after he joined the law firm in October 2007. His salary was $350,000 and Rothstein promised a $50,000 loan that year. If he brought business into the firm, the loan would be converted to a bonus, Nurik said.
Nurik said he lived rent free for more than a year in a Castilla Isles home bought by Rothstein for $1.9 million and didn’t pay expenses on the home, but began paying the expenses and $2,500 in monthly rent after Rothstein’s Ponzi scheme imploded in late October.
That month, Nurik said he convinced Rothstein to raise his pay to $500,000 a year and convert the loans into bonuses. He said he has yet to pay income tax on the bonuses and didn’t consider the free rent to be income on which he owed taxes.
Bankruptcy lawyer Chuck Lichtman asserted that the $190,000 was in fact loans, and subject to return to creditors. Nurik said he would be willing to negotiate repayment to creditors to avoid a lawsuit, adding he deserved the bonuses because he brought $1.9 million in business to the firm.
So Nurik brought in to the firm the exact amount that the home he lived in rent-free cost Rothstein to purchase? Weird.
And why borrow so much? What personal expenses did he have that required him to live so far beyond his means?
The $2500 he started paying when his free arrangement become public is well below market value, obviously, plus Nurik apparently claimed homestead on a different house.
As Bob Norman notes, Berger Singerman has put in a fee app for three months of Rothstein work, seeking a fairly sizable chunk of change:
Here's the list:
-- Lead bankruptcy attorney Paul Singerman's firm, Berger Singerman, is asking for a total fee of $1,230,974.50 for those 15 or so weeks of work, plus $28,092.06 in expenses, for a total of more than one and a quarter million dollars.
-- Bankruptcy attorney John Genovese is asking for
$324,805.50 plus $3,659.90 in expenses.
-- Miami accountant Richard A. Pollack is charging $611,640.50 plus $1,846.30 in expenses.
To put those numbers in perspective, consider that, extrapolated over a full year, those three entities would be making more on this one case than the entire 70-member RRA firm made in total revenues last year, about $8 million. A hearing on the fees will be held at 1:30 p.m. April 7 at the federal courthouse.
The app is an interesting read and gives you a feel for the massive and immediate nature of the work involved.
BTW, I don't think there's any question it is well-earned and they will have it approved.
If she didn't know exactly how her husband made his money, and assumed like all the big shmarties in town that Rothstein had legitimate business investments, then maybe she is somewhat of a victim in all this?
The lawyers itemized a litany of questionable expenses:
• $880,609.77 on an American Express card paid for by her husband's Fort Lauderdale law firm. Among the charges: plastic surgery treatments, hotel and spa charges, groceries, handbags and vacations.
• $104,223.99 on campaign contributions to GOP presidential nominee John McCain and the National Republican Senatorial Committee, which were reimbursed by the firm.
• $153,198.71 for ``professional fees'' paid to her by Rothstein Rosenfeldt Adler.
Kimmie says she was in the dark:
Kim downplayed her shopping sprees, arguing they weren't ``frivolous.'' When asked about buying $21,180 in shoes -- including nearly $5,000 on Oct. 23, 2009 online -- she explained: ``I have very small feet, I have to special order.''
She even went shopping -- at Nordstrom's for shoes -- over the Halloween weekend when news surfaced that her husband's law firm had failed amid the collapse of Rothstein's massive investment racket. She denied that she was aware of the media frenzy surrounding her husband.
SHOPPING SPREES
In the deposition, Kim Rothstein comes across as a woman who filled her days with shopping sprees for herself, friends and relatives while being in the dark about her husband's finances and enterprise.
She said she was unaware of much of her husband's spending -- including a $475,000 Weston home for Villegas or the $250,000 in cash stashed at their Fort Lauderdale home.
``I didn't even have knowledge of half those vehicles,'' she told the lawyers after they read her the list of Ferraris and other luxury cars.
Though Kim and Scott socialized with investors, she said she never overheard them discuss the investments.
When asked if she ever overheard such business conversations between her husband and George Levin -- who along with his Banyon investors sank around $775 million into Rothstein's scheme -- Kim described much more mundane conversations between the two men.
``Bagels, lox, the difference between lox and salmon, and cream cheese consistency, like the stupidest things you could think of,'' she said.
Ok, let me stop Kim right there -- there's nothing "stupid" about discussing the difference between lox and salmon.
In fact, if you add a little whitefish to the conversation, these are topics I can (and have) discussed for hours.
The suit concerns Sanchez’s representation of Rivero, who pleaded guilty in 2008 to misusing $700,000 out of $3 million he was paid by the Miami-Dade Housing Agency to build affordable housing for senior citizens. Rivero admitted diverting public money to build himself a dream house in South Miami and was sentenced to more than a year in prison. He was recently released. The primary allegation in the civil suit is that Sanchez and her law firm aided Rivero in a scheme to switch copies of a property deed, one that was witnessed and one that was invalid because it was not witnessed. The in-laws claim Rivero promised the deed in exchange for $1 million, but they received the worthless version. Among the more explosive charges alluded to in the suit are that Sanchez had an affair with Rivero when he was married and he was paying her personal bills, which was “inappropriate to the attorney-client relationship.” Hall represented Rivero’s ex-wife in their divorce.
The law firm and Sanchez “acted professionally in full compliance with their ethical and legal obligations. It is unfortunate that a lawyer with a long-standing impeccable reputation must now litigate what has already been admitted by Mr. Aleman under oath in deposition testimony in the other cases: that Fowler White Burnett and Ms. Sanchez were never involved in the preparation of any improper deed or transaction.”
Oh well, that's what they have courts (arbitrators?) for I guess.
Then we have Big Stu, who according to this pleading had a rather unorthodox compensation plan at RRA:
26. The payments made to Rosenfeldt for salary, bonus or other distributions are collectively referred to below as the “Compensation Payments.” The Trustee challenges the reasonableness of these Compensation Payments for each of these years, based upon various factors related to the operation and profitability of law firms and attorney compensation structure. The amounts challenged as being overpayments of compensation for the 4-year period subject to this lawsuit were unreasonable and improper.
27. The fact that significant amounts of alleged bonus or other payments to Rosenfeldt are not related to actual earned compensation ties to the timing of when Rosenfeldt received certain of such payments, and how he thereafter paid out similar amounts of money as political contributions. For example, and demonstrating it was part of a scheme to funnel cash out of RRA to use for political contributions and not to pay legitimate earned income, on May 19, 2008, Rosenfeldt, Russell Adler (“Adler”) and Steven Lippman (“Lippman”) each received an alleged bonus of $140,000 from RRA. On May 28, 2008 Rosenfeldt made a donation of $140,000 to the John McCain presidential campaign. Also on May 28, 2008, Lippman and his wife Marcy, made payments to the same campaign of $65,000 and $60,000 respectively. On June 12, 2008, Adler contributed $80,000 to the McCain campaign and his wife Katie likewise contributed $39,200. Thereafter, and through the balance of 2008 and much of 2009, Rosenfeldt, Adler and Lippman each received periodic alleged compensation payments from RRA and they (and/or their wives) then made a series of political contributions that trace close to receipt of the monies (which was received both before and after the contributions) with similar, if not identical payments then being made to the same candidates or political parties, including the McCain campaign, the Florida Republican Party, the Ohio Republican Party, the Pennsylvania Republican Party, the Missouri Republican Party, the Michigan Republican Party and Governor Charlie Crist. The bonus or other compensation payments that were used to pay for political contributions provided no consideration to RRA and thus, RRA received less than a reasonably equivalent value in exchange for these payments.
28. The second set of payments the Trustee seeks to recover includes reimbursements for personal expenses that improperly benefited both Rosenfeldt and Suzanne Rosenfeldt. During the years 2006 through 2009, on a monthly basis, Rosenfeldt had unfettered personal use of the RRA American Express card. During this time, for his and his wife’s benefit, Rosenfeldt improperly charged to RRA over $1 million in purely personal expenses, including $439,337.45 just from December 3, 2008 through June 18, 2009. Examples of Rosenfeldt’s personal expenses paid by RRA that personally benefitted Rosenfeldt and Suzanne Rosenfeldt include: 72 pieces of jewelry purchased from J.R. Dunn Jewelers, numerous local hotel room charges, furniture for their home, vacations and personal travel, exotic reptiles, home repairs, athletic club charges, men’s and women’s clothing, groceries, charitable contributions, personal meals, general household items and other items (“Personal Expense Payments”). RRA received less than reasonably equivalent value in exchange for these expense reimbursements.
29. The third set of payments the Trustee seeks to recover includes reimbursements for payments made by RRA to Rosenfeldt which were classified in RRA’s financial records as “loans” and are referred to below as the “Rosenfeldt Loans.” These payments were reflected by numerous checks written by RRA to Rosenfeldt from the RRA operating account, often in random dollar amounts. The loan checks were sometimes issued on the same day with a loan check in numbered sequence to another RRA partner, Steven Lippman (“Lippman”). Typically, Rosenfeldt would deposit each check into his personal bank account, then shortly after the deposit by Rosenfeldt of the RRA check, he would write a check out that personal account payable to RRA in an amount less than the check RRA had given him. The Rosenfeldt Loans totaled $8,960,310.75.
30. In some instances, after Rosenfeldt received a check from RRA, and rather than repaying RRA, he wrote the return check to third parties including: (a) at least one check to Kendall Sports Bar on June 19, 2006 in the amount of $61,500, (b) numerous checks to Russell Adler in amounts of $1000 to $5000 referencing “loan.”
Exotic reptiles?
Oy.
Putting aside questions of knowledge etc, what kind of farcockta law firm operates like this?
There's not enough Xanax in South Florida for me to be able to deal with these kinds of crazy allegations.
On January 21st, Lippman (on behalf of Ace) filed an emergency motion for contempt relating to some discovery that GFM allegedly failed to produce.
Without waiting for a response, Judge Bandstra entered an order on Thursday denying the motion.
It has some interesting language:
Reviewing the pleadings, and the procedural history of this case, the Court finds no basis for a finding of contempt or any further court order with respect to this discovery. The procedural history of this case reveals that the parties have continually failed to comply with discovery obligations imposed by the Court's rules resulting in a series of motions to compel and Court Orders to resolve such disputes. The instant "emergency" is another example of such conduct and results, in large part, from plaintiff's own delay in seeking the subject discovery in a timely manner and then delaying or agreeing to delay the review of these documents until almost two months after the Court Order requiring defendant's production. Plaintiff's motion for contempt explains the problem in obtaining this discovery but offers no explanation for its own lack of diligence in pursuing this discovery. Also, plaintiff fails to file the requisite memorandum of law with its motion citing any authority for an entry of contempt under the circumstances here. This, too, is a violation of the rules of this Court and constitutes a separate reason for the denial of this motion.
Ouch.
Boy, I wonder if anything was happening at RRA while all this was going on?
You know, at least to me, they were much more interesting when they were "tea baggers."
Still, I suppose since it was just filed in the SD FL we should take a look at the complaint, which concerns the soon-to-be-doomed Tea Party movement:
A group of Florida Tea Partiers has filed suit against the team of conservative activists that registered the Tea Party of Florida (TPOF) as an official state party, alleging that their rivals "fully intend to 'hijack' the phrase 'Tea Party' for their political will and objectives."
In the lawsuit, filed moments ago in federal court in Florida, the Tea Partiers seek to push back against a bid by Orlando lawyer Fred O'Neal, and his close ally, GOP political consultant Doug Guetzloe, to claim rights to the Tea Party name.
In doing so, the Florida Tea Partiers become just the latest to sound the alarm about what they see as the increasing co-optation of a grassroots movement by political insiders. "We have a very successful movement, similar to the Civil Rights movement, or women's suffrage. And we have a political entity that's trying to take advantage of that," one of the plaintiffs, Everett Wilkinson, told TPMmuckraker in an interview. "They're trying to take that success and momentum and hijack it for their own political and/or personal needs."
Nothing coming up on PACER, so I don't know the judge assignment yet.
Meanwhile, it turns out only 35 RRA lawyers are being investigated by the Bar:
The Florida Bar is investigating at least 35 former senior lawyers in the now-bankrupt Fort Lauderdale law firm headed by Scott Rothstein, who was disbarred before he was criminally charged last month with using the firm to run a $1.2 billion investment racket.
The Bar confirmed to The Miami Herald Wednesday that it is examining whether those members of the former firm -- Rothstein Rosenfeldt Adler -- lied about the amount of money in client trust accounts and whether they stole any of it.
According to Howard Greitzer, however, the majority of RRA attorneys did nothing illegal:
``There has been no determination of wrongdoing,'' Greitzer said. ``The majority of the lawyers that I am familiar with from RRA were hard-working, competent colleagues who did nothing illegal, inappropriate or unethical.''
I agree with Howard -- in fact, if you can get a simple majority on something like that you've got yourself a pretty good law firm.
"We are in the process of finalizing a plea agreement,'' Marc Nurik, Rothstein's attorney, told The Miami Herald Tuesday. ``I can't comment on any of the details.''
U.S. District Judge James Cohn will set a date for Rothstein, 47, to plead guilty in coming weeks, to be followed by his sentencing a few months later -- capping the biggest investment fraud case in South Florida history.
Rothstein has been cooperating with authorities as they build cases against members of his inner circle and now-defunct Las Olas Boulevard law firm. Typically, defendants who provide information that results in additional prosecutions do so seeking a benefit: the possibility of a reduced sentence down the road.
So which members of the inner circle and his old law firm are next?
Remember how Rogers often played that old clip of Larry King, asking for a loan?
That came to mind as I reviewed the adversary complaint filed by Herb Stettin against Steve Lippman.
I don't know about your law firm, but does this part sound normal to you:
23. The second set of payments the Trustee seeks to recover includes reimbursements for payments made by RRA to Lippman which were classified in RRA’s financial records as “loans” or “other compensation” and are referred to below as the “Lippman Loans.” These payments were reflected by numerous checks written by RRA to Lippman over a 4 year period from the RRA operating account. Typically, Lippman would deposit each check into the bank account he maintained in the name of Lippman Valinsky & Storfer, and which Lippman and Rothstein both referred to as the “Nest Egg Account.” Usually, within a day or two of deposit by Lippman of the RRA check, he would then write a check out of the Nest Egg Account payable to RRA in an amount less than the check RRA had just given him. These loan payment checks were usually deposited into RRA’s operating account, although some were deposited into one or more RRA accounts denominated as a “trust account” or “real estate account.” The Lippman Loans totaled $8,960,310.75.
24. In some instances, after Lippman received a check from RRA, rather than repaying RRA, he wrote the return check drawn on the Nest Egg Account to third parties including: (a) 10 checks to Sterling Bank, totaling $664,953, although all of these checks appear to have been indorsed by an individual and not the payee bank; (b) a check to Kendall Sports Bar in the amount of $89,000; (c) 4 checks payable to Albert Peter, an individual who had a business relationship with Rothstein, totaling $89,723; (c) 4 checks to Banyon LLC totaling $797,000; (d) 2 checks to Rothstein totaling $463,143; and (e) various other checks to himself and Rosenfeldt.
25. The total unpaid amount of Lippman Loans, net of all repayment checks, as of the date hereof is $2,464,907.68. The payments described in the preceding paragraph provided no benefit to RRA and thus, RRA received less than a reasonably equivalent value in exchange for the unpaid Lippman Loans.
Zimet said Lippman's expenses were paid as part of his agreement with the law firm. As for the bonuses, Zimet said, Lippman earned much more money for the law firm than he received in compensation. Zimet also disputed Stettin's characterizing some figures as loans, but declined to be specific.
I also liked this paragraph:
Indeed, while the scheme was ongoing, RRA rapidly grew from a 7 attorney law firm in 2002 to 70 attorneys and 80 support staff in 2009. Prior to 2005, Rothstein was a virtual unknown in legal, political, and charitable circles. Subsequent to 2005, Rothstein and RRA gained the reputation of being a highly visible law firm making direct and indirect significant political and charitable contributions to both gain influence and give the appearance of a successful law firm.
1. This 70-lawyer firm only took in $10 million in 2008 and 2009;
2. Kim Rothstein was employed by RRA at a salary of $45k; and
3. This was some wildly f&(ked up place.
You know how lawyers, particularly litigators, pride themselves on being good judges of character? They just know when a witness is not telling the truth, or being evasive, or when something is "not quite right."
Indeed, their self-worth as a lawyer is sometimes bound up with their inflated view of themselves as being able to "put the pieces together," find a seemingly meaningless clue in a document or a stray aside by a witness, and sleuth their way on a hunch, flop sweat, and good detective work to unraveling the key to winning a case.
Why didn't anyone at RRA do that with Scott Rothstein?
