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Thursday, November 12, 2009

How Can Smart Rich People Have Been So Stupid?

I go back to my column the other day, the one where I asked again how can smart people be so stupid? How does a guy who becomes a millionaire businessman selling cars fall for a scheme where he sues someone for a million dollars and then believes that his attorney got a $23 million dollar judgment which he can only collect if he puts up $57 million? I mean, really folks, help me out here. How do you get so rich being so stupid?

So today's reveations from the FBI suggest Mr. Morse was not alone in his lack of wisdom.

Number One. Sayeth the FBI: Attorney Scott Rothstein's alleged investment scam may exceed $1 billion dollars in victims' investments. It is no longer Madoff Lite. It is Made Off South. And they need your help.
They set up a hot line and email address for you to contact them if you too have been burned by this forest fire. As usual, like most government e-mails, the email address requires a doctoral address to access, but here it is:.
The number: 1-800-CALL-FBI, or 1-800-225-5324. Select the "Rothstein Rosenfeldt Adler'' option, which is Option 3. If Miss Cleo answers, you are in trouble. How is she doing anyway?

Number Two. Rothstein is believed to have run the scam from his offices at the Rothstein Rosenfeldt Adler law firm, which is going into involuntary bankruptcy. I feel for the lawyers, but I am concerned and state again how pathetic it is that in the sea of writers and flood of articles coming out of this disaster no one is writing about the hundreds if not thousands of clients left in the lurch. I just wish I could figure out what to do for them, but how do you call people you can't reach. I hope they have the sense to be seeking out new counsel.

Number Three. It would be a good thing if the Chief Judges in the tri county area issued administrative orders tolling legal responsibilities and time compliant mandates within those cases and claims that are being prosecuted by RRA lawyers. At the same time, each judge with an RRA case ought to hold an emergency status conference with notice to the clients to appear.

Number Four, law firm co-founder Stuart Rosenfeldt stepped down as its chief executive officer Wednesday, handing off full control to court-appointed receiver Herbert Stettin, a retired Miami-Dade judge.
Bankruptcy attorneys hired by the firm said at a Thursday court hearing that they will consent to the involuntary petition for bankruptcy filed by creditors earlier this week.

"In plain English, this means the bankruptcy will move forward," Stettin said.

But what Judge Stettin does not make clear is that a US District Court Judge may appoint someone other than him to supervise the bankruptcy and act as a trustee, which would divest the respected but retired Dade jurist as the man to go to in this mess. We will see if the parties work that out.

Number Five. If you read all the other bloggers covering this, especially The Daily Pulp with Bob Norman, there is a clamor to demand Scott Rothstein's arrest. Or at least an emergency suspension from the Florida Bar. I don't know about you, but I don't see him taking any cases right now. Anyway, the FBI said they do not want to be pressured into an arrest until they have adequately formulated all their charges, and put their ducks in order. How many people though were sitting ducks? The FBI now says thousands.

I will tell you this if I were the judge whose order Scott Rothstein purportedly forged, I don't need the FBI or anyone else at the Florida Bar to tell me what to do. You call Mr. Nurik, Rothstein's counsel, and you inform him that a 'Rule to Show Cause Hearing Why He Should Not Be Held in Contempt' is being held at 4 o'clock this afternoon, and you lock his ass up sua sponte.

Scott, I have to tell you this, I just don't know who was dumber, you in thinking you could pull this off forever, or all the people around you for not demanding a better accounting of your reckless flamboyance. You will need those watches in the picture above. You are going to have plenty of time on your hands.

But this column really isn't so much about you.
I still want to know how could so many rich people who were supposedly so smart manage to be so stupid?

Here is the fake order, courtesy of the Sun Sentinel or South Florida Lawyers or one of the many bloggers uncovering this massive fraud. In my 35 years as a lawyer, litigating everything from minor misdemeanors to murder in the first degree, I have never seen such an outrageous act of misconduct by another attorney, and the courts and authorities have an obligation to act at once and without any further hesitation.


  1. Kent you are brutal. Honest but brutal. How come no one comments here?

  2. Probably not a lot of comments because I started the blog moderated so it did not get filthy and uncontrolled, which probably makes it less alluring or appealing. Still have a couple of hundred subscribers and links and hope people get to see it, though being sick this summer meant starting up again slowly this Fall. Anyway it is what it is, as my friend Alvin says. It is what it is. Just a way to record my thoughts on all things legal.

    As far as commenters go, the Pulp reigns. Look at this one from today :

    'A flashy So Fla attorney who dresses tackily and hobnobs with other rich and famous people while fleecing them, a has been Hall of Fame quarterback without a Super Bowl ring, strippers being kept in upscale hotels, trips to Morocco, local restaurants, and a swanky nouveau jewelry business, throw in Russian and Israeli mafia ties, and if Bob tries to fictionalize this, Carl Hiaasen sues for plagiarism!

    Be careful Bob, Carl might be eyeing this for his next love story from South Florida to the rest of the world.'

    The guy is right, this is out of a 1980s Carl Hiassen novel, and we all saw this coming. We all saw it coming, so how come all these people with all this knowledge are first coming out of the woodwork now? Cause as I said in my first column, and as an accused Ponzi schemer personally told me, 'Norm, as long as the money kept on flowing, no one cared. No one dared.'

    It is all about greed. I would rather be a poor broke lawyer than an indicted one.

  3. It has taken a day to catch up on all the crap that is unfolding here. Your stuff is somewhat intellectual and honest. Thank you.
    Not breakign news but at least fair comment on it. I feel sorry for the clients but how do yuo feel too as a landlord if you have a whole floor rented to 70 attorneys for like a hundred thousand a month and then suddenly they can't pay you and walk out without notice. What does that do to them ,the building the staff , the restaurant on the bottom floor everyone was eating at evry day, which goes from boom to bust overnite. so many people hurt so quickly. almost a plane crash.lots of survivors but they have all been burned and you gotta wonder how many of them were lookng the other way when everyone around them was smoking on board , if you know what i mean.

  4. "Smart" and "Rich" don't necessarily and often don't go together. Look at the group that gave money to this guy. How about rich, greedy and wanting to feel important?

  5. Good stuff. I just wrote a piece on how gullible we were as a legal community and how, unless we do something different, we'll continue to be seduced by power, flash, access, and money.

  6. Thanks SFL for the kind words. We finally found an issue to blog about that everyone loves- how bad lawyers are :-)

  7. you are so right, you are so right, a sucker born every minute, but these were supposed to be the bright ones.