Wife of Fort Lauderdale Ponzi schemer Rothstein gets 18 months in prison

Nov. 12--To the public, Kimberly Rothstein looked like Ponzi schemer Scott Rothstein's trophy wife. In 2008, they celebrated their wedding reception at the Versace Mansion on South Beach, attended by then-Gov. Charlie Crist.

But in private, "Kim" Rothstein says she was just another one of her husband's victims.

On Tuesday, she was sentenced to one and a half years in prison by U.S. District Judge Robin Rosenbaum in Fort Lauderdale for plotting to fence more than $1 million worth of jewelry, including a 12.08-carat yellow diamond ring, from her husband's investment scam. She was ordered to surrender later in the day to U.S. Marshals at the Federal Detention Center in downtown Miami.

In court papers, Rothstein, 39, who only recently filed for divorce, tried to portray herself as a woman who was verbally and physically abused by her husband -- in the hope of gaining leniency from the federal judge.

The wife also said for the first time that her husband instructed her to hide the jewelry from the Feds as agents seized his Fort Lauderdale homes, luxury cars and other ill-gotten assets four years ago -- a revelation that won't serve the convicted con man well if he hopes one day to reduce his 50-year prison sentence for racketeering.

"Kim is fully responsible for her behavior," her defense attorney, David Tucker, wrote in court papers. "However, it was her husband, Scott Rothstein, who originally requested that she take some family heirlooms, watches and other items of value as insurance.

"He knew the avalanche of litigation that would be taking place over the next few years. Scott also recommended that Kim turn these items over to someone whom she trusted to sell them," Tucker continued. "Kim took a large number of very expensive items to sell. Through the use of coded letters, Scott followed the progress of not only the sale of the items, but also Kim's attempts to seek their return.

"Scott and Kim discussed getting the jewelry back so that it could be returned to the United States Government, thereby allowing Kim to 'come clean.' ''

But that never happened -- despite Scott Rothstein's decision to return from Morocco, where he had fled after his $1.2 billion investment scam collapsed over a Halloween weekend in 2009.

That November, when Internal Revenue Service agents showed up at Scott Rothstein's waterfront Fort Lauderdale mansion, his wife helped them retrieve what she claimed was all the cash, jewelry and watches that the one-time attorney had obtained with the millions stolen through his Ponzi scheme.

And Kim Rothstein, testifying the following February in the bankruptcy case of her husband's defunct law firm, repeated that she had turned over all of the couple's jewelry to authorities.

But as it turned out, Rothstein's wife was hiding more than a bauble or two.

According to court records and sources familiar with the case, Kim Rothstein had already started to hide some of the couple's jewelry from her husband as their marriage deteriorated along with his investment scheme -- though she has always asserted that she learned of his crime after he returned from Morocco in November 2009.

Among the pieces she kept before IRS searched her husband's Fort Lauderdale home: the 12.08-carat yellow diamond ring, which Rothstein had bought for her from J.R. Dunn Jewelers in Fort Lauderdale.

But after he returned from Morocco that November, Scott Rothstein advised her to keep the jewels, watches and coins he had purchased with his Ponzi millions, according to court papers filed by Kim Rothstein's defense attorney, Tucker.

Last year, Kim Rothstein was charged along with her civil lawyer, Scott F. Saidel, 46, and her friend, Stacie Weisman, 50, with conspiring to hide and sell more than $1 million worth of jewelry, watches and coins before IRS agents seized Scott Rothstein's assets.

Kim Rothstein and Weisman, who offered to hold some of the jewelry for her, were accused of selling the pieces through a local jeweler.

The three defendants, who all pleaded guilty, were charged with money-laundering conspiracy, obstruction of justice and tampering with a witness: Scott Rothstein. He had already been helping authorities investigate his complex investment scheme, but apparently kept secret the valuable diamond ring and other pieces he had bought for his wife and himself.

In court papers, Kim Rothstein's attorney portrayed his client as the "tomboy" daughter of divorced parents, who excelled in martial arts competitions while growing up in Davie. Although her youthful pursuits were cut short by a brain ailment, she completed South Plantation High School, attended Broward Community College and eventually obtained her real estate license.

While working as a bartender in an upscale Fort Lauderdale restaurant, Blue Martini, she met her "prince charming," Scott Rothstein, or so she thought.

"In one moment, the life she clung to, the fantasy she lived, dissolved," Tucker wrote in court papers. "Within weeks, all of the accounts and Kim's credit cards were frozen."

Tucker said his client has cooperated with federal prosecutors, who asked the judge for a reduction in her sentence, which carried up to five years in prison.

Weisman's attorney, Alvin Entin, said his client came to know Kim Rothstein through Fort Lauderdale charity circles and wanted only to help a friend in need. Weisman has also cooperated with prosecutors, who asked the judge to give her a sentence reduction, too.

Saidel, a Boca Raton lawyer, was sentenced in October to three years in prison for helping Kim Rothstein hide proceeds from the sale of her jewelry. The now-disbarred Boca Raton lawyer was ordered to surrender next week.

Kim Rothstein and Weisman sold some of the jewelry to Eddy Marin and Patrick Daoud. The latter is a longtime jeweler in Fort Lauderdale, who bought the valuable yellow diamond from Weisman for $175,000.

Marin, 51, and Daoud, 55, who were indicted on separate charges, pleaded guilty before their trial in October.

According to court records, Weisman showed the ring to Marin, and he took a picture of it so he could try to sell it. In April 2010, Weisman gave the ring to Daoud to have it graded by the Gemological Institute of America, and sold it to him, according to court records. Weisman gave the proceeds to Kimberly Rothstein and Saidel.

But the plot thickened when Marin and Daoud gave depositions in the Rothstein law firm's bankruptcy case.

Marin "falsely testified" that a dead person named Robert Fuchs had shown him the ring, according to records. Daoud also "falsely testified" that someone other than Weisman had shown him the ring and that he never possessed it. In fact, Daoud gave the ring back to Weisman after his testimony, the charges state.

To get their story straight, prosecutors said, Kimberly Rothstein, Weisman and Saidel concocted a plan to persuade Scott Rothstein to testify in the bankruptcy case that he had sold the ring to Robert Fuchs before he was incarcerated. Weisman and Saidel told Kimberly Rothstein to meet with her husband, who has been held in an undisclosed federal prison, to advise him to deliver "false facts" in the bankruptcy case.

Rothstein, looking to curry favor with prosecutors to reduce his 50-year sentence, told them about the cover-up plot, according to sources familiar with the case.

But it remains to be seen whether Rothstein will ever receive a sentence reduction, after pleading guilty in early 2010 to racketeering and other fraud charges involving the sale of purported legal settlements to investors from Florida to New York. As part of his punishment in the criminal case, Rothstein was ordered to pay about $370 million in restitution to his investors.

About 15 other defendants, including employees of his former law firm, have been convicted on charges stemming from his investment scheme, among the largest financial frauds in Florida history.

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