Scott Rothstein might not be a name you hear much these days. In the early 2000s, Rothstein was known for his luxurious life and law firm Rothstein Rosenfeldt Adler. If you saw him on the street, Rothstein was constantly rolling in some luxury car like a Rolls-Royce Phantom, a Bugatti Veyron, or Bentley convertible. But just as quickly as Rothstein scammed his way to the top, his life and career plummeted. Take a look at some of the luxury vehicles that went up for sale to pay his victims back.
The feds took his Ferrari 320 Spyder, Bugatti Veyron, Rolls-Royce Phantom, and everything else
Long story short, the Federal Bureau of Investigation (FBI) caught on to Rothstein’s scheme. According to an old Wall Street Journal article, Rothstein eventually pleaded guilty to five counts of fraud. At one point, the successful lawyer decided running a Ponzi scheme was far more lucrative than law.
It always comes down to the green. Rothstein didn’t hide his wealth. In fact, he flaunted it. With bright red Ferraris, a cream 2009 Bentley Continental GTC, a bright blue 2008 Bugatti Veyron, a speed boat, and anything else he could get his hands on. That includes a bunch of handmade Italian furniture and even a gold toilet.
But after all was said and done, the goods went up for grab. The Broward County Convention Center opened its doors, and people poured in from all over. More than 1,000 people showed up, and the auction house sold the supercars that same day.
The auction was a smashing success with all items sold
According to the Wall Street Journal article, the available cars were as follows. A Lamborghini Murcielago, a 2010 Lamborghini LP-670SV, a Bugatti Veyron, and two red Ferraris, including a 2009 Ferrari 320 Spyder. A ’67 Corvette Stingray, a Bentley, a 2007 Rolls-Royce Phantom, a Mercedes-McLaren SLR, and a 2009 Maserati GT went up for sale. Rothstein’s prized 87-foot Warren yacht, named Princess Kimberly, was also for sale. Nearby, FBI and IRS agents kept a close watch.
After only an hour, all 11 cars were sold, plus two yachts and two Yamaha WaveRunners sold for a total of $5.8 million. Merely a dent in the total $1.4 billion Ponzi scheme, but it was something. The yacht sold for $2.51 million, and the Yamaha WaveRunners brought in $9,000.
The 2008 Bugatti Veyron was around $1 million when Rothstein purchased it. It sold for $858,000. The 2010 Lamborghini Murcielago LP 670SV had only 100 miles on it and was purchased for $457,000. It sold for $382,000. The SLR was $362,339 and brought in $301,000—such reasonable deals.
The fraudster was defrauded by the feds
The auction of supercars, boats and other items raised some money to go back to the victims. According to an article by the Miami Herald, Rothstein fled to Morocco to avoid the feds. Eventually, Rothstein returned under the guise that he would not be subject to such a long sentence. The federal agents reneged on that agreement when the fraudster lied about some of his stolen money. He was sentenced to 50 years in prison. The Florida Bar Executive Committee and the Florida Supreme Court permanently disbarred him.
“No facts that Rothstein can allege regarding his actual level of cooperation would disturb the government’s unilateral conclusion that his help was insufficient to warrant a substantial-assistance motion.”11th Circuit Court of Appeals in Atlanta
In the initial plea agreement, Rothstein agreed to help take down his cohorts. This led to convictions of almost 30 defendants, including his own wife, Princess Kimberly. But in the end, his 50-year sentence stands. There isn’t much remaining of his ill-gotten fortune. The Bugatti Veyron and Lamborghini Murcielago went home with a new family long ago.
What lesson did Rothstein learn through this process? Probably none. But the rest of us can take away the idea that running a $1.2 billion Ponzi scheme, even if you do get to purchase a Bugatti Veyron.