Memorandum to file. Date: June 24th, 2013. Subject: Scott Rotisserie’s Opinion scheme. The purpose of this memo is to document my research on Scott Rotisserie’s Opinion scheme, the biggest fraud case in Florida. Did Scott Rottenest knowingly lie and take money from investors, promising high fake returns, only to benefit himself and his conspirators? How he got away with this scheme without being caught is outlined. I have also included some of the red flags that were missed. Facts Rottenest and Stuart Resented opened a law firm in 2002 called Rottenest Resented Adler.
Rottenest was a people person and was able to engage easily with al types of people. His friendship and ability to get along with people high in rank, like Governor Crisis, made him even more believable to the public. He went out of his way to please people. He even hosted John McCain in his house. “He was the life of the party and wanted people to love him. ” (American Greed, 2009). With his good reputation, it was easy for him to lure more people into the scheme as he had earned a lot of trust from people. His wealth “bought” him power and esteem. Rottenest stole a total of 1. Billion. (Unites States v. Rottenest, 2009). The Opinion scheme was carried out over a period of four years from 2005 to 2009. Discussion Methodology and steps used by Rottenest. Scott was able to sweet talk investors into loaning money to his firm’s “clients”. Rottenest was able to pull off the scheme because he did not work alone as there were other people involved. Together, they sold confidential agreements at a discounted rate and promised face value returns to investors. The investor’s money was “used to prepay the clients” who had “pending settlements”.
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The so called fake clients had “agreed” to a lesser amount upfront since they needed the money urgently. In return, they had to give up their settlements to the firm. According to Rottenest, with the full payment to the firm, he would be able to then give the investors a high return within a short period of time. “The investors were guaranteed a minimum of 20 percent investment returns in as little as three months. ” (Wisped, n. D) Rottenest claimed he had opened trust accounts for the investors where the funds were maintained and checked on regularly by designated people.
None of the two partners were signatories on the ERA Trust accounts. He opened accounts in different financial institutions and would transfer money back and forth between the accounts. The amount transferred was an estimated 500 million USED. Brinkman, 2009). He altered bank statements and online information to make it look like money was still in the accounts. He took money from client’s escrow accounts when he started running out of money to sustain the scheme. Scott was able to convince investors easily because he was able to create and forge documents, fake Judges’ signatures and make the documents look real.
When investors inquired on the case settlements, he told them that the clients had won the case but the defendant had convinced them he was trying to get the money but they needed to post bonds in order to get the defendants’ money. Investors ended up giving more money. He faked another court order that “allowed” the delay of the return of the funds to the firm. This would in turn delay the return to the investors. Meanwhile, he and his conspirators were taking the money out of the account to maintain the firm’s expenses and their personal extravagant lifestyle.
Signs/clues: How the partners and public missed the following signs is a mystery. Rottenest spent money carelessly, buying extravagant items and giving money to charities and political campaigns. His extravagant lifestyle was clearly not maintained by his mere $200,000 salary. (Peugeot, 2010). “In a 2008 interview at his law firm, Rottenest scribed himself and told how he controlled all aspects of the firm’s management. ” (Wisped, n. D). Rottenest worked in a totally controlled environment. He was the only one who controlled the surveillance cameras and microphones in the building.
This should have been a big red flag as it shows control to cover up the fraudulent acts. According to one interviewee who knew him, Rottenest did not know anything about business or investments to earn any confidence from investors. This should have been a red flag. Rottenest sent an email to the lawyers inquiring about criminal extradition to USA or Israel. He also hired former Broad Sheriff Ken Jennet, right after he was released from Jail. This should also have triggered some questions or suspicions. It is surprising that the investors did not become suspicious when they were not allowed to meet the clients.
When investors were given documentation with all the important information hidden, with the claim the information had to be confidential, they should have questioned Just like Swastika did. Another suspicious act to deflect the true source of the ill-gotten funds was when employees were asked to contribute part of their bonuses to political campaigns. This should have been suspicious . Gifts and lavish items given to employees to gain loyalty and give the appearance of a successful firm should have been another sign.
The increase in salary for Debra Villages within a short period didn’t really match up to her duties. Rotisserie’s parents dressed very strangely in expensive and ridiculous stylish clothes for people their age. It was apparent they did not care how they spent the money. “l mean, here’s a 75-year-old man in baggy Jeans and an eighty-dollar t-shirt. ” (Crandall, 2013) Money was paid to high ranking officials in the police department to deflect scrutiny from the unlawful acts. Police guarded Rotisserie’s house round the clock.
This should have somewhat given it away since no one in Florida, especially with such a low salary, had round the clock police protection. The relationship with Bill Rock should have been suspicious because only Bill had access to the checks written for Rotisserie’s ventures. (Wisped, n. D). Banks were also not paying attention, given the large amount of money that was transferred to and from the trust accounts. Partners should have noticed the money missing from the client’s escrow accounts. Resented should have become suspicious when Rottenest didn’t allow him to look at he company books.
Downfall: clear to Rottenest there was not enough funds to pay the investors, who had become persistent on getting their money back. According to America Greed documentary, he would have needed about million USED each month to keep up with the scheme. Alan Swastika blew the whistle and reported his suspicion to the FBI. (Grimm, n. D). His scheme completely fell apart right after his suicidal text to his partners, when he fled to Morocco. When he returned to Florida, his firm filed a suit against him and the investigation of the whole case got intense. This eventually led to his arrest and hares.
Conclusion Legal dictionary defines fraud as, “A false representation of a matter of factвЂ?whether by words , conduct, false or misleading allegations, concealment of what should have been disclosedвЂ?that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury. ” Using this definition, Rottenest committed fraud. He knowingly deceived investors and took their money. Even though Scott Rottenest was involved in the largest Opini