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December 8, 2009 7:50 PM

Billionaire Slaps Scott Rothstein with Suit

Posted by Brian Baxter

The almost daily developments in the bizarre saga of disbarred Fort Lauderdale lawyer Scott Rothstein seem almost too outlandish to be true. Here's the latest.

On Monday, sibling publication the Daily Business Review reported that the federal government will have first dibs on Rothstein's seized property if he is convicted, noting that the fraud allegations against Rothstein have hit the $1.6 billion mark.

Now, another notorious Floridian has entered the picture.

Billionaire money manager and convicted sex offender Jeffrey Epstein has filed suit against Rothstein, claiming that the disbarred lawyer touted a fictitious $200 million sexual harassment settlement that Epstein was willing to pay as a guise to lure investors into his Ponzi scheme. Epstein, represented by Robert Critton, Jr., of West Palm Beach's Burman, Critton, Luttier & Coleman, filed his civil suit in Palm Beach County Circuit Court late Monday.

According to the 36-page complaint, Epstein accuses Rothstein of "engaging in a pattern of racketeering that involved a staggering series of gravely serious obstructions of justice, actionable frauds, and . . . egregious civil litigation abuses" that damaged Epstein and others. The complaint also accuses Rothstein of forging federal court orders and opinions.

In an interview with The Am Law Daily, Critton lashed out at Rothstein for fraudulently claiming that his client had agreed to pay $200 million to settle civil sexual harassment charges filed against Epstein by several women after the scandalous allegations against him first came to light in 2005. (In June 2008 Epstein's all-star legal team negotiated a plea to two prostitution charges that infuriated Palm Beach's police chief, who had already written a letter criticizing state prosecutors; Epstein was released this July after serving almost a year in prison.)

Three of the sexual harassment suits were filed by lawyers working for Rothstein. Critton says those same lawyers falsely claimed to represent many more women with potential claims against Epstein. The additional women never actually existed, Critton says, adding that they were merely introduced to entice investors to fund litigation against his client.

As a result, Critton says Epstein had to spend more money on his defense in those criminal cases, and his lawyers wound up engaging in frivolous discovery and depositions. The additional cost was between $100,000 to $200,000, Critton says, adding that the whole matter has only complicated efforts to resolve current cases pending against the billionaire.

"Instead of a defendant having a legitimate discussion with a plaintiff to resolve a case, [Rothstein's] out there pitching millions in dollars from these other cases he claims to have," he says. Critton adds that Rothstein's "abusive litigation tactics" included trying to depose "extraneous individuals" that would embarrass Epstein.

Those individuals include Bill Clinton, David Copperfield, and Donald Trump--all close friends of Epstein who traveled with the money manager on his private plane. (Rothstein sought access to flight records and other information that he could show to potential investors to boost his claim to a nine-figure settlement.)

Critton declined to comment on the damages Epstein is seeking from Rothstein over the alleged settlement claims, though he hinted that the amount will be at least $100,000 and more than that if damages are trebled. Critton has yet to hear from lawyers for Rothstein on the civil suit and says he hasn't yet decided whether claims will be brought against other members of Rothstein's defunct firm, Rothstein Rosenfeldt Adler.

"I'm taking baby steps on this," says Critton, no stranger to high-profile sex suits.

Rothstein's criminal lawyer, Marc Nurik, a former partner at RRA, was not immediately available for comment.

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