The wife of convicted Ponzi scheme operator Scott Rothstein pleaded guilty Friday to a federal conspiracy charge, admitting that she and others sought to conceal and sell more than $1 million in jewelry that federal investigators wanted to seize to repay wronged investors.
Kim Rothstein, 38, faces a maximum of five years in prison when she is sentenced April 19 but is likely to get far less under federal guidelines. She pleaded guilty in a short, subdued hearing to conspiracy to commit money laundering, obstruct justice and tamper with a witness.
She and her attorney, David Tucker, declined comment after the plea, ducking into a dark-colored SUV and speeding off.
Two others involved in the hidden-jewelry plot — her friend Stacie Weisman, 49, and her attorney Scott Saidel, 45 — have also pleaded guilty and face similar five-year sentences. Two other men — Eddy Marin, 50 and Patrick Daoud, 54 — accused of playing roles in the scheme are set to go to trial in April.
Scott Rothstein, a now-disbarred lawyer who formerly headed a high-flying firm, is serving a 50-year prison sentence for orchestrating a $1.2 billion Ponzi scheme using fake legal settlements to lure investors with promises of huge profits. In reality, Rothstein was using money from new investors to pay older ones in classic Ponzi scheme fashion.
Once the scam collapsed in late 2009, investigators moved to seize Rothstein's homes, property, fancy cars, boats and many other assets including a treasure trove of jewelry in order to partially repay the investors. Kim Rothstein said in a sworn statement on Nov. 9, 2009, that everything had been turned over.
Some of the jewelry, however, seemed to be missing.
According to court documents, Kim Rothstein and her confederates hid dozens of pieces — a 12-carat yellow diamond ring, gold bars, 10 luxury watches and an 18-diamond wedding band among them — and later attempted to sell them. On top of that, prosecutors say, the group tried to get Scott Rothstein to testify falsely in various civil cases about where the missing jewelry was.
The 12-carat ring became part of the Rothstein firm's bankruptcy case, with a local jewelry stored that originally sold the piece trying to locate it. A cover story was concocted that the ring had been sold to a dead man, according to court documents.
The government is once again seeking forfeiture of the jewelry that Kim Rothstein tried to conceal.
Friday's guilty pleas may not be the end of the criminal case. Prosecutors for months have been investigating Rothstein's former law firm partners and others who possibly played roles in the Ponzi scheme, one of the largest in South Florida history. There have also been dozens of lawsuits brought by former investors against a variety of entities, including banks that did business with Rothstein.
Prosecutors have filed documents indicating they may seek to reduce Rothstein's prison sentence if they are satisfied with his cooperation in these various cases. The same could happen for Kim Rothstein and her group.
