March 17, 2010 5:51 PM

Rothstein's World: An FBI Informant, a Lawyer's Free Rent, and a Free-Spending Wife

Posted by Brian Baxter

The scandal stemming from Florida lawyer Scott Rothstein's $1.2 billion Ponzi scheme continues to unravel in increasingly unpredictable ways.

In recent days, reports have surfaced about Rothstein's allegedly brief stint as an FBI informant and his wife's spending habits. A deposition on Tuesday of Rothstein's lawyer, Marc Nurik, also revealed details about Nurik's living arrangements, and how much Rothstein paid the lawyer when the two were partners at Rothstein's firm, Rothstein Rosenfeldt Adler (RRA).

According to the Daily Business Review, a sibling publication, Nurik lived rent free for 15 months in a waterfront Fort Lauderdale home owned by Rothstein while Nurik worked for now-defunct RRA. Rothstein bought the property for $1.9 million several years ago.

"Scott as a friend allowed me to live in his house, with the understanding [that I would eventually pay rent]," Nurik said in a deposition conducted by Charles Lichtman, a partner at Miami's Berger Singerman. (The firm is bankruptcy counsel to the court-appointed trustee for the RRA estate.)

In his deposition, Nurik said the rent was not part of his income. He testified that he has been paying rent of $2,500 per month for the 3,000 square foot, three-bedroom property since last October. It was then that Rothstein's scheme unraveled, and Nurik signed on to represent his former partner in the subsequent investigation by federal prosecutors.

Former RRA attorney David Boden lived next door to Nurik in another home owned by Rothstein, but Nurik testified that he did not know whether or not Boden paid rent, the DBR reports. Federal prosecutors have seized both homes as part of their probe into Rothstein's fraud.

Lichtman spent some time in the deposition reviewing Nurik's work history, the DBR reports. Nurik worked at Florida firm Ruden McClosky for eight years between 1998 and 2006 and was on the firm's management committee for two of those years. He left Ruden in May 2006 with six other lawyers for South Florida's Genovese Joblove & Battista--the firm is cocounsel to Berger Singerman in the RRA bankruptcy, the DBR notes--before signing on with Rothstein's firm in October 2007.

Lichtman then focused on Nurik's salary while he was a partner at RRA. Nurik said he earned $350,000 per year, and although he held "an honorary title of shareholder," he did not get a cut of the firm's profits.

The Florida Sun-Sentinel reports that Nurik also testified that he was unable to repay $190,000 in loans received from the firm. Nurik claimed that RRA policy provided for the money to be forgiven depending on the amount of business he brought to the firm, which he put at $1.9 million. (The bankruptcy trustee is trying to recover money for creditors, some of which is listed on RRA's books as loans to former attorneys, as the DBR has also reported.)

Asked about the loans and his testimony during the deposition, Nurik says, "At the end of the day, everyone has come forth on the government side and clearly asserted that I was not involved in anything improper or illegal. I made it clear that a portion of the money booked as loans was forgiven pursuant to my performance at the firm."

Nurik said that a $50,000 retainer paid to him by the family of Rothstein's wife, Kimberly, to represent her husband, has been turned over to her attorney Scott Saidel, the DBR reports. Nurik, who told us he didn't have his own attorney at the deposition because he didn't need one, also says that he's representing other clients for free with claims against the RRA estate. (Nurik is not currently being paid for representing Rothstein.)

"Whatever exists between the trustee and I in terms of financial issues, I'm sure we'll work out," he adds. "They have much bigger fish to fry."

Meanwhile, Kim Rothstein has been getting some attention of her own lately. The Miami Herald recently reported that Rothstein's wife didn't cut back on her lavish lifestyle as her husband's firm imploded. In a civil suit filed last week, Paul Singerman of Berger Singerman has accused Kim Rothstein of spending nearly $900,000 between 2006 and 2009 on everything from shoes and clothes to gym expenses and spa charges. Singerman is seeking to recover $1.13 million for creditors.

Commenting on the suit against his client, Saidel, reached by phone late Wednesday, says, "I understand that the bankruptcy attorneys need to do their job, but it's unfortunate that they feel the need to attempt to squeeze blood from a stone. Certainly Mrs. Rothstein was not complicit in her husband's wrongdoing, and to personally go after her seems a bit overzealous."

As for Scott Rothstein, he awaits sentencing at a hearing scheduled for May 6 after entering a guilty plea in January. It remains to be seen how U.S. district court judge James Cohn will react to reports that Rothstein briefly served as an FBI informant by agreeing to wear a wire to help the feds nab a reputed Miami mafioso. (Nurik declined to comment on the reports that Rothstein was a government informant.)

Chalk it up as another crazy chapter in the Scott Rothstein saga.

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