UPDATED: Top Five Highlights From Debra Villegas' Confession Hearing
Villegas, 43, pleaded guilty to one count of conspiracy to commit money-laundering for her role in aiding Scott Rothstein's Ponzi scheme. When she's sentenced next month, she could face more than 10 years in prison.
UPDATE: View the full transcript here.
(Note: In this transcript, Zloch is identified as "The Court," the federal prosecutor is Lawrence LaVecchio, and Villegas' defense attorney is Robert Stickney.)
1. Zloch appeared surprised -- and perhaps disappointed -- that there weren't more charges against Villegas.
THE COURT: But this is a one-count information?
MR. LaVECCHIO: It is, Your Honor; charging conspiracy to commit money laundering.
THE COURT: But her involvement was greater than that.
MR. LaVECCHIO: Well, the underlying charges -- the underlying activity that formed the basis for the specified unlawful activity she was involved in. Yes, sir.
THE COURT: Well, to say that she was involved in it, that would be an understatement.
MR. LaVECCHIO: Well, she was part and parcel of it. Yes, Your Honor.
THE COURT: She was intimately involved in it.
MR. LaVECCHIO: Yes, sir.
2. Zloch inquired about Villegas' mental health, raising questions many observers have shared about her state of mind.
THE COURT: Have you ever been treated for any mental illness in the past?3. Villegas said she first learned that the settlements agreements she was preparing were fake in February 2008, several weeks before her best friend, Rothstein Rosenfeldt Adler attorney Melissa Britt Lewis, was murdered.
THE DEFENDANT: I am currently being treated.
THE COURT: For what?
THE DEFENDANT: For depression, anxiety. Basically depression and anxiety and panic disorders.
THE COURT: Is this treatment a result of the situation that you find yourself in?
THE DEFENDANT: Yes, Your Honor.
THE COURT: Are you -- other than what you've told me are you presently suffering from any mental or emotional disability or problem other than what you've told me?
THE DEFENDANT: No, Your Honor.
THE COURT: Have you ever suffered from any addiction to anything or alcohol abuse?
THE DEFENDANT: No, sir.
THE COURT: Are you taking any drugs, medications, or pills of any kind?
THE DEFENDANT: I'm taking prescription medication.
THE COURT: For the --
THE DEFENDANT: For the mental depression and anxiety.
THE COURT: Have you taken any drugs, medications, or pills of any kind in the past 24 hours?
THE DEFENDANT: Yes, Your Honor. This morning I took my prescribed medication.
THE COURT: Is that medication in any way affecting your ability to understand what's being discussed here in court?
THE DEFENDANT: No, sir, Your Honor.
THE DEFENDANT: Mr. Rothstein -- well, initially I was preparing the settlement agreements believing them to be legitimate settlement agreements for Mr. Rothstein. And sometime after that Mr. Rothstein approached --4.Villegas implicated Irene Stay, the chief financial officer at RRA, in the scheme.
THE COURT: Move a little closer to that microphone.
THE DEFENDANT: Mr. Rothstein approached me and I guess at that point informed me that the settlement documents were not legitimate and that --
THE COURT: Approximately when was that that he told you that these settlement documents were not --
THE DEFENDANT: I would -- I estimate that to be in February of --
THE COURT: Of?
THE DEFENDANT: -- 2008.
MR. STICKNEY: How do you know that?
THE DEFENDANT: I know that because it happened several weeks before a dear friend of mine was murdered.
THE COURT: It happened what? Several --
THE DEFENDANT: Several --
THE COURT: Move that microphone up, please.
THE DEFENDANT: It happened several weeks before a dear friend of mine was murdered. MR. STICKNEY: Another attorney at the law firm, and her husband is currently charged with that murder.
THE DEFENDANT: Ex-husband.
THE COURT: And so several weeks before that incident is when Mr. Rothstein told you that the --
THE DEFENDANT: He told me that the settlement documents were -- he told me that he had gotten in a position with some not-so-nice people and that if I did not assist him in signing these documents, that individuals would put a bullet in his head. And ultimately -- not immediately, but ultimately I did sign the documents. And I knew that upon signing the documents that it was wrong, and I should have gone to the authorities. I wish I would have gone to the authorities, but unfortunately that wasn't the decision that I made at the time.
THE COURT: But then you continued on assisting him after that point in time.
THE DEFENDANT: Yes. Initially he said it would be a one-time thing, and I did it. And then I was out. I'm sorry. I was out of the office for a period of time because of the murder. And after I returned he approached me again and then again and always with a promise that it was the last time; but obviously it wasn't, and I did sign the documents.
THE COURT: Well, what did you think was happening to the funds?
THE DEFENDANT: I thought that the people that Mr. Rothstein expressed that he had gotten involved with was the Mafia, and I believed that the money was being laundered through the firm's trust accounts.
THE COURT: Well, did you ever transfer any monies to Mr. Rothstein?5. Villegas suggested that another, unnamed person became involved in the scheme in its final months. But until that time, Villegas said she didn't know that investors were being swindled.
THE DEFENDANT: No, sir. I had no access to firm bank accounts.
(Counsel confers with client) THE DEFENDANT: The document -- the settlement documents that I prepared, Mr. Rothstein and another individual had formatted an Excel spreadsheet for the dollar amounts and information on those settlement documents to be put into an Excel spreadsheet. So I would put the information into the Excel spreadsheet and email it to the person who would then -- (Counsel confers with client)
THE DEFENDANT: To Irene Stay.
THE COURT: Pardon?
THE DEFENDANT: To Irene Stay. And she was the firm's CFO and handled the firm bank accounts. And I would email the spreadsheet to her, and she would deal with the money. I didn't deal with that part of it.
MR. STICKNEY: But, Your Honor, the important fact is that my client knew the amounts. As the Court had asked, did she know what the amounts were. And yes, she did, because she was involved in the spreadsheet preparation and emailing that to Irene Stay who would then take care of the actual financial transaction. So even though my client didn't actually wire transfer money she's responsible for that, and she understands because she was involved in helping prepare the documents that perpetuated this fraud.
THE COURT: So, Ms. Villegas, just so I understand what you're telling me, you did not know that other people were investing in these so-called settlement agreements?
THE DEFENDANT: Not until the last several months when another individual became involved in it and he was bringing in investors and he was preparing the bulk of that paperwork. And I assumed that it was the same scenario. To be honest I --
(Counsel confers with client)
THE DEFENDANT: Now I've lost my train of thought.
(Counsel confers with client)
THE DEFENDANT: Oh, investors. You used the term "investors." I didn't know there were any investors. I didn't understand this to be an investment scheme. I understood this to be a money-laundering scheme I guess you would call it. So I never met an investor. I never sat in on a meeting. I never talked with anybody. I never spoke to the bank. I prepared these documents, and I signed names to these documents. And I didn't ask questions because it being the Mafia, I really didn't want to know any more than I already knew.