Judge speeds transcript release in Fla. Ponzi case

AP News
Posted: Dec 13, 2011 5:35 PM
Judge speeds transcript release in Fla. Ponzi case

A federal judge decided Tuesday to speed up the public release of transcripts of sworn testimony being given by convicted Ponzi schemer Scott Rothstein about the scope of his $1.2 billion fraud and those involved.

U.S. Bankruptcy Judge Raymond Ray ruled the transcripts could be released to the media eight days after they are completed throughout the two-week deposition, which ends Dec. 23. That means the first transcript from Monday's testimony will be ready early next week.

Previously it would have been late December or January before any of Rothstein's testimony, taking place behind closed doors in a Miami courtroom with reporters barred, would have become public.

Attorneys for a law firm representing about 25 major investors in Rothstein's scheme and two news outlets said the disbarred lawyer's testimony is of paramount public interest, particularly since it involved investments in phony legal settlements.

Rothstein, 49, is serving a 50-year prison sentence after pleading guilty to orchestrating the scam, which imploded in the fall of 2009. Seven other people have been charged and more indictments are expected; the fraud also caused the demise of the Rothstein Rosenfeldt Adler law firm. Ray is presiding over the firm's bankruptcy case.

Lawyers attending the deposition say Rothstein is giving previously undisclosed details about the scope of the fraud and naming names of others involved. He has been cooperating with federal prosecutors, who have likely already heard most of his testimony, in hopes of reducing his prison term.

"The legal system was abused," said Jim Silver, whose firm Conrad Scherer requested speedier media access to the transcripts. "We have a case not only of high public interest, but extraordinary public interest."

Added news media lawyer Sandy Bohrer: "The public has a right to hear it in a timely manner."

Ray noted that if Rothstein is caught in a lie in the deposition, he could be charged with perjury and wind up with even more time behind bars.

"I assume he is going to tell the truth," the judge said.

One of those named was an employee at a TD Bank branch where Rothstein had accounts. A TD Bank attorney, Ari Newman, said Tuesday that the bank opposed early release of the transcripts, noting that the more gradual release plan had been extensively negotiated.

Another lawyer representing Rothstein investor victims, Jay Sakalo, said quick release could jeopardize confidentiality agreements concerning some documents and evidence.

"Once the toothpaste is out of the tube, you can't put it back in," Sakalo said.

But Ray said the eight-day delay provided ample time for Rothstein to review his own testimony, which is common legal practice, and that confidentiality deals would eventually surface anyway once they came up in Rothstein's testimony.


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