Saturday, November 7, 2009

Rothstein: The End of the Beginning

It has been one week since the Scott Rothstein fiasco became public. The dust has settled only in that the daily revelations have slowed to a point where the people most affected by this travesty have finally digested the story and stopped making it the centerpiece of their interactions with their colleagues. But the case now moves from shock and awe to a serious analysis of what happened and why and, more important, who is to be held liable for it, criminally and civilly. Here are the areas to keep a close eye on:
1. Scott Rothstein. He will plead guilty and go to prison for a long time. The only question is whom is he taking down with him. Everyone assumes he is ratting out his friends. Don't bet on it. At least not yet. Before he even begins to be seriously debriefed, the FBI and US Attorney need to accumulate evidence against him. The fact that he wants to cooperate and has thrown himself into protective custody means nothing. Remember, the feds were tipped off only ten days ago. This case is the reverse of most investigations: the grunt work is completed before people start to flip; here you have a big target who comes to the government before they have any solid evidence that he has done anything wrong. They must first examine the evidence, talk to witnesses and victims, determine who is a target and who is a witness and the total amount of money stolen, and then once they have a handle on the scope of the fraud, get a proffer from Rothstein as to what he can offer the government that they do not already have. This process takes a long time. It will take the government a month to put their theory of the case together. During that time, Rothstein will spend his days and nights holed up somewhere drafting a proffer of what evidence he can give to the government that can implicate other people. Once he does, the government will take another month to verify the accuracy of what he is saying and if it is worth anything even if it is true. Then Rothstein will negotiate a plea, which will take a week. He will then go to court, plead guilty, and be sentenced. I may be wrong, but I doubt very much that the government will allow him to plead to anything unless they are certain they know exactly what he did. Otherwise, they run the terrible risk and huge embarrassment of cutting a deal with him now only to find out three months from now that he committed more crimes than he initially let on.
2. Charlie Crist. His political career is doomed. The pictures in Rothstein's office are devastating. While politicians always take photos with anyone who will pose and take money from just about anyone who will write a check, Crist took it a step further and made his friendship with Rothstein a very public fact. He faces a serious primary challenge from Marco Rubio and the moderates who would otherwise support him will not. Assuming he beats Rubio (I do not think he will), he must run in the general election. Any opponent will run those photos of him blowing out the birthday cake with Rothstein until the public can't tell the difference between them.
3. Broward Politicians. A wash. I hate to say it but the bar here is so low that it will take something much bigger than accepting tainted money and kissing a crook's ass to upset the public. Local races are almost immune to charges of cronyism. Let's face it. Broward County's political culture is so incestuous that Rothstein is just water off a duck's back.
4. The victims. Unlike Madoff's victims, they will get no sympathy. And deserve even less. Give Rothstein credit for not looting the pensions of widows and retirees. At this point, it appears he snagged the rich and famous who can afford to lose the money they did. And they were stupid to believe his pitch.
Well, that's it for tonight. Tomorrow, I will tackle a much more difficult topic. Stuart Rosenfeldt and the other attorneys who worked at the firm. I believe they all face serious civil liability and some possibly criminal liability as well as bar grievances. Stay tuned.

No comments:

Post a Comment