Suit alleges massive fraud by Scott Rothstein, TD Bank and others

Rothstein moved $235 million in and out of the TD branch in October alone…“He was a prolific spender, but I don't think he spent $230 million in October. I think he hid it.”//

Miami Herald
November 11, 2009

Suit alleges massive fraud by Scott Rothstein, TD Bank and others
Amy Sherman and Jay Weaver

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A group of investors who claim they lost more than $100 million in Scott Rothstein's massive investment scam on Friday sued the Fort Lauderdale lawyer, a handful of his law firm's employees and Toronto Dominion Bank in a lawsuit that reads like a racketeering indictment.

The suit alleges that Rothstein conspired with an inner circle at his Las Olas Boulevard firm and with TD Bank employees to dupe investors into believing their investments were lucrative and their trust accounts safe.

The suit accuses Rothstein, 47, and others of fabricating confidential legal settlements to sell to investors, whose money was used to pay off other investors in a “classic Ponzi scheme.” But the 147-page complaint, filed by Fort Lauderdale attorney William Scherer, says that Rothstein and those close to him “did not act alone.”

It claims that Toronto Dominion Bank and a trio of officers, including Fort Lauderdale branch vice president Frank Spinosa, served as a “critical linchpin legitimizing” the Rothstein-led “plot” to fleece investors.

“Investors were duped by TD Bank employees conspiring with the principal conspirators to manipulate TD Bank's trust account statements and conniving investors with the false sense of security predicated on written assurances that settlement funds existed and would only be released directly to them,” the suit says.

The bank and Spinosa, who is on leave from his job, denied wrongdoing.

“Through the legal process, the facts will prove that the bank did not conspire with Mr. Rothstein and/or his firm,” said Toronto Dominion spokeswoman Rebecca Acevedo. “TD Bank will defend against all such unfounded claims.”

But Scherer said the bank disregarded numerous “red flags” — including Rothstein's moving hundreds of millions of dollars through his law firm's trust accounts at the TD branch in Fort Lauderdale.

Scherer, talking with reporters at a mid-day news conference in front of the Broward County Courthouse, said that Rothstein moved $235 million in and out of the TD branch in October alone.

He also said Rothstein took $16 million to Morocco in late October, when he appeared to be fleeing the country. Rothstein returned in early November to face federal investigators, though he has not been charged by the U.S. attorney's office.

When asked about Rothstein's comments to the media that he plans to make victims whole, Scherer said: “I think he is trying to work off a life sentence. I think it's a big show.”

But Scherer said he believes Rothstein hid much of the money that he moved out of the TD Bank last month.

“I think we will be able to find it,” Scherer said. “He was a prolific spender, but I don't think he spent $230 million in October. I think he hid it.”

http://www.miamiherald.com/2009/11/20/v-fullstory/1344140/suit-alleges-massive-fraud-by.html


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