Republican Party of Florida agrees to return $75,000 in Scott Rothstein contributions
By Peter Franceschina
The Republican Party of Florida has agreed to cough up $75,000 in contributions from Ponzi schemer Scott Rothstein, to settle a clawback lawsuit filed by bankruptcy attorneys.
Rothstein, who ran a $1.4 billion investment fraud scheme from 2005 until the fall of 2009 and rained dollars down on politicos, gave roughly $237,000 to the state party through multiple contributions.
After Rothstein’s fraud came to light, the Republican party returned $90,000 to the federal government, which went into a restitution fund for the fraudster’s victims.
The attorneys marshaling assets for Rothstein’s bankrupt law firm Rothstein Rosenfeldt Adler filed a clawback suit against the Republican party in November in an effort to reclaim the contributions. The state party answered the suit by denying it had any responsibility to return the contributions.
But the bankruptcy attorneys and party officials began negotiating behind the scenes, and on Dec. 12 the party’s board of directors voted to approve the $75,000 settlement, according to the proposed agreement filed late Tuesday in U.S. Bankruptcy Court in Fort Lauderdale.
Both sides said the settlement will save legal costs and avoid a protracted court battle. The agreement still must be approved by the judge overseeing the bankruptcy case.
It also looks like the bankruptcy attorneys will be bringing another chunk of change into the estate – they have reached a proposed $700,000 settlement with a New York company, Utica Advisors, that invested late in the Ponzi scheme.
Utica Advisors invested $1.8 million with Rothstein in July 2009 and was to be repaid $2.6 million over three months, but received only $2.3 million before the fraud’s collapse, according to court documents. The $700,000 settlement also must be approved by the judge.
Rothstein, 48, is serving a 50-year prison sentence after pleading guilty to committing the massive fraud.