Thursday, 29 January 2015
Last updated 1 hour ago
Jun 25 2012 | 1:32pm ET
Ponzi scheme mastermind Scott Rothstein, who has said Banyon Investments' George Levin knew he was running a fraud, pointed more fingers in his latest deposition.
Rothstein, who was sentenced to 50 years in prison but is now cooperating with prosecutors in hopes of cutting that sentence, said his own law firm's general counsel knew that he was running a scam.
"As [David] Boden gets involved in these things"—Rothstein was selling non-existing lawsuit settlements to investors, including hedge funds—"and realizes there are no plaintiffs and no defendants—if you look at the e-mail traffic you can see that documents are literally being prepared one minute and executed an hour later, where it would be impossible—given the location—the alleged location—of the putative plaintiff and defendant—Boden was our firm's general counsel—there's not one single conflict search that ever goes through."
"We had a detailed conflict search system. There's not one single conflict search that ever goes through on any of these cases. Mr. Boden is right around the corner from my office and he knows he can never see a plaintiff. The e-mail that we discussed earlier where Mr. Boden says in quotes he wants me to 'see' a plaintiff. If he really thought he could see a plaintiff, why put the word 'plaintiff' in quotes."
"There's no files. There's no files in a file room. There's no files on our system. We were a paperless law firm, which means all our files were scanned in. There was nothing scanned in."
Boden denied knowledge of Rothstein's fraud when he was deposed.
"David Boden was the whistleblower who directed the disclosure of the fraud to federal authorities," Boden's lawyer said in a statement. "Scott Rothstein's imaginative and creative testimony about David Boden is clearly in retaliation."
Rothstein, who in an earlier deposition claimed to all but own law enforcement in Broward County, Fla., elaborated on those allegations. He said he used his influence—bought in part, he said, by paying for prostitutes for police offices and sheriff's deputies—to help Southern Grouts and Mortars, the world's largest manufacturer of swimming pool and deck finishes, cover up safety conditions, including the 2001 electrocution of a worker. He also said he helped Southern Grouts CEO Ron Picou avoid a drunk-driving arrest.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…