The Ultimate Ponzi
The Scott Rothstein Story
By Chuck Malkus.
Illustrated. 250 pp. Pelican Publishing Company. $26.00.
Today Hackard Law interviews public relations executive and communications expert Chuck Malkus, author or The Ultimate Ponzi, a chronicle of master schemer Scott Rothstein’s grandiose $1.4 billion fraud.
Mr. Malkus, you are a veteran PR consultant in Fort Lauderdale, and you were familiar with Scott Rothstein at the height of his Ponzi scheme. What factors motivated you to write a book on his life and crimes?
My office was three blocks down from him on Las Olas Boulevard, and every time I went to a charity event it seemed like Rothstein was also there. I was introduced to Scott Rothstein a couple of times and witnessed him being very out and front every time I saw him, which was often.
I knew there was no way that a traditional law firm could support the charitable contributions, along with the sponsorships of the Miami Heat; the Miami Dolphins and the Florida Panthers hockey arena. His law firm was spending more on these expenses than the top 3 law firms in South Florida. It didn’t make sense.
My number one motivation in writing this book was to share ‘lessons learned’ so that no other community feels the devastation left in Rothstein’s wake. I felt it was important to point out how an overnight philanthropist had arrived and hurt the charities he supported. He was more than a white collar criminal; he was a tornado with no heart or morals, charging through legal, political and charitable circles.
How would you sum up Rothstein’s personality and ultimate goals? Your work makes it clear he’s a manipulative sociopath, but you cover many other angles of his life, as well.
Scott Rothstein wanted to be a major power broker while living a rock star lifestyle. He became a political powerhouse, hosting fund raisers for Sen. John McCain; Gov. Arnold Schwarzenegger and Gov. Charlie Crist, among others. For some reason, Rothstein also felt the need to have several girlfriends in addition to his trophy wife Kim, who has now pled guilty as well. Two of his long time girlfriends share their experiences in The Ultimate Ponzi book. He was a charmer, and due to the amount of his womanizing, his law firm and Ponzi both failed.
What was the atmosphere like around Rothstein (and in Fort Lauderdale in general) during his scam?
South Florida is a melting pot with people who arrive to this region from around the country, and around the world. Fort Lauderdale is a growing and thriving city which welcomes newcomers with open arms. In the early 2000’s Fort Lauderdale was gaining the reputation of a major international tourism destination. Five-star hotels were opening on the beach by 2005 and new restaurants were opening on Las Olas Blvd. Scott Rothstein was able to blend in while spending a lot of money, dressed in $7,000-suits and in many cases, being the life of the party. An unusual character, to say the least, however, South Florida has had its share of characters in the past. He didn’t seem right, but by all accounts, he wasn’t breaking the law – at least not in the public eye.
Rothstein was an extravagant philanthropist and had no problem giving away other people’s money. Can you share some of your own observations on this?
My radar first activated in early 2008, when Scott Rothstein was a major sponsor of the Governor’s Ball at the Dolphins Stadium. His law firm was a sponsor. He paraded around like a peacock, looking alarmingly out-of-place in his Mafioso-like suit. There was a buzz in the air. Where did this guy come from?
Another event which Rothstein’s law firm sponsored was “The Philanthropist of the Year” luncheon attended by 700 at the Signature Grand. When the emcee went to the podium, and then announced, “This year’s Philanthropist of the Year is – Scott Rothstein;” I almost fell out of my chair.
Something about this entire picture just wasn’t right.
Kim Rothstein has recently pleaded guilty to misprision of assets from her husband’s fraudulent scheme. But in The Ultimate Ponzi, you show she is more complex than just a greedy trophy wife. What is your overall assessment of Kim?
There is no doubt that Kim Rothstein had street smarts and was a savvy gold-digger of a person. From her stint as a bartender at Blue Martini, to attending charity dinners, she was cunning to say the least. She had a fake smile; obvious plastic surgery and didn’t seem to have the ability to carry on a lengthy conversation.
You write about Rothstein’s harem, a number of women that he was essentially able to buy for sex. What role did the affairs and sordid parties play in the scheme?
Scott Rothstein admitted in a June, 2012 deposition that he spent over $50,000 a month on paid escorts. The owner of his escort agency told me that Rothstein not only was legal counsel to the company, but he was also one of the biggest customers.
The night before his marriage to Kim, there were 10 women from the escort agency who entertained Scott and his dinner guests.
It has been said that Scott’s close circle of friends, and investors, all participated with the escorts. It’s been estimated he paid for 75-100 women a month.
The Ultimate Ponzi talks about the involvement of organized criminal networks in Rothstein’s scam. You specifically mentioned the Sicilian La Cosa Nostra and Israeli mobsters. Can you speculate on how these shady entities might have fit into the picture?
Rothstein was a greedy man and felt he was smarter than everyone else, including mafia organizations. He probably felt that having friends in the mafia made him even more powerful than the elected officials he hosted fundraisers for at his mansion.
The scheme was directly or indirectly tied to two suicides (a female law student/intern and a former bodyguard) and a murder (a female attorney at RRA). To what degree was Rothstein culpable in these deaths?
The first murder suspect, Tony Villegas, has not yet gone to trial and is the ex-husband of the law firms’ Chief Operating Officer, Debra Villegas. There are rumors that perhaps Rothstein could have been involved in one way or another to incite Tony Villegas, or take advantage of Tony Villegas’ mental state. Until the trial date arrives, we should wait to hear more.
The two suicides happened after the crash of the law firm and both were tragic deaths. Very sad, and even more sad when you consider there were a total of 150 employees, and that three are now dead.
Since your work permits a strategic view on local business and power trends, what factors do you think make communities in South Florida particularly vulnerable to Ponzi schemes?
I sincerely hope that by now South Florida has learned from a few of these shady individuals. In the past, people have arrived in this region and not had to answer questions. Now, people are asking the right questions, doing Google searches and certainly being a lot more cautious. This is one of the reasons for writing The Ultimate Ponzi.
Chuck Malkus, a nationally recognized public relations executive and crisis communications expert, is president of Malkus Communications Group located on Las Olas Boulevard.
He provides strategies primarily in the areas of legal, finance, healthcare and tourism. Chuck was responsible for bringing the Havana Night Broadway Show to the U.S. after its company was held back by Fidel Castro, helped Comcast with its acquisition of South Florida cable franchises and assisted with national automotive dealerships in crisis situations.
During the past 27 years, Malkus has served as a board of director for 11 South Florida organizations. As Founding Co-Chairman of Neighbors 4 Neighbors, a partnership with WFOR CBS, Chuck has helped raised millions of dollars for projects including Haiti Relief; Hurricane Katrina Relief for the Gulf Coast and Hurricane Andrew relief.
A community advocate, Malkus was inspired to write The Ultimate Ponzi: The Scott Rothstein Story so that no other community suffers the damage inflicted by an overnight philanthropist.
Chuck and his wife Sandra live in Fort Lauderdale.