Ponzi schemes are investment fraud schemes that generally show up on the news. These fraudulent investments attract an abundance of media attention because they generally involve very wealthy people or people commonly known to the general public. In this case, Scott Rothstein and his uncle were co-conspirators in a $1 billion Ponzi scheme that is now coming to a close.
What is a Ponzi Scheme?
The definition of a Ponzi scheme according to the U.S. Securities and Exchange Commission is an investment fraud that involves the payment of falsified returns to existing investors from funds contributed by new investors. Ponzi schemers find investors by promising exceptionally high returns with little or no risk. They use money from new investors to pay the previous ones, without engaging in any legitimate investment activity, according to the SEC.
Ponzi schemes need a consistent flow of cash from new investors to continue. Once a schemer runs into difficulty recruiting new investors, the scheme tends to collapse. In other cases, a large number of investors ask to cash out and the schemer is caught.
Ponzi Scheme in South Florida
According to an article in the Palm Beach Post Scott Rothstein’s uncle, Billy Boockvor, the alleged co-conspirator closest to the convicted $1 billion Ponzi schemer, is expected to plead guilty to fraud in federal court Wednesday. Boockvor was at the disgraced Fort Lauderdale lawyer’s side during his wild four-year ride fleecing investors, he is facing up to five years in prison.
In December, he was charged with conspiring with Rothstein to falsify his law firm’s trust account records at Toronto Dominion Bank. The goal: to induce investors to buy bogus legal settlements. They collectively lost more than $350 million. The charge against Rothstein’s closest assistant brings the total number of employees and others prosecuted in the massive scheme to eight, including Rothstein, 49. He is serving a 50-year sentence on racketeering conspiracy charges, according to the Palm Beach Post.
Ponzi and RICO Defense
If you have ever been accused of fraud, or any of the crimes under RICO law (bribery, murder, drug trafficking, embezzlement, etc.), you need the assistance and expertise of a criminal defense lawyer immediately. If convicted, not only will you be forced to pay heavy fines but you will be facing years, if not decades in prison. A criminal defense lawyer can help you through this process.