New Emails Emerge From Rothstein Ponzi Implosion
Sources are saying that WSFL/Sun-Sentinel reporter Jack Hambrick has filed a misdemeanor complaint against Kim Rothstein bodyguard Joe Alu alleging battery over their courthouse scuffle on Wednesday. I haven't been able to reach Hambrick, but Alu says he hasn't heard anything about it, and Fort Lauderdale Police Department spokesman Frank Sousa says they haven't received a complaint on it. I'm checking with the State Attorney's Office, but for now it remains a rumor.
There's much more interesting information coming from attorney Bill Scherer in his legal battle with Michael Szafranski, the "independent verifier" on Scott Rothstein's bogus settlement deals and head of a feeder fund that put millions into the scheme.
Scherer yesterday filed a new response to Szafranski's motion to disqualify the lawyer from the case. You can seethe extraordinary filing here (scroll down to the bottom of the document to read the emails in their entirety). In it, Scherer includes numerous emails that went back and forth between Szafranski and Scott Rothstein as the Ponzi scheme unraveled in late October. The emails provide a wealth of information and insight into the scandal, including key financial information of some of those involved.
Rothstein comes across as cocky and blustering even as his empire is collapsing before his eyes. He's clearly the alpha male in the close relationship with Szafranski (both men routinely end their emails with variations of "love you," and at one point, Szafranski, or "Mikey," as he calls himself, refers to Rothstein as "master").
Szafranski is clearly panicked by Rothstein's erratic behavior and disappearance, though he doesn't realize that his close friend was fleeing the country.
"[C]an you plz call me so I know bob norman didn't steal your bbery [Blackberry] and start answering ur email," Szafranski joked in an email on October 27, just a few hours before Rothstein boarded a Gulfstream V jet and flew to Morocco.
As Szafranski takes flack from Rothstein investors like Mel Lifshitz, Ira Sochet, and someone called "Barrie" (it's not clear if that's Barry Bekkedam or another investor, but he has ties to Rothstein funder Coquina Investments of Corpus Christi, Texas), Rothstein repeatedly calls them
and instructs Szafranski to get him simple numbers on how much the investors contributed, how much they have been paid, how much they are owed, and how much they stand to lose.
"Do as I laid it out," Rothstein writes on October 29. "I have to show it to these morons."
Later, he asks Szafranski, "What does total payments mean ... is that the totl they received? Make it simple for these idiots. ... Love ya."
That day, Szafranski reported that his own investors with ABS currently had $23,200,000 invested with Rothstein and had gotten back $11,663,500.01, meaning what their "exposure" -- i.e., how much they stood to actually lose -- was $11,536,499.99. Szafranski literally begged Rothstein to pay him the money.
"They will destroy me if I lose them $$, begging you," Szafranski wrote Rothstein.
Rothstein, meanwhile, reported from Morocco that he would return to town by "Monday at the latest" and that he was "doing pretty well."
The next day, Szafranski asked Rothstein to borrow the money to pay his own investors, writing, "if possible, can abs borrow funds to pay these abs cases, I don't want to have give [investors] the explanation and they will freak if payments are not sent. i will repay you or the oper acct when we resume but I need this ... i don't want my clients to go crazy over such a small dollar abt [sic] ... Love you ... call me I miss you and I am worried ... mikeyyy."
Other Szafranski financial findings:
Miami investor Ira Sochet, according to Szafranski, put in $153,300,000 and had gotten back $102,704,285.72, leaving him with $50,595,714.28 in losses.
Coquina Investments put in $37,700,000 and had received all but $6,785,833.34 back.
Emess Capital of Brooklyn put in $60 million, got back $24 million and were thus out $36 million.
On October 30, Rothstein allegedly made some payments to ABS, prompting this email from Szafranski: "Thank u soo much scott. Where are you. I am so worried. I want you back here. It is so hard for me knowing ur in a living hell. Tell me u closed ur deal and ur coming back today. Love you ... Mikeyyy."
Damn, I have to go to a meeting. There's a lot more in the emails that I will share. In the meantime, you can check them out yourselves.