Monday, November 09, 2009

Reflections on Scott Rothstein, Greed, Courage and Karma

We have an alleged “mini Bernie Madoff” in South Florida and his name is Scott Rothstein. As I write this article, you will see the word “alleged” used a lot because, if I miss it once, Scott Rothstein will probably sue me. Let the record reflect that I intended to use the word “alleged” in front of every bad thing I say about “Scottie”.

First, let’s talk about greed. Guys like Bernie Madoff can scam people so easily because of the greed of the “scamees” [I hesitate to use the word sucker, for fear of being sued]. Most of Bernie’s victims were educated, wealthy, and sophisticated individuals. This raises the question of how such a person could believe that they could continuously earn higher returns on their investments than everybody else and never have a loss year. Add to that that they were refused any information about “how” Bernie was investing their money. Wouldn’t this make you nervous? I can come up with only one emotion that can overcome the common sense that would tell most people that this was a scam and that is pure, unadulterated greed.

The parallels between Bernie’s capers and those allegations against Scottie are many. The investors were educated, wealthy, and sophisticated. Also, Bernie didn’t draw the line at scamming business associates and investors unknown to him. Allegedly, one of Scottie’s biggest scores was from Ted Morse and his family and auto dealerships. Scottie was quoted as saying Ted Morse was his best friend. News reports say Ted was cheated out of $25-$60 million and his own lawyer admitted that it was in the “tens of millions”.

Further parallels are that investors with Scottie were told that they would get a guaranteed 10-15% annual return on their investments…strikingly similar to what Bernie promised his investors. Scottie’s investors were told that no details of the investments could be revealed to them because they were based on confidential settlement agreements. Scottie allegedly told some of his “scamees” that several of the settlements he was asking them to finance were to victims of the infamous Jeffrey Epstein, the Billionaire Palm Beach investor, convicted of paying children for sex. One story that Scottie told was that Epstein flew Bill Clinton down on his private jet to Palm Beach after setting a up a “date’ for Bill with an under aged girl. Of course, Bill wanted to settle this thing confidentially with the young girl who was a client of Scott Rothstein’s. Now, you can’t make this stuff up! Would you believe such an outrageous story?

Now let’s talk about courage. Every day that passes reveals more people who claim they knew Bernie Madoff was a crook all along. If that’s the case, why didn’t they speak up a long time ago? To be fair, there was one man, Alex Dalmady, who did speak out but the SEC ignored him. If Scott Rothstein stole $500 million in such an obvious Ponzi scheme based on such an outrageous premise, why didn’t lots of people speak out? I know local lawyers who, off the record, will say they knew all along that there was no way Scott Rothstein could earn the money to support his decadent life style from the proceeds of his law firms’ legal activities. Why didn’t they speak out before? I can tell you why…they were afraid they would be sued. The operative word here is “afraid”.

Almost every time I write this column, I wave a red flag at somebody [usually a car dealer] who must think about suing me and sometimes do. Abraham Lincoln said, "To sin by silence when they should protest makes cowards of men." He was referring to those who, in their hearts, knew slavery was wrong but were afraid to speak out against the status quo. I could also quote Ray Eberle who wrote “Fools rush in where angels fear to tread”. You can make the call as to whether I’m a brave man or a fool, but I believe in speaking my mind when it comes to those that do wrong.

Finally, let’s talk about Karma. You may never have watched the TV sitcom, “My Name Is Earl”. It’s kind of silly and not everybody’s cup of tea. Of course, I watched it when it first came out because of the name. There aren’t many of “us Earls” around. When I learned that the premise was about a character, Earl Hickey, who changed overnight from being a common crook to an honest person who devoted the rest of his life to redeeming his past sins, I was hooked. After all, that’s the story of my life too. I went from an average car dealer who would do almost anything to sell a car to a consumer advocate for the car buyers of Florida. The word Karma comes into play in “My Name Is Earl” because Earl’s hit by a car and then the wind blows away his million dollar lottery ticket. He interprets this as Karma punishing him for his past sins. He begins a quest to make whole all those he swindled and Karma causes the wind to blow the winning lottery ticket right back to him! You can watch reruns on Fox Channel 29, WFLX, week nights at 7 PM.

Here’s what Karma [or whatever you want to call it] has done for me. As of last month, my Toyota dealership in Lake Park, FL [population 9000] has sold more cars in this year than any other car dealer in Florida except two. We are the 4th largest volume Toyota dealer in the Southeast USA and the 34th largest in the USA. I alluded earlier to my being sued because of what I wrote in this column [which I also blog]. Guess who sued me! It was Ted Morse and his lawyers from Scott Rothstein’s law firm. Not only did Scottie’s law firm sue me on behalf of Ted Morse but they also sued me themselves. They alleged that I had defamed them as well as Ted. Of course, Rothstein’s law firm was dissolved because the FBI is investigating the owner for a $500 million Ponzi scheme and he took all of the law firms money to boot. There isn’t enough money to pay the law firm’s employees or the law firm’s clients and escrow monies. I’m waiting to see if they can scrape together enough money to continue their suit against me and defend my suit my suit against them. Stay tuned for further developments.

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