EFTA00223265

Roy BLACK BLACK JESSICA FONSECA-NADER HOWARD M. SREBMCK Scow A. KORNSPAN SREBNICK KATHLEEN P. PHILLIPS AARON ANTHON LARRY A. STUMPF KORNSPAN MARCOS BEATON, JR. MARIA NEYRA MATTHEW P. O'BRIEN JACIUE PERCZEK & STUMPF JENIPER J. SOULII0AS MARK A.J. SHAPIRO =PA.= NOAH Fox JARED E-Mail: December 9, 20O , Esq. Assistant United States Attorney United States Attorney's Office Southern District of Florida 500 South Australian Avenue Suite 400 West Palm Beach, Florida 33401 RE: Jeffrey Epstein Dear You emailed me a letter on November 2, asking whether Jeffrey Epstein's place of employment remained constant. It has. I reviewed a Google map to confirm that the distance between that place of employment and the location where he was stopped by Palm Beach Police is less than 3 miles (and that the location where he was walking was on a direct mute to his place of work). It has taken us a while to respond to your letter because other matters have consumed our time and effort. Over the past five weeks, the massive billion-dollar conspiracy created and run by Scott Rothstein has been exposed. On Monday, Mr. Epstein filed a state civil RICO lawsuit charging Rothstein, his partner Brad Edwards, and others with tortuous and fraudulent abuses of process that resulted in serious injury to Mr. Epstein. A copy of the Complaint is enclosed with this letter. As ou know, Rothstein's firm represents and three of the plaintiffs who have brought civil actions against Mr. Epstein. The Rothstein firm was a criminal enterprise that used the litigation against Mr. Epstein to lure investors into its billion-dollar ponzi scheme. We believe that Rothstein and his co-conspirators used the government's criminal investigation as a means to perpetrate and further their fraud. For example: 201 S. Biscayne Boulevard, Suite 1300 • Miami, Florida 33131 • Phone: • Fax: • www.RoyBlack.com EFTA00223265 , Esq. December 9, 2009 Page 2 1. The Rothstein lawyers sought disclosure of the NPA to prove who the victims were, and used the NPA to 'corroborate" their false claims. 2. Rothstein and his co-conspirators abused the legal process in other cases. They forged the signature of judges, and even forged an Eleventh Circuit opinion. 3. Rothstein lawyers demanded phony protective orders. 4. In our case, they sought discovery of Epstein's plane logs to fish for celebrities to extort and convince investors that huge amounts of settlement money was available from them. 5. Rothstein lawyers litigated claims using Jane Doe names to make the phony settlements appear plausible to investors, and also to prevent any investigation into the claims by the investors. 6. Rothstein and others told investors that your office directed the women to the Rothstein firm. 7. Rothstein and his co-conspirators gathered information illegally, and shared it with the other plaintiffs' attorneys in this case. 8. Rothstein deceived investors into believing that he had the confidential victim list you prepared, and that he had a copy of the NPA. 9. Rothstein told investors that his investigators had sophisticated electronic bugging equipment to gather evidence against Epstein. 10. Rothstein told investors that Epstein had offered to settle the cases for $200 million, when there have been no such discussions about any settlement at any price. And it does not stop thre. Rabin, latners, and his employees investigated and litigated the , and cases with funds derived from their criminal enterprise and their fraud and misrepresentations to investors. But we have been stymied from debunking fraudulent claims brought by the Rothstein criminal enterprise because you have threatened that such action on Black, Srebnick, Komspan & Stumpf. P.A. EFTA00223266 A. Villafafia, Esq. December 9, 2009 Page 3 our part would constitute a breach of the NPA. So the Rothstein lawyers, once again, are using the power of the federal government to perpetrate and further their fraud. And the expense of litigating these cases has been extreme. For example, Bob Josefsberg, who I do not believe was aware of the Rothstein crimes, is now demanding over $2 million in legal fees. As a lawsuit brought by some of the investors' claims, Rothstein and his partner Edwards used Jeffrey Epstein as bait. The litigation strategy, media pronouncements, and investigatory initiatives of Rothstein and Edwards were calculated to support Rothstein's deceptions rather than to advance the position of his clients. I bring these facts to your attention so that if you had contact with Edwards or those associated with him in the past concerning Mr. Epstein, you consider not continuing communications with any of them in the future. I would like a short conference with you in person to talk about Mr. Epstein's progress through the state criminal justice system, to discuss several outstanding issues that I want to make sure you have accurate information about, and, from my perspective, most importantly, so that I can provide Mr. Epstein with proper counsel going forward. If you email me some dates when you are available this month, we can schedule a short meeting in your office hopefully before the year ends. Roy Black RB/wg Enclosure Black. SrebnIck Komspan & Stumpf, PA EFTA00223267 'THE CIRCUIT COURT QF THE FIFTEENTH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA &WHEYSett* Complex Litigation, Fla: k cht Pro. 1201 CASE NO. pn v. Plaintiff; 50 2009CAO' -1Oe)"4B SCOTT ROTHSTEIN, indliricluallYt BRADLEY J. EDWARDS, Individually, and L;,M;,. Individually, COPY RECEIVED FOR FPLING Defendants. DEC Ti itgag orfArt6N M. POCK COMPLAINT 0Ingfil% ciPMPTROIVIR NWT Whig/INN Plaintiff, JEFFREY EPSTEIN, (hereinafter °EPSTEIN", by and through ilia, undersigned attorneys, flies this action against Defendants, SCOTT' ROTHSTEIN, individually, BRADLEY J. EDWARDS, Individually; and-, Individually. Accordingly, EPSTEIN states: SUMMARY OF ACTION Attorney Scott ROthateirtalded by.other lawyerS and employees:at the firth of Rothstein, Rosenfeldt, and Adler,.P.A. for personal greed and enrichment, In betrayal of the ethical, legal and fiduciary duties' o their 6wn debts and professional dbligatibna to the administration of justice, deliberately engaged In a pattern of racketeering that Involved a staggering series Of gravely serious obstifictions of Justice, actionable frauds, and the orchestration and conducting of egregious civil litigation abuses that resulted in profoundly serious injury to 4emyy Epstein one of several targets of their misconduct EFTA00223268 Epstein 1 RFtA, et al. Page 2 and others. Rothstein and RRA's fraud had no boundary; Rothstein and his co- conspirators forged Federal court orders and opinions. Amongst the violations of law that are the subject of this lawsuit are the marketing of non-existent Epstein settlements and the sanctioning of a series of depositions that were unrelated to any principled litigation purpose but instead designed to discover extraneous private information about Epstein or his personal and business associates (including well-known public figures) in order to defraud investors and support extortionate demands for payment from Epstein. The misconduct featured the filing of legal motions and the pursuit of a civil litigation strategy that was unrelated to the merits or value of their clients' cases and, instead, had as its improper purpose the furthering of Rothstein's misrepresentations and deceit to third party investors. As a result, Epstein was subject to abusive investigatory tactics, unprincipled media attacks, and unsupportable legal filings. This lawsuit is filed and will be vigorously pursued against all these defendants. The Rothstein racketeering enterprise endeavored to compromise the core values of both state and federal justice systems in South Florida and to vindicate the hardworking and honest lawyers and their clients who were adversely affected by the misconduct that is the subject of this Complaint. Plaintiff reserves the right to add additional defendants — co-conspirators as the facts and evidence is developed. GENERAL ALLEGATONS 1. This is an action for damages in excess of $15,000.00, exclusive costs, interest, and attorneys' fees. EFTA00223269 Epstein'. RRA, et al. Page 3 2. Plaintiff, EPSTEIN, is an adult and currently is residing and works in Palm Beach County, Florida. 3. Defendant, SCOTT ROTHSTEIN ("ROTHSTEIN"), is an individual residing in Broward County, Florida, and was licensed to practice law in the State of Florida. In November 2009, ROTHSTEIN voluntarily relinquished his law license in the midst of the implosion of Rothstein, Rosenfeldt and Adler, P.A. ("RRA"). He was disbarred by the Florida Supreme Court on November 20, 2009. On December 1, 2009, ROTHSTEIN was arrested and arraigned in Federal Court in Broward County, Florida. 4. At all times relevant hereto, ROTHSTEIN was the managing partner and CEO of RRA. 5. Defendant, ROTHSTEIN and Stuart Rosenfeldt, are and were the principal owners of equity in RRA and each co-founded RRA. 6. Defendant, BRADLEY J. EDWARDS ("EDWARDS"), is an individual residing in Broward County, Florida and is licensed to practice law in the State of Florida. At all times relevant hereto, EDWARDS was an employee, agent, associate, partner, shareholder, and/or other representative of RRA. 7. Defendant, ■. (t."), is an individual residing In Palm Beach County, Florida. At all times relevant hereto, was represented by RRA, ROTHSTEIN and EDWARDS in a civil lawsuit against Epstein and was an essential participant in the • scheme referenced infra by, among other things, substantially changing prior sworn testimony, so as to assist the Defendants in promoting their fraudulent scheme for the EFTA00223270 Epstein RRA, et al. Page 4 promise of a multi-million dollar recovery relative to the Civil Actions (defined below) involving Epstein, which was completely out of proportion to her alleged damages. 8. Non-party, RRA is a Florida Professional Service Corporation, with a principal address of 401 East Las Olas Blvd., Suite 1650, Fort Lauderdale, FL 33401. In addition to its principal office, RRA also maintained seven offices in Florida, New York, and Venezuela, and employed over 70 attorneys and 200 support staff. RRA also maintains an office at 1109 NE 2d Street, Hallendale Beach, Florida 33009-8515. RRA, through its attorneys, including those named as Defendants herein, conducted business throughout Florida, and relevant to this action, conducted business and filed lawsuits on behalf of clients in Palm Beach County, Florida. (RRA is currently a debtor in bankruptcy. RRA is not named as a Defendant). FACTUAL ALLEGATIONS 9. The United States in United States of America I. Scott W. Rothstein, Case No. 09-60331CR-Cohn, United States District Court, Southern District of Florida, has brought an action for Racketeering Conspiracy, 18 U.S.C. § 1962(d) against Scott W. Rothstein who was the chief executive officer and chairman of RRA. Within the information which was filed, the United States of America has identified the enterprise as being the law firm, RRA, through which Rothstein in conjunction with "his co- conspirators" (not yet Identified by the USA) engaged in the pattern of racketeering through its base of operation at the offices of RRA from sometime in 2005 up through and continuing into November of 2009. Through various criminal activities, including mail fraud, wire fraud and money laundering, the United States of America asserts that EFTA00223271 Epstein 1 RRA, et al. Page 5 Rothstein and his co-conspirators unlawfully obtained approximately $1.2 billion from investors by fraud in connection with a Ponzi scheme. The USA further alleges that "Rothstein and co-conspirators initiated the criminal conduct alleged in the instant Information in order to personally enrich themselves and to supplement the income and sustain the daily operation of RRA." In essence, in the absence of Rothstein and his co- conspirators conducting the Ponzi scheme, the daily operation of RRA, which included payroll '(compensation to lawyers, staff, investigators, etc.), accounts payable including unlimited improper, harassing and potential illegal investigation on cases, including Epstein-related matters, would in all likelihood would not have been sustainable. A copy of the information is attached as Exhibit 1 to this action. 10. As more fully set forth herein, RRA held Itself out as legitimately and properly engaging in the practice of law. In reality, ROTHSTEIN and others in RRA were using RRA to market investments, as described below, so as to bilk investors out of hundreds of millions of dollars. ROTHSTEIN and others in RRA devised an elaborate plan through which were sold purported confidential assignments of a structured pay-out settlements, supposedly reached on behalf of RRA for clients, in exchange for immediate payments to these clients of a discounted lump sum amount. Investors were being promised in excess of a 30% return on their investment which was to be paid out to the investors over time. While some of the cases relied upon to induce investor funding were existing filed cases, it is believed that the confidential, structured pay-out settlements were all fabricated. EFTA00223272 Epstein'. RRA, et al. Page 6 11. Based on media reports, Federal Bureau of Investigation (FBI) press conferences and releases and the Information the massive Ponzi scheme and pattern of criminal activity meant to lure investors began sometime in 2005 and continued through the fall of 2009, when the scheme was uncovered by some of the investors and the FBI. As of November of 2009, civil lawsuits were and continue to be filed against various Defendants as result of their massive fraudulent and criminal scheme. 12. This fraudulent and illegal investment scheme is also evidenced by the filing of Amended Complaint For Dissolution And For Emergency Transfer of Corporate Powers to Stuart A. Rosenfeldt, Or, In The Alternative, For the Appointment of A Custodian or Receiver by ROSENFELDT, and RRA, against ROTHSTEIN, individually. (Case No. 09 059301, In the Circuit Court of the Seventeenth Judicial Circuit, Broward County, Florida, Complex Business Div.), (hereinafter "RRA dissolution action, and attached hereto as Exhibit 2). 13. Plaintiff references the RRA dissolution action for the sole purpose that it acknowledges that RRA and ROTHSTEIN were in fact conducting an illegal and improper investment or Ponzi scheme based on promises of financial returns from settlements or outcomes of supposed legal actions, including the actions brought against Plaintiff EPSTEIN. The RRA dissolution action alleges in part that — "ROTHSTEIN, the managing partner and CEO of the firm (RRA), has, according to assertions of certain investors, allegedly orchestrated a substantial misappropriation of funds from investor trust accounts that made use of the law firm's name (RRA). The investment business created and operated by ROTHSTEIN centered around the sale of EFTA00223273 Epstein'. RRA, et al. Page 7 ment of RRA dissolution interests in structured settlements." See Preliminary State action, Exhibit 2 hereto. used in communications 14. In furtherance of the scheme, RRA's letterhead was ured settlements. RRA's trust regarding investment opportunities in purported struct s or wire transfer of monies account was used to deposit hundreds of millions of dollar nteed payments. from duped investors and other victims. RRA personally guara and fraudulent Court 15. Rothstein's scheme went so far as to manufacture false District Judge, Kenneth A. opinions/orders including forging the signatures of U.S. it in other cases. It is not Marra and U.S. Circuit Court Judge, Susan H. Black, 11th Circu d matters. See Composite yet known if he forged similar documents in Esptein relate Exhibit 3 hereto. on a daily basis through 16. The details of this fraudulent scheme are being revealed recent estimate of the financial various media reports and court documents. The most s. scope of the scheme is that it exceeds $1.2 billion dollar d as a defendant in three civil 17. Relevant to this action, EPSTEIN is currently name were handled by RRA and its actions alleging, inter alia, sexual assault and battery that of which is filed in federal attorneys including EDWARDS prior to its implosion — one .C. S.D. Fla.)(Jane Doe is a court (Jane Doe'. Epstein, Case No. 08-CIV-80893, U.S.D filed in state court in the 15th named Defendant herein), and two of which have been Epstein, Case No. Judicial Circuit Court, Palm Beach County, State of Florida, 502008CA028051XXXXMB AB;..'. Epstein, Case No. 502008CA028058XXXXMB EFTA00223274 Epstein RRA, et al. Page 8 AB), (hereinafter collectively referred to as the "Civil Actions," and ■ is a named Defendant herein). The Civil Actions were all filed in August and September of 2008. 18. What is clear is that a fraudulent and improper investment or Ponzi scheme was in fact conducted and operated by RRA and certain of the named Defendants, which scheme directly impacted EPSTEIN as a named defendant in the Civil Actions. 19. Miami attorney and developer, Alan Sakowitz, was quoted in a November 2009 article as saying that he had met with,ROTHSTEIN as a potential investor in August.of 2009, but became suspicious. He stated "I was convinced it was all a Ponzi scheme and I notified the FBI in detail how SCotty ROTHSTEIN was hiding behind a legitimate law firm to peddle fake investments."- Attorney Sakowitz was also quoted as saying ROTHSTEIN had sophisticated eavesdropping equipment and former law enforcement officers who would sift through a potential defendants' garbage looking for damaging evidence to use with investors to show how potential defendants could be in essence blackmailed into paying settlement that far exceeded the value of any legitimate damage claim. 20. Ft. Lauderdale attorney William Scherer represents multiple Rothstein related investors. He indicated in an article that RRA/Rothstein had used the "Epstein. Ploy ... as a showpiece as bait. That's the way he raised all the money. He would use. . .cases as bait for luring investors into fictional cases. All the cases he allegedly structured were fictional. I don't believe there was a real one in there." In fact, on November 20, 2009, William Scherer, on behalf of certain clients, filed a 147 page Complaint against ROTHSTEIN, David Baden, Debra Villegas, Andrew Barnett, TD Bank, N.A., Frank EFTA00223275 Epstein RRA, et al, Page 9 asserting various Spinosa, Kerstetter, Rosanne Caretsky and Frank Preve e behind the RRA facade; and allegations that further prove the massive Ponzi schem Complaint naming additional as of November 25, 2009, a 249 page Amended Defendants was filed. STEIN, David Baden, Debbie 21. In addition, and upon information and belief, ROTH Jenne (all employees of RRA) Villegas, Andrew Bamett, Michael Fisten and Kenneth meetings during which false through brokers or middlemen would stage regular ts that existed or RRA had statements were made about the number of cases/clien and share actual case files against EPSTEIN and the value thereof. They would show Thus, the attorneys and clients from the EPSTEIN actions with hedge fund managers. ges that otherwise may have have waived any attorney-client or work- product privile existed. of the actual Civil Action 22. Because potential investors were given access to some name of an existing Plaintiff files, investor-third parties may have became aware of a opposed disclosure of her legal who had filed anonymously against Epstein and had name. ARDS claiming the need 23. In all other instances, by RRA, ROTHSTEIN and EDW they were able to effectively for anonymity with regard to existing or fabricated clients, was a key element in the use initials, Jane Doe or other anonymous designations which make the investors believe fraudulent scheme. Fictitious names could be created to many other cases existed against Epstein. EFTA00223276 Epstein 1 RRA, of al. Page 10 24. In each of RRA's Civil Actions, the Plaintiffs are or were represented by RRA and its attorneys, including ROTHSTEIN and EDWARDS. 25. In addition, investors were told that in addition to the Civil Actions another fifty (50) plus anonymous females were represented by RRA, with the potential for hundreds of millions of dollars in settlements, and that RRA and its attorneys would sue Epstein unless he paid exorbitant-settlement amounts to protect his high-profile friends. 26. Upon information and belief, EDWARDS knew or should have known that ROTHSTEIN was utilizing RRA as a front for the massive Ponzi scheme and/or were selling an alleged interest or investment in the Civil Actions (and other claims) involving Epstein. 27. Further evidencing that EDWARDS (and possibly other attorneys of RRA) knew or should have known and participated in the continuation of the massive Ponzi scheme, a front-page Palm Beach Post article, dated November 24, 2009, reported on the recent filing of an amended forfeiture complaint by prosecutors against "dozens of ROTHSTEIN's real estate properties, foreign cars, restaurants and other assets — including $12 million in the lawyer's bank account in Morocco, along with millions more donated to political campaigns and charitable funds." The article further reported that — Attorney Scott ROTHSTEIN tapped into millions of dollars from his massive investment scam to cover payroll costs at his expanding Fort Lauderdale law firm, federal authorities said in court records released Monday. ROTHSTEIN's law firm (RRA) generated revenue of $8 million in one recent year, yet his 70-lawyer law firm had a payroll of $18 million, EFTA00223277 EpsteinI. RRA, et al. Page 11 prosecutors said. ROTHSTEIN, who owned half of RRA used investors' money from his Ponzi scheme to make up the shortfall, they said. Subsequent articles and court filings have reflected ROTHSTEIN received compensation in excess of $35.7 million. in 2008 and $10.5 million in 2009, while his partner Rosenfeldt received greater than $6 million in 2008. 28. ROTHSTEIN attempted to lure the entity known as D3 Capital Club, LLC, ("D3"), by offering D3 "the opportunity" to invest in a pre-suit $30,000,000.00 court settlement against EPSTEIN; yet this supposed settlement never existed and was entirely fabntated. To augment his concocted story, ROTHSTEIN, upon information and belief, invited D3 to his office to view thirteen (13) banker's boxes of case files in Jane Doe (one of the Civil Actions) in an attempt to substantiate that the claims against EPSTEIN were legitimate and that the evidence obtained against him by RRA, ROTHSTEIN, and EDWARDS (the "Litigation Team") was real. 29. Upon information and belief, ROTHSTEIN and others offered other investors like the entity D3 fabricated investment opportunities in the Civil Actions involving EPSTEIN. Fisten (a former Dade County police officer with a questionable police record and RRA investigator) and Jenne (a former attorney, Broward County Sheriff and felon) assisted ROTHSTEIN in making these offers by providing confidential, privileged and work- product information to prospective third-party investors. It appears that 13 out of the 40 boxes seized by the FBI as part of its investigation at RRA consisted of files relating to the Civil Actions involving EPSTEIN, as reported by counsel for the Bankruptcy Trustee. Until those boxes can be reviewed, as well as other discovery, Epstein will not know the depth of the fraud and those involved. EFTA00223278 Epstein I RRA. et al. Page 12 30. By using the Civil Actions against EPSTEIN as "bait" and fabricating settlements regarding same, ROTHSTEIN and others were able to lure investors into ROTHSTEIN'S lair and bilked them of millions of dollars which, in turn, was used to fund the litigation against EPSTEIN for the sole purpose of continuing the massive Ponzi scheme. 31. As part of this scheme, ROTHSTEIN and the Litigation Team, individually and in a concerted effort, may have unethically and illegally: a. Sold, allowed to be sold and/or assisted with the sale of an interest in non- settled personal injury lawsuits (which are non-assignable arid non- transferable) or sold non-existent structured settlements (including those cases involving Epstein); b. Reached agreements to share attorneys fees with non-lawyers; c. Used investor. money to pay plaintiffs (i.e., 11.111. and Jane Doe) "up front" money such that plaintiffs would refuse to settle the Civil Actions; d. Conducted searches, wiretaps or intercepted conversations in violation of state or federal laws and Bar rules; and e. Utilized the judicial process including, but not limited to, unreasonable and unnecessary discovery, for the sole purpose of furthering the Ponzi scheme. 32. Any such actions by ROTHSTEIN, and other attorneys, including the Litigation Team, directly or indirectly, would potentially be a violation of various Florida Bar Rules, EFTA00223279 Epstein RRA, at al. Page 13 including prohibiting the improper sharing of fees or costs and various conflicts of issues rules. 33. Evidencing that the Litigation Team knew or should have known of the improper purpose that ROTHSTEIN was pursuing in the continuation of the scheme, ROTHSTEIN used RRA's Litigation Team in the EPSTEIN cases to pursue issues and evidence unrelated to and unnecessary to the claims pled in the Civil Actions, but significantly beneficial to lure investors into the Ponzi scheme orchestrated by ROTHSTEIN and other co-conspirators. 34. Upon information and belief, ROTHSTEIN and others claimed their investigators discovered that there were high-profile individuals onboard Epstein's private jet where sexual assaults took place and showed D3 (and possibly others) copies of a flight log purportedly containing names of celebrities, dignitaries, and international figures. 35. For instance, the Litigation Team relentlessly and knowingly pursued flight data and passenger manifests regarding flights EPSTEIN took with these famous individuals knowing full well that no underage women were onboard and no illicit activities took place. ROTHSTEIN and the Litigation Team also inappropriately attempted to take the depositions of these celebrities in a calculated effort to bolster the marketing scam that was taking place. 36. One of Plaintiffs' counsel, EDWARDS, deposed three of EPSTEIN'S pilots, and sought the deposition of a fourth pilot (currently serving in Iraq). The pilots were deposed by EDWARDS for over twelve (12) hours, and EDWARDS never asked one question relating to or about.., and Jane Doe (RRA clients) as it related to EFTA00223280 EpsteinI. RRA, et al. Page 14 transportation on flights of RRA clients on any of EPSTEIN'S planes. But EDWARDS asked many inflammatory and leading irrelevant questions about the pilots' thoughts and beliefs (which will never be admissible at trial) which could only have been asked for the purposes of "pumping" the cases and thus by using the depositions to sell the cases (or a part of them) to third parties. 37. Because of these facts, ROTHSTEIN claimed that Epstein wanted to make certain none of these individuals would be deposed and therefore he had offered $200,000,000.00 to settle the claims of RRA female clients various potential plaintiffs in actions against EPSTEIN. The offer of a $200 million dollar settlement by EPSTEIN was completely fabricated; no such offer had ever been made. 38. EDWARDS' office also notified Defendant that he intended to take the depositions of and was subpoenaing: (i) Donald Trump (real-estate magnate and business mogul); (ii) Alan Dershowitz (noted Harvard Law professor, constitutional attorney . • and one of EPSTEIN'S criminal defense attorneys); (iii)Bill Clinton (Former President of the United States); (iv)Tommy Mottola (former President of Sony Record); and 1) David Copperfield (illusionist). 39. The above-named individuals were friends and acquaintances of EPSTEIN with whom he knew through business or philanthropic work over the years. None of the above-named individuals had any connection whatsoever with any of the Litigation Team's clients, ■. or Jane Doe. EFTA00223281 Epstein 1 RRA, et al. Page 15 40. EDWARDS filed amended answers to interrogatories in the state court matters, I. and IIII, and listed additional high profile witnesses that would allegedly be called at trial, including, but not limited to: (i) Bill Richardson (Governor of New Mexico, formerly U.S. Representative and Ambassador to the United Nations); and (ii) Any and all persons having knowledge of EPSTEIN'S charitable, political or other donations;2 41. The sole purpose of the scheduling of these depositions or listing high profile friends/acquaintances as potential witnesses was, again, to "pump" the cases to investors. There is no evidence to date that any of these individuals had or have any knowledge regarding RRA's Civil Actions. 42. In furtherance of their illegal and fraudulent scheme against EPSTEIN, ROTHSTEIN, EDWARDS (who either know or should have known) and, at times, in her Civil Action against EPSTEIN: a) Included claims for de-triages in Jane Doe's federal action in excess of $50,000,000.00 rather than simply alleging the jurisdictional limits. b) Organized a Jane Doe TV media interview without any legitimate legal purpose other than to "pump" the federal case for potential 2 These high-profile celebrity 'purported' witnesses have no personal knowledge regarding the facts on these "Three Cases", but were being contacted, subpoenaed or listed to harass and intimidate them and Epstein, and to add 'star appeal to the marketing effort of the Ponzi scheme. EFTA00223282 Epstein 1RRA, et al. Page S6 investors or to prejudice Epstein's right to a fair trial in Palm Beach County. c) EDWARDS, Borger and Russell Adler (another named partner in RRA) all attended EPSTEIN's deposition. At that time, outrageous questions were asked of EPSTEIN which had no bearing on the case, but so that the video and questions could be shown to investors. d) Conducted and attempted to conduct completely irrelevant discovery unrelated to the claims in or subject matter of the Civil Actions for the purpose of harassing and embarrassing witnesses and EPSTEIN and causing EPSTEIN to spend tens of thousands of dollars in unnecessary attorneys' fees and costs defending what appeared to be discovery related to the Civil Actions but was entirely related to the furtherance of the Ponzi scheme. e) After EDWARDS was recruited and joined RRA in the spring of 2009, the tone and tenor of rhetoric directed to cases against EPSTEIN used by Attorney EDWARDS and Berger changed dramatically in addressing the court on various motions from being substantive on the facts pled to ridiculously inflammatory and sound-bite rich such as the July 31, 2009, transcript when EDWARDS stated to the Court in "What the evidence is really going to show is that Mr. Epstein — at least dating back as EFTA00223283 Epstein RRA, et al. Page 17 itted, back to far as our investigation and resources have perm an attempt to 1997 or '98 — has every single day of his life, made we're not sexually abuse children. We're not talking about five, not talking talking about 20, we're not talking about 100, we're n to law about 400, which, I believe, Is the number know en. . . and it enforcement, we are talking about thousands of childr he devised is through a very intricate and complicated system that h him that where he has as many as 20 people working underneat locate these he is paying well to schedule these appointments, to girls." and legally f) As an example, EDWARDS filed an unsupportable fer of deficient Motion for Injunction Restraining Fraudulent Trans rty of Assets, Appointment of a Receiver to Take Charge of Prope Potential Epstein, and to Post a $15 million Bond to Secure Judgment, in Jane Doe Epstein, Case No. 08-CV-80893- was the Marra/Johnson. The motion was reported in the press as ing). ultimate goal (i.e., to "pump" the cases for investor follow id of However, the Court found "Plaintiffs motion entirely devo evidence . . . ", and denied the motion in toto. les that he g) ROTHSTEIN told investors he had another 52 fema ve, represented, and that Epstein had offered $200 million to resol EFTA00223284 Epstein'. RRA, et al. Page 18 million, but that he could settle, confidently, these cases for $500 separate and apart from his legal fees. ld have known h) ROTHSTEIN and the Litigation Team knew or shou minimal value that their three (3) filed cases were weak and had for the following reasons: (i) — testified she never had any type of sex with Epstein; worked at numerous strip clubs; is an admitted prostitute and call girl; has a history of illegal drug use (pot, painkillers, Xanax, Ecstasy); and continually asserted the 5th Amendment during her depositions in order to avoid answering relevant but problem questions for her; (ii) ■- testified she worked at eleven (11) separate strip clubs, Including Cheetah which RRA represented and in which ROTHSTEIN may have owned an interest; and N. also worked at Platinum Showgirls in Boynton Beach, which was the subject of a recent police raid where dancers were allegedly selling prescription painkillers and drugs to customers and prostituting themselves. (iii) Jane Doe (federal case) seeks $50 million from Epstein. She and her attorneys claim severe EFTA00223285 Epstein'. RRA, et al. Page 19 emotional distress as a result of her having voluntarily gone to Epstein's home. She testified that there was never oral, and or sexual intercourse; nor did she ever touch his genitalia. Yet, Jane Doe suffered extreme emotional distress well prior to meeting Epstein as a result of having witnessed her father murder his girlfriend's son. She was required to give sworn testimony in that matter and has admitted that she has lied in sworn • testimony. Jane Doe worked at two different strip dubs, including Platinum Showgirls in Boynton Beach. ridiculous and irrelevant discovery such as i) Conducted ard subpoenaing records from an alleged sex therapist, Dr. Leon ted Bard in Massachusetts, when the alleged police report reflec h named that EPSTEIN had only seen a chiropractor in Palm Beac alleged Dr. Bard. No records relating to EPSTEIN existed for this ds was sex therapist, Dr. Bard, and the alleged subpoena for recor al; just another mechanism to "pump" the cases for investor appe behalf of j) Allowed a Second Amended Complaint to be filed on ■. alleging that EPSTEIN forced the minor Into "oral sex," yet ■. testified that she never engaged in oral, anal, or vaginal EFTA00223286 Epstein RRA. et al. Page 20 intercourse with EPSTEIN and she had never touched his genitalia. k) Told investors, as reported in an Associated Press article, that celebrities and other famous people had flown on EPSTEIN'S plane when assaults took place. Therefore, even though none (zero) of RRA's clients claim they flew of EPSTEIN'S planes, the Litigation Team sought pilot and plane logs. Why? Again, to prime the investment "pump" with new money without any relevance to the existing claims made by the RRA clients. I) After EDWARDS joined RRA, EDWARDS and former Circuit Judge William Berger filed and argued motion to make the Non- Prosecution Agreement (NPA) between Epstein and USAO public. But, RRA, EDWARDS and Berger, and their three clients, already had a copy of the NPA. They knew what it said and they knew the civil provisions in the agreement had no impact whatsoever on the three pending Civil Actions. The concept behind certain civil provisions in the NPA was to allow an alleged victim to resolve a civil claim with Epstein, maintain her complete privacy and anonymity and move on with her life. As an assistant United States Attorney stated at a hearing in federal court, the NPA was not designed "to hand them a jackpot or a key to a bank." EFTA00223287 Epstein 1 RRA, et al. Page 21 43. ROTHSTEIN, with the intent and improper motive to magnify his financial gain so continue to fund the fraudulent and illegal investment and/or Ponzi scheme, had EDWARDS demand excessive money from EPSTEIN in the Civil Actions. 44. The actions described in paragraph 42 above herein had no legitimate purpose in pursuing the Civil Actions against EPSTEIN, but rather were meant to further the fraudulent scheme and criminal activity of ROTHSTEIN so that he and others could ,fraudulently overvalue the settlement value of the existing and non-existent claims against EPSTEIN to potential investors. 45. As a result of the fraudulent investment or (Ponzi) scheme, RRA and its attorneys in the Civil Actions against EPSTEIN may have compromised their clients' interests. ROTHSTEIN and the Litigation Team would have been unable to give unbiased legal counsel because outside investor(s) had been promised a financial interest in the outcome of the actions. Additionally, if a plaintiff received payments from investment monies while her action is pending, this clearly could impact the plaintiff's decision of whether or not to settle the current litigation or shade their testimony (i.e.. commit perjury) to gain the greatest return on the investment and to further promote the Ponzi Scheme. 46. The truthfulness of M.'s allegations and testimony in II's state civil action have been severely compromised by the need to seek a multi-million dollar payout to help maintain RBA's massive fraud. Because fictitious settlements of tens of millions of dollars in cases relating to EPSTEIN were represented to "investors" in this Ponzi scheme, RRA and the attorneys in the Civil Actions needed to create a fiction that EFTA00223288 Epstein i RRA, et al. Page 22 included extraordinary damages. However, the actual facts behind her action would never support such extraordinary damages. Therefore, extraordinary measures were undertaken to create an entirely inflated value of her claims against EPSTEIN. a. Though she held herself out as a "victim" of Epstein, she admitted to having returned over and over again to him despite her current claim of abuse. She has now admitted, under oath, to being a call girUescort since the age of 15. (in her deposition September 24, 2009 Transcript "DT" 280:16-19). She testified 'Well, I lived life as a prostitute," (see DT 156:7) and "I am a prostitute when I make money" (see DT 156:12-13). • admitted her activity with men other than Epstein to making $1,000 a day from prostitution on maybe more than 20 occasions in one year alone (DT 157:11-158:21). admitted under oath to keeping a list of amounts she collected from "Johns" in "two or three" lined books including a book of "Psalms" that she obtained from a religious store (DT 152:1-14). Under the circumstances, her claim for damages against EPSTEIN, one of L.M.'s many "Johns" during that same period, would be so Incredible and certainly not likely to produce the extraordinary settlements promised to "RRA's investors." 47. In April 2007, before she was represented by EDWARDS, and RRA, gave sworn taped recorded testimony to the agents of the FBI. She was represented by a lawyer other than EDWARDS at that statement. She spoke of EPSTEIN in a very positive and friendly terms and directly contradicted the central allegations on which M.'s civil action against Epstein is now based. However, once in the hands of EFTA00223289 Epstein'. RFtPt, et al. Page 23 d to EDWARDS and RRA,..'s story changed dramatically. All of a sudden she wante of millions of dollars. sue EPSTEIN and like other RRA clients, sought tens was insistent that a. For example, in her sworn statement to the FBI, the conclusion of she "Jeffrey is an awesome man." (p. 21 — FBI); At because he's an stated: "I hope Jeffrey, nothing happens to Jeffrey shame that he has to awesome man and it really would be a shame. It's a he didn't do nothing go through this because he's an awesome guy and In fact, spoke so highly of wrong, nothing? (pp. 57-58 - FBI). Attorney's office EPSTEIN and her interactions with him that the US Attom ey could not informed a federal court in July 2008 that the US consider. a victim. began her Yet, by September 24, 2009, the date on which d by RRA and deposition in her civil action and now represente al EDWARDS, new and very different tale about purported sexu EIN had been misconduct under the supposed influence of EPST STEIN scam was thoroughly rehearsed and her role into the ROTH red that: complete. In her deposition in her civil action,... decla "I, I don't really care about money." (DT 206:8) right for "He needs time in jail. He doesn't want to be — this is not him to be on the streets living daily . . ." (DT 219:21-23) EFTA00223290 Epstein r RRA, et al. Page 24 "You don't think my whole life I have lived that shifty life because of Jeffrey Epstein?" (DT 222:7-8) b. In her sworn FBI testimony (pre-EDWARDS and RRA), ■ was emphatic that her interactions with Epstein involved no inappropriate sexual touching in any way. In fact, it was exactly the opposite: Q: Did he at any point kiss you, touch you, show any kind of affection towards you? A: Never, never. (p. 21 — FBI) . . . Q: So he never pulled you closer to him in a sexual way? A: I wish. - No, no, never, ever, ever, no, never. Jeffrey is an awesome man, no. (p. 21 - FBI) Yet, II filed her second amended complaint in April 2009, after EDWARDS joined RRA, the allegations against EPSTEIN in El's complaint became even more salacious. In paragraph 12 of n 's Second Amended Complaint, IS alleges among other things, that: "Jeffrey Epstein coerced, induced, or enticed . . .the then minor Plaintiff to commit various acts of sexual misconduct. These acts included, but were not limited to, fondling and inappropriate and illegal sexual touching of the then minor Plaintiff, forcing or inducing the then minor plaintiff into oral sex or other sexual misconduct..." EFTA00223291 Epstein'. RRA, et al. Page 25 ),fl. testified that c. In her sworn FBI statement (pre-EDWARDS and RRA first brought.. to EPSTEIN's 11.5 •, the individual who n't want any home, told.. 'Make sure you're 18 because Jeffrey does underage girls? (p. 8 - FBI). d by Yet at her September, 2009 deposition now represente EDWARDS and RRA,fl . told a very 'different story: Q: My question was what did.. tell you to tell Mr. Epstein about your age? A: She said it didn't matter. Q: That's your recollection about what she said? r. Don't A: Yes, she said — I remember her saying it doesn't matte worry about it. (DT 199:20-25) s made d. Pre-EDWARDS and RRA,■. testified to the FBI : "I alway 8 - FBI). sure — I had a fake ID, anyways saying that I was 18." (p. depo, she Yet, when questioned about her fake ID at her September 2009 stated: Q: And did you have a fake ID? A: No. Q: Have you ever had a fake ID? EFTA00223292 Epstein 1 RRA, et al. Page 26 A: No. (DT 300:5-8) e. In her FBI statement (pre-EDWARDS and RRA), ■ testified about others brought to the Epstein home. ■ testified that women she brought to EPSTEIN's home were eager for the opportunity and content with their experiences: A: None of my girls ever had &problem and they'd call me. They'd beg me, you know, for us to go to Jeffrey's house because they love Jeffrey. Jeffrey is a respectful man. He really is. l mean, and he all thought we were of age always. This is what's so sad about it. (p 30 - FBI). Q: Did any of the girls complain about what happened after they left there? A: No. You asked me that question. No, everybody loved Jeffrey. (p. 44 - FBI) •• A: Every girl that I brought to Jeffrey, they said they were fine with it. and like for example I — another of RRA's clients in the Civil Actions], a lot of girls begged me to bring them back for the money. And as far as I know, we all had fun there. (p. 45 - FBI) EFTA00223293 Epstein'. RRA, et al. Page 27 did a "180" at her Yet, with EDWARDS and RRA as her attorneys, September, 2009 deposition in saying: of their mind. A: . . . Once they were there, they were scared out and said.. They did it anyways and some of them walked out that ever don't ever do this to me again. That was the worst thing happened to me. (DT 170:6-11) 171:13) . . . A: And then, a lot of girls weren't comfortable. (DT ges'''. made f. The above represent only a few of the dramatic chan ARDS/RRA and after she in her testimony prior to her representation by EDW hired ROTHSTEIN, EDWARDS and RRA. zi) scheme, may knowingly 48. As a result of the fraudulent investment or (Pon n, or committed a fraud on the have compromised her alleged interests in her Civil Actio court. driven set of facts involving 49. RRA and the Litigation Team took an emotionally a Palm Beach Billionaire and alleged innocent, unsuspecting, underage females and and resolving the cases based sought to turn it into a gold mine. Rather than evaluating voluntary and consensual on the merits (i.e. facts) which included knowledgeable, pre-Epstein psychological and actions by each of the claimants and substantial antial sexual experiences pre- emotional conditions of each of the claimants and subst protective orders and objections Epstein, RRA and the Litigation Team sought through instead forged ahead with to block relevant discovery regarding their claimants. They Epstein into settling the cases. discovery the main purpose of which was to pressure EFTA00223294 Epstein 1 RRA, et al. Page 28 Fortunately, their tactics have not been successful. As Magistrate Judge Linnea Johnson wrote in a discovery order dated September 15, 2009 (DE 299 in Federal Case #08-80119) in denying Plaintiffs' Motion for Protective Order: "This is his [Epstein's] right. The Record in this case is clear that the childhood of many of the Plaintiffs was marred by instances of abuse and neglect, which in turn may have resulted, in whole or in part, In the damages claimed by the Plaintiffs." In addition, in an Omnibus Order dated October 28, 2009 (DE 377 in Federal Case #08-80119) Magistrate Judge Linnea Johnson wrote: "Here the request at issue goes to the very heart of the Plaintiffs damage claims, requesting not only general information relating to Plaintiffs sexual history, but inquiring as to specific Instances wherein Plaintiff received compensation or consideration for sex acts, claim other males sexually assaulted, battered, or abuses her, and/or claim other males committed lewd or lascivious acts on her, As a global matter, Plaintiffs clearly and unequivocally place their sexual history in issue by their allegations that Epstein's actions in this case has negatively affected their relationships by, among other things, "distrust in men," "sexual intimacy problems," "diminished trust," "social problems," problems in personal relationships," " feeling of stress around men," "premature teenage pregnancy," "antisocial behaviors," and "hyper-sexuality and promiscuity." Considering these allegation, there simply can be no question that Epstein is entitled to know whether Plaintiffs were molested or the subject of other "sexual activity" or "lewd EFTA00223295 Epstein 1 RRA, et al. Page 29 and lascivious conduct" in order to determine whether there is an alternative basis for the psychological disorders Plaintiffs claim to have sustained, whether Plaintiffs engaged in prostitution or other similar type acts and how certain acts alleged in the Complaint materially affected Plaintiffs' relationships with others or how those acts did not have such an affect on those relationships and/or whether Plaintiffs suffered from the alleged emotional and psychological disorders as a result of other sexual acts prior to the acts alleged in the Complaint. To deny Epstein thus discovery, would be tantamount to barring him from mounting a defense." 50. ROTHSTEIN, EDWARDS and C's actions constitute a fraud upon EPSTEIN as RRA, ROTHSTEIN and the Litigation Team represented themselves to be acting in good faith and with the bests interests of their clients In mind at all times when in reality, they were acting in furtherance of the investment or Ponzi scheme described herein. EPSTEIN justifiably relied to his detriment on the representations of RRA, and Defendants, ROTHSTEIN, EDWARDS and as to how he conducted and. defended the Civil Actions brought against him. 51. As a direct and proximate result of the fraudulent and illegal investment or Ponzi scheme orchestrated by ROTHSTEIN and as yet other unknown co-conspirators and as a result of the litigation tactics undertaken by the Litigation Team and ■. as set forth herein, Plaintiff EPSTEIN has Incurred and continues to incur the monetary damages including, but not limited to, having to pay an amount in excess of the Civil Actions' true value as a result of them refusing to settle in that a percentage of any payment by EFTA00223296 Epstein I RRA, et al. Page 30 EPSTEIN may have been promised to third party investors; incurring significant additional legal fees and costs as result of Defendants refusal to conduct settlement negotiations in a forthright and good faith manner because any monies paid by EPSTEIN is in reality a promised return on an Investment; and incurred significant attorneys' fees and costs in defending the discovery that was not relevant, material and/or calculated to lead to the admissibility of evidence, but which was done for the sole purpose of "pumping" the cases to investors. 52. EPSTEIN has also been Injured in that the scope of the fraudulent and criminal or racketeering activity so permeated the RRA law firm that EPSTEIN has been prevented from fully and fairly defending the civil actions brought against him. In essence, the very existence of RRA was based on the continuation of the massive Ponzi scheme orchestrated by ROTHSTEIN and other co-conspirators. In order to continue to bring in monies from investors, ROTHSTEIN and other co-conspirators used the Civil Actions against EPSTEIN, along with other manufactured lawsuits, as a means of obtaining massive amounts of money. 53. ROTHSTEIN, EDWARDS and M. are liable for damages caused to EPSTEIN — individually, and jointly and severally. Count I — Violation of 44772.101, et seq., Fla. Stat. - Florida Civil Remedies for Criminal Practices Act — Against All Defendants 54. Plaintiff realleges and incorporates paragraphs 1 through 53 as if fully set forth herein. EFTA00223297 Epstein!. RRA, et al. Page 3 55. RRA, ROTHSTEIN, EDWARDS and each and collectively constitute an enterprise pursuant to §772.102(3), Fla. Stat. (2009). 56. ROTHSTEIN, EDWARDS and ■. engaged in a pattern of criminal activity as defined in §772.102(3) and (4), Fla. Stat. (2009). committed multiple predicate 57. As alleged herein, ROTHSTEIN and EDWARDS including violations of Florida acts in violation of §772.103(1), (2), (3) and (4), Fla. Stat., s; Chapter 817, relating to Statutes - Chapter 517, relating to securities transaction (which indudesill.); Chapter fraudulent practices, false pretenses, and fraud generally h includes11.); and Chapter 831, relating to forgery; §836.05, relating to extortion (whic 837, relating to perjury (which includes ■.). Substantially more than two predicate fabricated settlements outlined acts (i.e., the selling of or participation of the sale of well as the improper litigation herein, including the Civil Actions involving Epstein as d. tactics outlined above) occurred within a five-year time perio N, EDWARDS and 58. As a direct and proximate result of ROTHSTEI d. violations of §772:103, Ha. Stat., EPSTEIN has been injure EIN is entitled to threefold of 59. Pursuant to §772.104(1), Ha. Stat., Plaintiff EPST fees and court costs, and such his actual damages sustained, reasonable attorney's other damages as allowed by law. the entry of a judgment for WHEREFORE, Plaintiff EPSTEIN respectfully demands damages against all the named Defendants. Count II — Florida RICO - "Racketeer Influenced and Corrupt Organization Act" Pursuant to 44895.01, et seq.. Fla. Stat. (20091, Against All Defendants EFTA00223298 Epstein RRA, et al. Page 32 60. Plaintiff realleges and incorporates paragraphs 1 through 53 as if fully set forth herein. 61. RRA, along with ROTHSTEIN, EDWARDS and ■., each and collectively, constitute an enterprise pursuant to §895.02(3), Fla. Stat. (2009). 62. During all times relevant hereto, ROTHSTEIN, EDWARDS and ■. were and are associated with the enterprise, RRA, and each other. 63. Defendants, ROTHSTEIN, EDWARDS and ■., as persons associated with the enterprise, RRA and each other (as an enterprise); unlawfully conducted or participated, directly or indirectly, in such an enterprise through a pattern of racketeering, § 895.03(3), Fla. Stat., as alleged above herein. 64. The breadth and scope of ROTHSTEIN, EDWARDS and, potentially, ■.'s racketeering activity continues to be investigated by the FBI, as numerous civil lawsuits against some of the Defendants and others continue to be filed by persons who have been damaged. As of the filing of this Complaint, criminal charges have only been brought against ROTHSTEIN. 65. Substantially more than two predicate acts (i.e., the selling of fabricated settlements outlined herein, including the Civil Actions involving Epstein as well as the improper litigation tactics outlined above) occurred within a five year time period. 66. Pursuant to §895.02, Fla. Stat., ROTHSTEIN and EDWARDS engaged in a pattern of "racketeering activity" through the commission of crimes as defined In § 895.02(1)(a)-(b), Fla. Stat., including Chapter 517, relating to securities; Chapter 817, relating to fraudulent practices, false pretenses, and fraud (including ■.) generally; EFTA00223299 Epstein'. RRA, et al. Page 33 extortion (including..); Chapter Chapter 813, relating to forgery; §836.05, relating to 837, relating to perjury (includingill.). the following relief against 67. Pursuant to §895.05, Fla. Stat., Plaintiff seeks Defendants, ROTHSTEIN, EDWARDS ands.: selves of a) Ordering ROTHSTEIN and EDWARDS to divest them any interest in the enterprise, RRA; of conduct b) Enjoin all Defendants from engaging in the same type and activities as described herein; and from c) Temporarily enjoining ROTHSTEIN, EDWARDS and EIN the continuation of the Civil Actions brought against EPST RRA until criminal charges have been formally brought against be and/or any of the Defendants, such that EPSTEIN may allowed to evaluate whether a stay or dismissal of all Civil Actions against him is merited. attorney's fees and costs, 68. EPSTEIN further seeks an award of his reasonable and such other relief that this Court deems appropriate. of a judgment for WHEREFORE, Plaintiff EPSTEIN respectfully demands the entry . the relief sought and damages against the named Defendants Count III — Abuse of Process — Against All Defendants gh 53 as if fully set forth 69. Plaintiff realleges and incorporates paragraphs 1 throu herein. EFTA00223300 Epstein'. RRA, et al. Page 34 70. After instituting the Civil Actions against EPSTEIN, the actions of Defendants, ROTHSTEIN, EDWARDS and M. as alleged in paragraphs 9 through 53 herein, constitute an illegal, improper or perverted use of process. 71. ROTHSTEIN, EDWARDS and ■. possessed ulterior motives or purposes in exercising such illegal, improper, or perverted use of process. 72. As a result of ROTHSTEIN, EDWARDS and ■.'s actions, EPSTEIN suffered damageS. WHEREFORE, Plaintiff EPSTEIN respectfully demands the entry of a judgment for damages against all the named Defendants. Count IV — Fraud Against All Defendants 73. Plaintiff realleges and incorporates paragraphs 1 through 53 as if fully set forth herein. 74. ROTHSTEIN, by and through Defendant EDWARDS and made false statements of fact to EPSTEIN and his attorneys and agents, known to be false at the time made, and/or intentionally concealed material information from EPSTEIN and his attorneys and agents, for the purpose of inducing EPSTEIN to act in reliance thereon. 75. EPSTEIN did so act on the misrepresentation and/or concealment by incurring additional attorney's fees, costs, and expenses in aggressively defending the civil actions whereas in reality, because the Civil Actions against Plaintiff were being exploited and over-valued so as to lure additional investors and to attempt to extort as much money as possible from EPSTEIN so as to continue the massive fraud. EFTA00223301 Epstein'. IRRA, et al. Page 35 against Defendants for WHEREFORE Plaintiff EPSTEIN demands judgment entitled under the law. damages incurred and for any other relief to which he is Conspiracy to Commit Fraud Against All Defendants 53, and 74 and 75 as if 76. Plaintiff realleges and incorporates paragraphs 1 through fully set forth herein. it a fraud upon EPSTEIN. 77. ROTHSTEIN, EDWARDS andll. conspired to comm through concerted action 78. ROTHSTEIN, EDWARDS and.. combined by and accomplish some pumpse by as detailed herein to accomplish an unlawful purpose or things, the orchestrating and unlawful means. The unlawful purpose was, among other receipt of monies for the continuation of the massive fraudulent Ponzi scheme and but is not limited to, the use continuation of the scheme. The unlawful means includes, fraudulent manner. of the Civil Actions against EPSTEIN In an unlawful, improper, and ARDS and M.'s 79. As a direct and proximate result of ROTHSTEIN, EDW conspiracy to defraud EPSTEIN, EPSTEIN suffered damages. against Defendants for WHEREFORE Plaintiff EPSTEIN demands judgment under the law. damages incurred and for any other relief to which he is entitled Jury Trial Plaintiff demands Jury Trial on all issues so triable. By: ROBERT p. CRITTON, JR., ESQ. Florida r No. 224162 EFTA00223302 Epstein J RRA, et al. Page 36 MICHAEL J SQ. BURMAN, CRITTON, LUTTIER & COLEMAN 303 Banyan Blvd., Suite 400 h, FL 33401 Fax: (Attorneys for Plaintiff) EFTA00223303 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 1 of 36 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO9 legi 60331 CR - COHN lviAPISTRATS 18 U.S.C. §1962(d) Maga 18 U.S.C. §1956(h) 18 U.S.C. §1349 18 U.S.C. §1343 18 U.S.C. § 2 18 U.S.C. §1963 18 U.S.C. §982(a)(1) 18 U.S.C. §981(a)(1XC) UNITED STATES OF AMERICA, FILED by D.C. Plaintiff, DEC 0 1 2009i STEVEN M. LARIMORE CLERK U. S. DIST. CT. S. D. of FI. . - FT. LAUD. SCOTT W. ROTHSTEIN, Defendant. INFORMATION relevant to this Information: The United States Attorney charges that, at all times GENERAL ALLEGATIONS law in Florida. Defendant 1. Scott W. Rothstein was an attorney admitted to practice an of Rothstein, Rosenfeldt and Adler, Rothstein was the Chief Executive Officer (CEO) and Chairm P.A. offices located at 401 East 2. Rothstein, Rosenfeldt and Adler, P.A. was a law firm with elsewhere. The law fi rm employed approximately Las Olas Boulevard, Fort Lauderdale, Florida and e of law involving a wide range of specialties, . seventy (70) attorneys and engaged in the practic including labor and employment law. EXHIBIT 7M (ArAP:'11(‘'.-EY essuilLtac EFTA00223304 36 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12101/2009 Page 2 of COUNT 1 (Racketeerin g Consp iracy, 18 U.S.C. §1962(d)) orporated 1. The General Allegations of this Information are realleged and expresslyinc herein as if set forth in full. THE ENTERPRISE referred to as RRA) 2. The law firm, Rothstein, Rosenfeldt and Adler, Y.A. (hereinafter Florida and constituted an Enterprise as was a legal entity organized under the laws of the State of n 1961(4). The Enterprise engaged in, that term is defined in Title 18, United States Cod; Sectio n commerce. and the activities of which affected, interstate and foreig THE RACKETEERING CONSPIRACY November 2009, in the 3. From in or about 2005 and continuing through in or about ant, Southern District of Florida and elsewhere, the defend SCOTT W. ROTHSTEIN, rise degrribed above, which was engaged being a person employed by and associated with the Enterp n commerce, did knowingly combine, in, and the activities of which affected, interstate and foreig unknown to the United States Attorney, conspire, confederate, and agree, with persons known and c); that is, to conduct and participate, directly to violate Title 18, United States Code, Section 1962( Enterprise through a pattern of racketeering activity and indirectly, in the conduct of the affairs of the Sections 1961(1) and (5), as set forth herein as that term is defined in Title 18, United States Code, below at paragraph 4. 2 EFTA00223305 e 3 of 36 Entered on FLSD Docket 12/01/2009 Pag Case 0:09-cr-60331-JIC Document 1 Y THE PATTERN OF RACKETEERING ACTIVIT ned in Title 18, United States Code, 4. The pattern of racketeering activity as defi to ch the defendant and his co-conspirators agreed Sections 1961(1) and 1961(5), through whi rprise y, in the conduct of the affairs of the Ente conduct and participate, directly and indirectl the laws of the United States, namely: consisted of multiple acts indictable under (mail fraud); i. Title 18, United States Code, Section 1341 3 (wire fraud); ii. Title 18, United States Code, Section 134 6(a)(1) (laundering of monetary iii. Title 18, United States Code, Section 195 instruments); ion 1957 (eng aging in monetary iv. Title 18, United States Code, Sect transactions); and 1956(h) (conspiracy to laun der 1. Title 18, United States Code, Section etary transactions. monetary instruments and engage in mon THE RACKETEERING ACTIVITY THE PURPOSE AND OBJECT OF conspiracy was to generate money for the 5. The principal purpose of the racketeering through various ugh the operation of the Enterprise and defendant and his co-conspirators thro wire fraud, and money laundering. criminal activities, including mail fraud, agreed to engage in a pattern of racketeering 6. The defendant and his co-conspirators also utilized other the offices of RRA. The conspirators activity through its base of operation at his co- Enterprise. RRA was utilized by the defendant and locations to further the objectives of the fraud in connection oximately $1.2 billion from investors by conspirators to unlawfully obtain appr investors' funds ly known as a "Ponzi" scheme, in which new with an investment scheme common 3 EFTA00223306 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 4 of 36 legitimate investment arc utilized to pay previous investors in the absence of any underlying security, vehicle or other commodity. THE ROLES AND RESPONSIBILITIES OF THE CONSPIRATORS 7. The roles of the conspirators were as follows: and CEO of RRA. A. Defendant SCOTT W. ROTHSTEIN was a shareholder, Chairman managed, and supervised the Through his position at RRA, defendant ROTHSTEIN promoted, ors through the use of false administration of the Enterprise by fraudulently inducing invest purported borrowers based upon statements, documents, and computer records to (1) loan money to invest funds based upon anticipated fraudulent promissory notes and fictitious bridge loans, and (2) had been reached between and pay-outs from purported confidential settlement agreements which ent agreements were falsely presented among certain individuals and business entities. These settlem and putative defendants based upon as having been reached between putative plaintiffs in civil cases whistle-blower cases. the forbearance of civil claims in sexual harassment and/or Attorney, agreed with B. Other conspirators, known and unknown to the United States s-to further the operation and success one another and with defendant ROTHS1ON to take action investments to potential investors as of the "Ponzi" scheme, including presenting the aforesaid fraudulently inducing investors to place legitimate investment vehicles, when in fact they were not; • ' ; funds into these investment vehicles by making material misstatements of facts as set forth below ent funds existed to pay returns on these assuring potential investors and investors that suffici g, and transferring funds into and from, investments, when in fact such funds did not exist; creatin further the unlawful scheme; and realizing various accounts at financial institutions in order to 4 EFTA00223307 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12101/2009 Page 5 of 36 y generated as profits from the operation of the Ponzi scheme through the acquisition of mone property. proceeds from the scheme and through the acquisition of real and personal MANNER AND MEANS OF THE RACKETEERING CONSPIRACY would 8. It was part of the conspiracy that the defendant agreed that a conspirator affairs of the Enterprise. commit at least two acts of racketeering activity in the conduct of the criminal conduct 9. Defendant ROTHSTEIN and other co-conspirators initiated the elves and to supplement the alleged in the instant Information in order to personally enrich thems income and sustain the daily operation of RRA. solicited investors 10. Defendant ROTHSTEIN and other co-conspirators fraudulently and from purported clients of RRA. to loan money based upon promissory notes and bridge loans to requested short-term financing for Defendant ROTHSTEIN falsely alleged that clients of RRA d that the purported clients were undisclosed business deals. Defendant ROTHSTEIN falsely allege ROTHSTEIN. In fact, defendant willing to pay highrates of return on loans negotiated by Defendant for business financing actually existed. ROTHSTEIN was aware that no such clients or requests ipated in an investment 11. Defendant ROTHSTEIN and other co-conspirators partic i" scheme involved the sale of purported scheme commonly known as a "Ponzi" scheme. The "Ponz r whistl e-blower cases. The potential confidential settlement agreements in sexual harassment and/o co-conspirators that confidential settlement investors were told by defendant ROTHSTEIN and other rted settlements were allegedly available in agreements were available for purchase. The purpo millions of dollars and could be purchased amounts ranging from hundreds ofthousands of dollars to over time, at a discount and repaid to the investors at face value 5 EFTA00223308 e 6 of 36 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12101/2009 Pag irators utilized the offices of RRA and 12. Defendant ROTHSTEIN and other co-consp of potential investors of the legitimacy and success the offices of other co-conspirators to convince of the purported investment opportunity. the law firm, which enhanced the credibility irators made false and misleading 13. Defendant ROTHSTEIN and other co-consp into ded to fraudulently induce potential investors statements and omissions which were inten purchasing the confidential settlements. irators made the following fraudulent 14. Defendant ROTHSTEIN and other co-consp d ements: r to induce them to purchase the purporte settl representations to potential investors in orde ly confidential in order to protect the A. That the purported settlements were high the settlement and the executives reputation of the company authorizing involved; al harassment and/or whistle-blower B. That the plaintiffs in the purported sexu in order to avoid the emotional cases preferred to settle the cases public forum; embarrassment of pursuing a claim in a reputation, internal staff and outside C. That RRA originated its own cases from referrals from other law firms; ed intcrnet sites and well-placed D. That RRA retained a company that own a large volume of high quality cases; "800" numbers designed to attract or purported sexual harassment and/ E. That RRA rigorously screened the nts; whistle-blower settlement agreeme 6 EFTA00223309 9 Page 7 of 36 1 Entered on FLSD Docket 12/01/200 Case 0:09-cr-60331-JIC Document ement personnel and employed highly F. That RRA utilized former law enforc inst ds in selecting and pursuing claims aga sophisticated investigative metho purported defendants; ant d purported settlements with defend G. That RRA or other law firms pursue litigation; companies prior to the initiation of defendant negotiated with the purported It That RRA or other law firms s made aware of the alleged claim by the company after such company wa plaintiff; endant pur portedly negotiated with the def I. That RRA or other law firms ent amount ent which contained the settlem company and reached an agreem and the payment terms; of lements occurred prior to the initiation J. That because the purported sett ed in the or governmental entity involv litigation, there was no court transaction; RRA or othei panies sent by wire transfer to K. That the alleged defendant com s; procee ds of the purported settlement law firms' trust accounts the full negotiations when conference or other settlement That during the settlement other the extend ed payment schedule, RRA or a purported plaintiff protested of receiving a ted plaintiff with the option law firms presented the purpor ding source; from an unrelated confidential fun discounted lump sum payment nt of spirators prepar ed a purported Assignme M. That RRA or other co-con right to the the investor agreed to acquire the Settlement Agreement in which EFTA00223310 e 8 of 36 Case 0:09-cr-60331-JIC Document 1 Entered on Fl_SD Docket 12/01/2009 Pag ed lump sum payment made to purported settlement payments for a discount the purported plaintiff; by the investor it immediately N. That when RRA received the payment ntiff; and disbursed those funds to the purported plai uant to the purported payment O. \ That RRA made payment to the investor purs ement agreement. schedule set forth in the purported settl onspirators false ly informed potential 15. Defendant ROTHSTEIN and other co-c of the individual designated trust accounts for the benefit investors that funds were maintained in n, by two ied on a regular basis, weekly if not more ofte investor and that these funds were verif pendent fi nancial g an attorney and the other being an inde independent verification sources, one bein dent verifiers"). advisor (hereinafter referred to "indepen potential r co-conspirators falsely informed 16. Defendant ROTHSTEIN and othe national banking maintained with a well established inter investors that RRA's trust accounts were and that access to s and regulations of the Florida Bar, institution, in accordance with the rule verifiers. edly mon itored by one of the two independent balances in the trust accounts was alleg ntial co-conspirators falsely informed pote 17. Defendant ROTHSTEIN and other s: undertaken with the following provision investors that due diligence would be nt permitted to ask questions of Defenda A. An "independent verifier" would be rs to review the opportunity and ROTHSTEIN and/or other co-conspirato structure; ew have the opportunity to randomly revi B. The "independent verifier" would tion; confirm the veracity of the informa selected completed transactions to 8 EFTA00223311 ge 9 of 36 Entered on FLSD Docket 12/01/2009 Pa Case 0:09-cr-60331-JIC Document 1 s, ady reviewed current transaction C. The "independent verifier" had alre to m defendants and payments made including wire transfers received fro plaintiffs; speak have the opportunity to visit and D. The "independent verifier" would tion to the local branch of the financial institu with a senior banking officer at s bank bal ances through bank statement confirm current trust account provided on line; and banking opportunity to meet with a senior E. The "independent verifier" had the to ver ify the accounts were "locked" and officer to verify that the trust the bank. position and relationship with strength of RRA's financial erous trust other co-conspirators established num IS. Defendant ROTHSTEIN and acy er to convince potential and current investors of the legitim accoun ts in the name of RRA in ord such investments. agreements and the security of of the confidential settlement red bank other co-conspi rators prepared and used alte 19. Defendant ROTHSTEIN and ncial institution, to ly issu ed fro m a wel l-es tablished international fina statements, purported purported and cur ren t inv esto rs tha t fun ds bad been received from the fraudulently convince potential maintained in trust accounts. defendant companies and were co-conspirators dec eiv e inv esto rs, def end ant ROTHSTEIN and other 20. In order to t us onl ine ban kin g info rma tion regarding the purported trus ined fictitio created, altered and/or mainta the receipt of ect ed the am oun t of fun ds maintained in such accounts, accounts which falsely refl the ant com pan ies and the tran smission of funds by wire to defend funds wired from the alleged alleged plaintiffs, 9 EFTA00223312 ge 10 of 36 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Pa fictitious co-conspirators created false and 2l. Defendant ROTHSTEIN and other ents and l settlement agreement s, assignment of settlement agreem documents, including confidentia THSTEIN, among ents, and personal guaranties by Defendant RO proceeds, sale and transfer agreem other documents. movement and er co-conspirators facilitated the 22. Defendant ROTHSTEIN and oth in order to ong numerous trust accounts and operating accounts transfer of funds between and am ilable vem ent and tran sfe r of suc h fun ds insured that monies were ava perpetuate the scheme. The mo ments to investors. in order to make scheduled pay in the individual trust accounts to current TH ST EIN and oth er co- con spirators made false statements 23. Defendant RO fidential settlement to con vin ce the m to re- inv est in additional purported con investors in order agreements. ation of false and er co-conspirators facilitated the cre 24. Defendant ROTHSTEIN and oth trust financial institution where the re issued by an executive at the fictitious "lock letters" which we ected that the funds oun ts we re ma inta ine d. Suc h "lock letters" falsely refl and operating acc cific investors. d in spe cifi c trus t acc oun ts would only be disbursed to spe maintaine funds received from fen dan t RO TH ST EIN and other co-conspirators utilized 25. De estors. rs to pay the pro mis ed "re tur n on investment" to earlier inv investo ted a EIN and oth er co- con spi rato rs also initiated and conduc 26. Defendant ROTHST h clients had of RR A in ord er to per pet uat e the "Ponzi" scheme. Suc scheme to defraud clients lawsttit civ il law sui t. Un kno wn to the clients, RRA settled the file a retained RRA to institute and fraud and deceive to pay $50 0,0 00 to the def endant. In order to commit the and obligated the clients ent court and oth er co- con spi rato rs created a false and fraudul STEIN the clients, defendant ROTH 10 EFTA00223313 9 Page 11 of 36 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/200 t the clients had l District Court Judge which falsely alleged tha order purportedly signed by a Federa ent re owed a judgement of approx imately $23 million. The fraudul prevailed in the lawsuit and we nds in order t the defendant had transferred funds to the Cayman Isla court order also falsely stated tha to avoid paying the judgement. ised the clients on other co-conspirators falsely adv 27. Defendant ROTHSTEIN and to be held er to rec ove r the def end ant 's funds, they had to post bonds several occasions that in ord rators fraudulently caused st acc oun t. De fen dan t RO THSTEIN and other co-conspi in the RRA tru ount controlled r app rox ima tely $57 mil lion over several years to a trust acc the clients to wire transfe portedly to satisfy the bonds. by defendant ROTHSTEIN, pur transmitted by RO TH ST EIN and oth er co- conspirators caused the funds 28. Defendant eme RR A tru st acc oun ts in ord er to perpetuate the "Ponzi" sch other the clients to be transferred to h the Enterprise. to enr ich tho se co- con spi rators who were associated wit and nts as EIN and oth er co- con spi rato rs were questioned by the clie 29. Defendant ROTH ST clients, defendant alle ged law sui t. In ord er to delay the return of funds to the to the progress of the ited States ate d a fals e Fed era l cou rt ord er purportedly issued by a Un ROTHSTEIN fraudulently cre later date. ged ly ord erin g RR A to retu rn the transmitted funds by a Magistrate Judge alle through ST EIN and oth er co- con spi rators utilized funds obtained 30. Defendant ROTH to expand RRA sup ple me nt and sup por t the operation and activities of RRA, the "Ponzi" scheme to acquire ys and sup por t staf f, to fun d salaries and bonuses, and to rne by the hiring of additional atto the personal wealth of ela bor ate off ice spa ce and equipment in order to enrich larger and more ociated with the Enterprise. persons employed by and ass 11 EFTA00223314 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 12 of 36 ained er co-conspi rators utilized funds illegally obt 31. Defendant ROTHSTEIN and oth federal political nzi " sch em e to ma ke pol itic al contributions to local, state and through the "Po vent state des ign ed to con cea l the tru e sou rce of such funds and to circum candidates, in a manner h funds. itations and contribution of suc and federal laws governing the lim ns in order t RO TH ST EIN and oth er co- conspirators used other corporatio 32. Defendan of the funds utilized cee ds gen era ted fro m the "Po nzi" scheme to conceal the source to launder pro " scheme. in order to promote the "Ponzi to make political contributions uses to employees fen dan t RO TII ST EIN and oth er co-conspirators paid large bon 33. De uses, the aw ard for exe mp lary wo rk. Prior to the receipt of the bon of RRA purportedly as an ates in the employees' ins truc ted to ma ke larg e con tributions to political candid employees were and to illegally des ign ed to con cea l the tru e source of the contribution names. Such conduct was laws, ' circumvent campaign finance gifts including er co- conspirators distributed lavish 34. Defendant ROTHSTEIN and oth of RRA in order to ns, cash and bon uses to individuals and members exotic cars, jewelry, boats, loa cessful law firm. and to create the appearance of a suc engender goodwill and loyalty ritable ST EIN -an d oth er co- con spirators made large cha 35. Defendant ROTH other legitimate and pri vat e cha rita ble ins titutions, including hospitals and contributions to public "Ponzi" scheme. and non pro fit org ani zat ion s using funds derived from the charitable illegally obtained fen dan t RO TH ST EIN and oth er co-conspirators utilized funds 36. De provide to hir e me mb ers of loc al pol ice departments purportedly to through the "Ponzi" scheme " scheme funds were and def end ant RO TH ST EIN 's personal residence. "Ponzi security for RRA ry favor hig h ran kin g me mb ers of police agencies in order to cur to also used to provide gratuities 12 EFTA00223315 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 13 of 36 rcement scrutiny of the activities of RRA and with such police personnel and to deflect law enfo defendant ROTHSTEIN. rs utilized funds obtained through 37. Defendant ROTHSTEIN and other co-conspirato n ng interests in restaurants located in the Souther the "Ponzi" scheme in order to purchase controlli used in part as a mechanism to give gratuities to District of Florida. Such restaurants were will and associates and attorneys, in order to foster good individuals, including politicians, business l meetings. stors and as a secure location for conspiratoria loyalty, as a location to solicit potential inve onspirators associated with affluent and 38. Defendant ROTHSTEIN and other co-c scheme. to lure wealthy investors into the "Ponzi" politically connected individuals in order irafors associated with well known sports 39. Defendant ROTHSTEIN and other co-consp to and elsewhe re, in order to gain greater notoriety and figures and politicians, in public forums in part to enha nce legitimacy. Such acts were calculated create the appearance of wealth and it potential investors in the "Ponzi" scheme. defendant ROTHSTEIN's ability to solic the onspirators used funds derived from 40. Defendant ROTHSTEIN and other co-c nsive real ce of affluence and wealth, by purchasing expe "Ponzi" scheme to maintain the appearan and of the potential investors of the legitimacy of RRA and personal property, in order to convince real property, ndan t ROTHSTEIN purchased expensive purported investment opportunities. Defe ess and wealth. els, vehicles and other indicia of succ personal property, business interests, vess States Code, Section 1962(d). All in violation of Title 18, United 13 EFTA00223316 9 Page 14 of 36 1 Entered on FLSD Docket 12/01/200 Case 0:09-cr-60331-JIC Document COUNT 2 U.S.C. §1956(h)) . (Money Laundering nspiracy, 18 Co Information aphs 5 through 40 of Count 1 of the 1. The General Allegations and paragr ein by reference. are realleged and incorporated her rcial bank with rred to as TD Bank) was a comme 2. 113 Bank, N.A., (hereinafter refe cutive es, including a branch office in Weston, Florida. The exe branch offices in thirteen (13) stat Hill; New Jersey. Defendant d in Portland, Maine and Cherry offices of TI) Bank were locate at T13 Bank, ined approximately thirty-eight (38) bank accounts ROTHSTEIN and RRA mainta course of the "Ponzi" scheme. which were utilized during the Bank) was a (he reinafter referred to as Gibraltar 3. Gibraltar Private Bank and Trust dale, (7) bra nch off ice s, inc lud ing a branch office in Fort Lauder commercial bank with seven ounts at Gibraltar t RO TH ST EIN and RR A ma intained at least four (4) bank acc Florida. Defendan e. the course of the "Ponzi" schem Bank, which were utilized during ut November 2009, m in or abo ut 200 5 and con tinuing thereafter through in or abo 4. Fro ere, the defendant, rd Co unt y, in the Sou the rn District of Florida and elsewh in Browa SCOTT W. ROTHSTEIN, United s known and unknown to the erate, and agree with person did knowingly conspire, confed le 18, United States es against the Un ited States in violation of Tit States Attorney, to commit offens 7, that is: Code, Sections 1956 and I95 transactions attempt to conduct financial i. to knowingly conduct and ds of a specified rsta te and for eig n com me rce, which involved the procee United affecting inte wir e fraud, in violation of Title 18, tha t is, ma il frau d and of unlawful activity, wit h the inte nt to promote the carrying on 1 and 134 3, States Code, Sections 134 and that while conducting and attempting to ed unl aw ful act ivit ies, in the financial said specifi w that the property involved fina nci al tran sac tion s kne conduct such 14 EFTA00223317 9 Page 15 of 36 1 Entered on FLSD Docket 12/01/200 Case 0:09-cr-60331-JIC Document y in violation tion rep res ent ed the pro cee ds of some form of unlawful activit transac tion 1956(a)(1XA)(i); of Title 18, United States Code, Sec tions mpt to conduct financial transac ii. to knowingly conduct and atte ns inv olv ed ing inte rsta te com me rce and for eign commerce, which trarsactio d, in affect y, that is, mail fraud and wire frau of spe cifi ed unl aw ful act ivit the proceeds knowing that the Code, Sections 1341 and 1343, violation of Title 18, United States guise the nature, sac tion s we re des ign ed in whole or in part to conceal and dis ed unlawful tran rce , ow ner shi p, and con trol of the proceeds of specifi location, sou financial tha t wh ile con duc ting and attempting to conduct such activity, and tions represented ty involved in the fi nancial transac transactions, knew that the proper le 18, United States pro cee ds of som e for m of unl awful activity, in violation of Tit the and Code, Section 1956(a)(I)(B)(i); transactions by, attempt to engage, in monetary iii. to knowingly engage and foreig commerce, in n h or to a fina nci al ins titu tion, affecting interstate and perty having throug greater than $10,000, which pro der ive d pro per ty of a val ue e fraud, criminally m a spe cifi ed unl aw ful act ivit y, that is, mail fraud and wir been derived fro of Un ited Sta tes Co de, Sec tion s 1341 and 1343, in violation in violation of Title 18, - Section 1957. Title 18, United States Code, 1956(h). United States Code, Section All in violation of Title 18, COUNT 3 (Mail and Wi re Fra ud Conspiracy, 18 U.S.C. §1349) the Information paragraph s 5 through 40 of Count 1 of 1. The General Allegations and herein by reference. are realleged and incorporated November 2009, tinuing thereafter through in or about 2. From in or about 2005 and con defendant, Southern Distric t of Florida and elsewhere, the in Broward County, in the SCOTT W. ROTHST'BIN, nown federate, and agree with oth er persons known and unk did knowin gly combine, conspire, con lation of Title 18, to commit offenses aga inst the United States in vio to the.United States Attorney s 1341 and 1343, that is: United States Code, Section 15 EFTA00223318 9 Page 16 of 36 1 Entered on FLSD Docket 12/01/200 Case 0:09-cr-60331-JIC Document ise a defraud devise and intend to dev i. to knowingly and with intent to fro m oth ers by to obtain money and property scheme and artifice to defraud and pro mis es, ent pretenses, representations, and means of materially false and fraudul delivered g tha t the y we re fals e and frau dulent when made, and causing to be knowin , according to the and commercial interstate carrier certain mail matter by any private lati on of Title 18, e of executing the scheme, in vio directions thereon, for the purpos United States Code, Section 1341 devise a to kno win gly and wit h inte nt to defraud devise and intend to ii. ty from others by and to obtain money and proper scheme and artifice to defraud ations, and promises, of ma teri ally fals e and fraudulent pretenses, represent me ans smitting and g tha t the y we re fals e and fraudulent when made, and tran eign knowin sm itte d by me ans of wir e com munications in interstate and for causing to be tran e of executing the s and sounds, for the purpos commerce, certain signs, signal 3. United States Code, Section 134 scheme, in violation of Title 18, T OF THE CONSPIRACY THE PURPOSE AND OBJEC EIN-and obj ect of the con spi rac y wa s to enrich defendant ROTHST 3. The purpose and investors' money ille gal ly obt ain ing mo ney fro m investors and converting the his co-conspirators by ed "Ponzi" scheme. n use and ben efit thro ugh the operation of the above-describ to their ow 9. ited States Code, Section 134 MI in violation of Title 18, Un COUNTS 4 and 5 (Wire Fraud, 18 U.S.C. §1343) the Information paragraph s 5 through 40 of Count 1 of 1. The General Allegations and herein by reference. are realteged and incorporated rd and Miami- rated as to each count below, at Frowa 2. On or about the dates enume endant, rn District of Florida, and elsewhere, the def Dade Counties, in the Southe SCOTT W. ROTHSTEIN, defraud raud devise and intend to devise a scheme and artifice to did knowingly and with intent to def fraudulent pretenses, ty from others by me ans of materially false and and to obtain money and proper 16 EFTA00223319 Page 17 of 36 Case 0:09-cr-60331-J1C Document 1 Entered on FLSD Docket 12/01/2009 es were false wing that such pre tenses, representations, and promis representations, and promises, kno to the purpose of executing the scheme, transmitted and caused and fraudulent when made, and for as more particularly nications in interstate and foreign commerce, be transmitted certain wire commu described below: DATE WIRE COMMUNICATION COUNT TI) Bank to December 2, 2008 Interstate wire transfer sent from 4 Gibraltar Bank TD Bank from JP October 16, 2009 Interstate wire transfer sent to 5 Morgan Chase 2. ited Sta tes Code, Sections 1343 and All in violation of Title 18, Un NS FORFEITURE ALLEGATIO y ormation arc realleg ed and by this reference full 1. The allegations of this Inf erica of certain e of alleging forfeit ures to the United States of Am incorporated herein for the purpos les of an interest pursuant to 7(c )(2) and 32.2(a), Federal Ru property in which the defendant has le 18, United States is being sought pur suant to the provisions of Tit Criminal Procedure. Forfeiture ited app licable hereto by Title 28, Un (a) and 981(a)(1)(C), as made Code, Sections 1963(a), 982 States Code, Section 2461. the e of RICO Consp iracy set forth in Count 1 of 2. Upon conviction of the offens shall for feit to the United States the SCOTT W. ROTHSTEIN, Information, the defendant, following property: 2; mainta ined pursuant to Section 196 i. Any interest acquired or property or y of, claim against, or ii. Any interest in, securit r, the afford ing a source of influence ove contractual rights of any kind 17 EFTA00223320 Case 0:119-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 18 of 36 h was established, enterprise described in the Information whic Title 18, United States operated, controlled and conducted pursuant to Code, Section 1962; and proceeds obtained iii. Any property constituting or derived from ity pursuant to Title 18, directly and indirectly from racketeering activ United States Code, Section 1962. Laundering Conspiracy set forth in Count 3. Upon conviction of the offense of Money ted States all W. ROTHSTEIN, shall forfeit to the Uni 2 of the Information, the defendant, SCOTT traceable to the offense which property shall include: property, real or personal, involved in or was the subject of each i. all money and other property that and transfer in violation of transaction, transportation, transmission Section 1956(h); erty constituting proceeds obtained ii. all commissions, fees and other prop as a result of those violations; and to commit and to facilitate the all property used in any manner and part commission of those violations. d cy to Commit Mail Fraud and Wire Frau 4. Upon conviction of the offense of Conspira ndant, in Counts 3, 4, and 5 of the Information, the defe and to Commit.Wire Fraud as set forth personal, which the United States, all property, real or SCOTT W. ROTHSTEIN, shall forfeit to eable to the offense. constitutes or is derived from proceeds trac to Title 18, United States Code, Sections 5. The property subject to forfeiture, pursuant but is not limited to: 1963, 982(a)(1) and 981(a)(1)(C), includes 18 EFTA00223321 19 of 36 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 00 in United States currency. A. A sum of money equal to $1,200,000,0 B. Real Properties ("RP"): dale, Florida, her eafter also referred to as "Defendant (RI'l) 2307 Castilla Isle, Fort Lauder easements ements, fixtures, attachments and RP1," includes all buildings, improv res re par ticularly described as Lauderdale Sho found therein or thereon, and is mo 13 0210; with a Folio Number of 5042 12 Reamen Plat 15-31 B Lot 2 Blk 5 efendant derdale, Florida , hereafter also referred to as "D (RP2) 2308 Castilla Isle, Fort Lau s and easements rovements, fixtures, attachment RP2," includes all buildings, imp Shores more particu larly described as: Lauderdale found therein or thereon, and is 0020; with a Folio Number of 5042 12 13 Reamen Plat 15-31 B Lot 2 Elk 4 efendant Lauderdale, Florida , hereafter also referred to as "D (P.23) 2316 Castilla Isle, Fort s rovements, fixtu res, attachments and easement R13," includes all buildings, imp dale Shores more particularly described as: Lauder found therein or thereon, and is I3 4 W 1/2 Blk 4 with a Folio Number of 5042 12 Reamen Plat 15-31 B Lot 3 & Lot 0030; nt t Lauderdale, Florida, hereaf ter also referred to as "Defenda (RP4) 30 Isla Bahia Drive, For easements improvem ents, fixtures, attachments and RP4," includes all buildings, 27 B is more particularl y described as: Isla Bahia 47- found therein or thereon, and of 5042 13 16 0640; Lot 63 with a Folio Number efendant t Lauderdale, Florida, hereafter also referred to as "D (RP5) 29 Isla Bahia Drive, For improvements, fixtures, attachments and easements RES," includes all buildings, 19 EFTA00223322 Case 0:09-cr-60331-JIC Document 1 Entered on F LSD Docket 12/01/2009 Page 20 of 36 rly described as: Isla Bahia 47-27 B found therein or thereon, and is more particula ; Lot 35 with a Folio Number of 5042 13 16 0360 derdale, Florida, hereafter also referred to as (RP6) 350 SE 2nd Street, Unit 2840, Fort Lau the condominium, improvements, "Defendant RP6," includes that portion of ein or thereon, and is more particularly fixtures, attachments and easements found ther t 2840 with a Folio Number of 5042 10 described as: 350 Las Olas Place Condo Uni AN 1490; rred to as Lauderdale, Florida, hereafter also refe (RP8) 2,133 Imperial Point Drive, Fort s, improvements, fixtures, attachments and "Defendant RP8," includes all building is more particularly described as: Imperial easements found therein or thereon, and a Folio Number of 4942 12 07 2020; Point 1 Sec 53-44 B Lot II Blk 22 with "Defendant ale, Florida, hereafter also referred to as (RP9) 2627 Castilla Isle, Fort Lauderd ments ments, fixtures, attachments and case RP9," includes all buildings, improve res particularly described as: Lauderdale Sho found therein or thereon, and is more 0380; with a Folio Number of 5042 12 13 Reamem Plat 15-31 B Lot 2213Ik 5 referred to as 110, Plantation, Florida, hereafter also (RP10)10630 NW 14°' Street, Apt nhome, portion of the condominiumhow "Defendant RPI0," includes that eon, and is and easements found therein or ther improvements, fixtures, attachments T 201 IMA VILLAGE 1-"C" CONDO UNI more particularly described as: OPT 31 AC 0110; BLDG 2 with a Folio Number of 4941 to as ale by the Sea, Florida, hereafter also referred (RP I I) 227 Garden Court, Lauderd ments, fixtures, portion of the buildings, improve "Defendant RP11," includes that 20 EFTA00223323 Case 0:09-cr-60331-JIC, Document 1 Entered on FLSD Docket 12/01/2009 Page 21 of 36 or thereon, and is more particularly attachments and easements found therein 9 B POR of Lot 4, BLK 5 DESC AS described as: SILVER SHORES UNIT A 28-3 37.75, S 79.37, E 35.75 TO PO13 TO BEG AT SE COR SAID LOT 4, N 79.37 W NHOMES 227GARDEN with a Folio AKA: UNIT E MARINA VILLAGE TOW Number of 4943 18 24 0050; to as 1, Hollywood, Florida, hereafter also referred (ItP12) 708 Spangler Boulevard, Bay s, improvements, fixtures, attachments and "Defendant RI312," includes all building more particularly described as: HARBOR easements found therein or thereon, and is NE & 2 BLK 2 DESC AS COMM 25 S OF VIEW 10-5 B PORTION OF LOTS 1 , S/RJW/L OF ST RD 84, S 15.72 TO POB COR OF LOT 2 ON E/L, W 20.52 ALG POB 7.66, W 31.74, N 24.00, E 49.07 TO S 7.25, E 12:59, S 24.40, W 29.92, N Number of 5042 23 28 0010; AKA: BAY -1 PORTSIDE with a Folio referred to Fort Lauderdale, Florida, hereafter also (RP13) 1012 East Broward Boulevard, hments all buildings, improvements, fixtures, attac as "Defendant RP13," includes ribed as: thereon, and is more particularly desc and easements found therein or a Folio 1 W 100, LOT 2 W 100 BLK 17 with BEVERLY HEIGHTS 1-30 B LOT Number of 5042 11 07 0540; to as , Fort Lauderd ale, Florida, hereafter also referred (R.P14) 950 N Federal Highway hments and dings, improvements, fixtures, attac "Defendant RP14," includes all buil 8-43 and is more particularly described as: 314 easements found therein or thereon, a Folio E R/W/L ST RD 5, N TO POB with S 150 OD FOL DESC, BEG INTER Number of 4843 31 00 0401; 21 EFTA00223324 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12./01/2009 Page 22 of 36 Unit 2, Fort Lauderdale, Florida, hereafter also (RP15) 350 Las Olas Boulevard, Commercial des all portion of that condominium, referred to as "Defendant APIs," inclu easements found therein or thereon, and is improvements, fixtures, attachments and T OLAS PLACE COMM CONDO UNI more particularly described as: 350 LAS 0020; CU2 with a Folio Number of 5042 10 Al' ant RP16," ida hereafter also referred to as "Defend (RP16) 361 SE 9 Lane, Boca Raton, Flor fixtures, attachments and easements found includes all buildings, improvements, therein or thereon; referred to as , Boca Raton, Florida hereafter also (RP17) 1198 N Old Dixie Highway nts and s, improvements, fixtures, attachme "Defendant RP17," includes all building easements found therein or thereon; referred to as Boca Raton, Florida hereafter also (RP18) 1299 N Federal Highway, nts and s, improvements, fixtures, attachme "Defendant RP18," includes all building easements found therein or thereon; r also referred to 42D, New York, New York hereafte (RP19) 151 East 58 Street, Apartment rovements, portion of that condominium, imp as "Defendant RP19," includes all found therein or thereon; fixtures, attaelunents and easements also referred to as Narragansett, Rhode Island hereafter (RP20) 11 Bluff Hill Cove Farm, nts and ding s, improvements, fixtures, attachme "Defendant RP20," includes all buil easements found therein or thereon; 22 EFTA00223325 ge 23 of 36 Entered on FLSD Docket 12/01/2009 Pa Case 0:09-cr-60331-JIC Document 1 also referred to as 15 Blu ff Hil l Co ve Far m, Na rragansett, Rhode Island hereafter (RP2I) chments and ldings, improvements, fixtures, atta "Defendant RP2I ," includes all bui n; easements found therein or thereo nt Brooklyn, NY hereaf ter also referred to es "Defenda (RP22) 353 4 Ave., Unit 12-H, ents, fixtures, of that condominium, improvem RP22," includes all portion therein or thereon; attachments and easements found 23," includes , N Y hereafter also referred to as "Defendant RP (RP23) 290W 11th St 41C, NY ements improvement s, fixtures, attachments and eas all portion of that condominium, found therein or thereon; and rred to as on/ Ca sa Cas uar ina-10 % Ownership hereafter also refe (R1324) Versace Ma nsi es, attachments and buildings, improvements, fixtur "Defendant RP24," includes all reon; easements found therein or the C Vehicles and Vessels ("VV"): 087066; Coupe, VIM ZFFMN34A5L0 (VV1) 1990 Red Ferrari F40 ; nvertible, VIN: SCBDR33W29C059672 (VV2) 2009 White Bentley Co 788; Mercedes Benz SL R, VIN: WDDAK76F98M001 (VV3) 2008 Yellow McLaren A59223; Ford Exp edition, VIN: 1F1FK15557L (VV4) 2007 Black Limousine 63011; Spider, VIN: ZFFEW59A3801 (VV5) 2009 Red Ferrari 430 7UX23044; Co nvertible, VIN: SCA1L6855 (VV6) 2007 Silver Rolls Royce 5; , YIN: 137PI-184396E22066 (VV7) 2006 Silver Hummer HI 458; de, VIN: I GYEC63858R234 (VV8) 2008 Cadillac Escala 5; Corvette, VIN: 194677510474 (VV9) 1967 Red Convertible 23 EFTA00223326 ge 24 of 36 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Pa 28M795153; n EB 16.4, VIN: VE9SA25C (VVIO) 2009 Black Bugatti Veyro 28UX16071; e Drophead Co nvertible, VIN: SCA2D685 (VV/ 1)2008 Blue Rolls Royc ll # WAR87777B707; (VVI7) 2007 87' Warren, Hu XFA33R74G405; (VV18) 33' Aquariva, Hull # Ski, Hu114 YAMA3661I809; (VV19) 2009 11' Yamaha Jet , Hull 4 YAMA36261809; (VV20) 2009 11' Yamaha VS , Hull #YAMA2679G809; (VV21) 2009 11' Yamaha VS ; 0 Sundancer, SERY001899 (VV22) 1999 55' Sea Ray 54 ; and Ski, Hull # YAMA4288K809 (VV23) 2009 Yamaha Jet A03837. orghini 1p-670sv , VIN: ZHWBU8A1IXAL (VV 24) 20)0 White Lamb D. Tangibles ("T") about Monday, jew elr y, wa tch es, ne ck lac es and earrings seized on or of (T1) 304 pieces erly Rothstein; ve mb er 9, 20 09 fro m the residence of Scott and Kimb No 9, 2009 from the Lig hters sei zed on or about Monday, November nt (T2) 16 DuPo erly Rothstein; residence of Scott and Kimb er 9, 2009 from the s me mo rab ilia sei zed on or about Monday, Novemb (r3 ) 3 pieces sport erly Rothstein; residence of Scott and Kimb vember 9, 2009 currency sei zed on or about Monday, No (T4) $271,160 in United States and Kimberly Rothstein; from the residence of Scott sday, November 4, 2009, y, seized on about Wedne (T5) $1,50 0 in United States currenc senfeldt and . Rothstein at the law firm of Rothstein, Ro from the office of Scott W Adler, P.A.; 24 EFTA00223327 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 25 of 36 ed (T6) $30,000 in American Express Gift Cards to the attention of Scott Rothstein, obtain from UPS on or about November 12, 2009; obtained (T7) $50,000 in American Express Gift Cards to the attention of Scott Rothstein, from UPS on or about November 13, 2009; (T8) 5 additional watches being voluntarily turned over to the United States; and of Scott and (T9) Guitar collection of Scott W. Rothstein, located at the residence Kimberley Rothstein, valued between $10,000 and $20,000. E. Bank Accounts ("BA") W. Rothstein, valued at (BA1) Fidelity Investments Stock Account, in the name of Scott approximately $1,263,780; amount of $484,900.68; (BA2) Gibraltar Bank account 50010085, in the approximate amount of $53,448.51; (BA3) Gibraltar Bank account 50010093, in the approximate amount of $71,793.06; (BA4) Gibraltar Bank account 50012053, in the approximate e amount of $995,521.42; (HAS) Gibraltar Bank account 50015214, in the approximat e Populaire, Morocco, in the (BA6) Rank account 178780211819923220000187 at Banqu 00,000; name of Scott Rothstein, in the approximate amount of $12,0 the name of Almick Khalid, up to (BA7) Bank account at Banque Populaire, Morocco, in the amount of $2,000,000; name of Steve Caputi, up to the (BA8) Bank account at Banque Populaire, Morocco, in the amount of $1,000,000; 25 EFTA00223328 36 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 26 of 6860291266 in the name of Rothstein (BA9) Toronto Dominion Bank, N.A. account ember 11, 2009, contained the Rosenfeldt Adler, P.A. which, on or about Nov approximate amount of $54,021.27; 6861011556 in the name of Rothstein (BA10)Toronto Dominion Bank, N.A. account t November 11, 2009, contained the Rosenfeldt Adler, P.A. which, on or abou approximate amount of $10,085.00; unt 6860420923 in the name of Rothstein (33A11)Toronto Dominion Bank, N.A. acco ount 3, which, on or about November 11, ' Rosenfeldt Adler, P.A, Attorney Trust Acc $720,892.08; 2009, contained the approximate amount of ncial unt 6860422200 in the name of DJB fina (BA12)Toronto Dominion Bank, N.A. acco 2009, contained the approximate amount Holding, which, on or about November 11, of $64,970.00; unt 6860755757 the name of RRA Sports and (BA1 3)Toronto Dominion Bank, N.A. acco t November 11, 2009, contained the Entertainment LLC, which, on or abou approximate amount of $10,490.10; Goal Line unt 6860755781 in the name of RRA (BAl4)Toronto Dominion Bank, N.A. acco the t November 11, 2009, contained Management, LLC, which, on or abou approximate amount of $25,216.27; Rothstein . account 6861077714 in the name of (BA15)Toronto Dominion Bank, N.A d the about November 11, 2009, containe Rosenfeldt Adler, P.A., which, on or approximate amount of $20,080.00. 26 EFTA00223329 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 27 of 36 F. Business Interests ("BP') ficial inte rest in such shares, of 50,000 shares (311) Stock certificates, if issued, or the bene k & Trust, a federally chartered stock of capital stock, in Gibraltar Private Ban t September 2009 by GBPT, LLC, a savings association, purchased in or abou manager, Bahia Property Management, Delaware Limited Liability Company, by its ; pany, by its co-manager, Scott W. Rothstein LLC, a Delaware Limited Liability Com est in QTa sk; (BI2) Scott W. Rothstein's equity inter est in Broward Bank of Commerce; (313) Scott W. Rothstein's equity inter est in Bova Ristorante; (B14) Scott W. Rothstein's equity inter est in Bova Cucina; (B15) Scott W. Rothstein's equity inter est in Bova Primo; (BI6) Scott W. Rothstein's equity inter ida; est in Café Iguana, Pembroke Pines, Flor (BI7) Scott W. Rothstein's equity inter interest in Cart Shield USA, LLC; (1318) Scott W. Rothstein's equity interest in Renato Watches; (B19) Scott W. Rothstein's equity est in Edify LLC; (3110) Scott W. Rothstein's equity inter interest in, Georgio Vodka; (B111) Scott W. Rothstein's equity ty interest in Sea Club; (3112) Scott W. Rothstein's equi ty interest in North Star Mortgage; (B113) Scott W. Rothstein's equi interest in Kip Hunter Marketing; (BI14) Scott W. Rothstein's equity LLC; est in RRA Sports and Entertainment, (BI15) Scott W. Rothstein's equity inter Casuarina, including interest in Versace Mansion/Casa (13116) Scott W. Rothstein's equity 2 ten year options; 10 year Operating Agreement with 27 EFTA00223330 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 28 of 36 (BI17) Scott W. Rothstein's equity interest, and licensing rights, in Alternative Biofuel Company; (BI18) Scott W. Rothstein's equity interest in RRA Goal Linc Management; (BI19) Scott W. Rothstein's equity interest in Iron Street Management, LLC; (3120) Scott W. Rothstein's equity interest in, and loan to, Africat Equity 1O Decide; (BI21) Scott W. Rothstein's equity interest in, and rents derived from 1198 Dixie LLC; (3122) Scott W. Rothstein's equity interest in, and rents derived from 1299 Federal LLC; (3123) Promissory Note by Uniglobc in favor of Scott W. Rothstein; and (3124) All equity interest held by or on behalf of Scott W. Rothstein, in the following corporations and entities: a. 29 Bahia LLC; b. 235 CC LLC; c. 350 LOP//2840 LLC; d. 353 BR LLC; e. 10630 #11011C; f. 708 Spangler LLC; g. 1012 Broward LLC; h. 1198 Dixie LLC; I. 1299 Federal LLC; j. 2133 IP LLC; k. 15158 LLC; 1. AANG LLC; 28 EFTA00223331 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 29 of 36 in. AAMGI LLC; n. AAMM Holdings; o. ABT Investments LLC; p. Advanced Solutions; q. Bahia Property Management LLC; r. Boat Management LLC; s. BOSM Holdings LLC; t. BOVA Prime'LLC; u. BOVA Restaurant Group LLC; The BOVA Group LLC; w. BOVA Smoke LLC; x. BOVCU LLC; y. BOVRI LLC; z. Broward Financial Holdings, Inc.; aa. CI07 LLC; ab. CI08 LLC; ac. CII 6 LLC; ad. CI27 LLC; ae. CSU LLC; af. 13 & D Management & Investment LLC; ag. D & S Management and Investment LLC; ah. 13.1B Financial Holdings LLC; 29 EFTA00223332 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 30 of 36 ai. DYMMU LLC; aj. Full Circle Fort Lauderdale LLC; ak. Full Circle Trademark Holdings LLC; al. GHWI LLC; am. IDNL GEAII LLC; an. ILK3 LLC; ao. IS Management II,C; ap. JRCL LLC; aq. Judah LLC; ar. Kendall Sports Bar; as. Kip Hunter Marketing LLC; at. NF Servicing LLC; au. NRI 11 LLC; ay. NRI 15 LLC; aw. NS Holdings LLC; ax. PRCH LLC; ay. PK Adventures LLC; az. PK's Ride Ltd; ba. Rothstein Family Foundation; bb. RRA Consulting Inc.; be. RRA Goal Line Management LLC; bd. RRA Sports and Entertainment LLC; 30 EFTA00223333 Case 0:09-cr-60331-JIC Document 1 Entered on FLED Docket 12/01/2009 Page 31 of 36 be. RSA 11* Street LLC; bf. RW Collections LLC; bg. S & KEA LLC; bh. Scorh LLC; bi. Tipp LLC; bj. VGS LLC; bk. The Walter Family LLC; bl. Walter Industries LLC; bm. WPBRS LLC; bn. WAWW; bo. WAWW 2 LLC; bp. WAWW 3 LLC; bq. WAWW 4 LLC; br. WAWW 5 LLC; bs. WAWW 6 LLC; bt. WAWW 7 LLC; bu. WAWW 8 LLC; by. WAWW 9 LLC; bw. WAWW 10 LLC; bx. WAWW 11 LLC; by. WAWW 12 LLC; bz. WAWW 14 LLC; 31 EFTA00223334 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 32 of 36 ca. WAWW 15 LLC; cb. WAWW 16 LLC; cc. WAWW 17 LLC; cd. WAWW 18 LLC;. ce. WAWW 19 LLC; of. WAWW 20 LLC; cg. WAWW 21 LLC; ch. WAWW 22 LLC; ci. J13 Boca M Holdings LLC; and "the defendant G. Contributions ("C"), hereinafter collectively referred to as contributions:" tarily offered, and (C1) $6,000 in campaign contributions made to Alex Sink and volun turned over, to the United States on behalf of Alex Sink; a, "Florida" account (C2) $40,000 in campaign contributions to Republican Party of Florid the Republican Party and voluntarily offered, and turned over, to the United States by of Florida; Florida, "Federal" (C3) $10,000 in campaign contributions to Republican Party of United States by the account and voluntarily offered, and turned over, to the Republican Party of Florida; of Florida and voluntarily (C4) $90,000 in campaign contributions to Republican Party Republican Party of Florida; offered, and turned over, to the United States by the 32 EFTA00223335 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 33 of 36 (C5) $5,000 in campaign contributions to Republican Party of Florida by Rothstein business entity known as WAWW and voluntarily offered, and turned over, to the United States by the Republican Party of Florida; (C6) $800,000 Charitable Donation to Joe DiMaggio Children's Hospital, which hospital voluntarily advised the United States of the donation from the Rothstein Family Foundation, for the purpose of facilitating forfeiture; (C7) $1,000,000 Charitable Donation to Holy Cross Hospital, which hospital voluntarily advised the United States of the donation from the Rothstein Family Foundation, for the purpose of facilitating forfeiture; (C8) $9,600 in campaign contributions to Governor Charlie Crist, voluntarily offered, and— _ turned over, to the United States by the office of Charlie Crist; and (C9) All funds voluntarily turned over to the United States (IRS/FBI), since in or about October 28, 2009, in response to publicity regarding Scott W. Rothstein. 6. If any of the property described above as being subject to forfeiture, as a result of any act and omission of the defendant - i. cannot be located upon the exercise of due diligence; S. has been transferred or sold to, or deposited with, a third party; iii. has been placed beyond the jurisdiction of the court; iv, has been substantially diminished in value; or I. has been commingled with other property which cannot be divided without difficulty,• 1963(m), and it is the intent of the United States, pursuant to Title 18, United States Code, Section by Title 18, United pursuant to Title 21, United States Code, Section 853(p), made applicable hereto 33 EFTA00223336 Case 0:09-cr-60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 34 of 36 States Cod; Section 982(b), and pursuant to Rule 32.2 Fed. R. Crim. P., to seek forfeiture of any other property of said defendant up to the value of the forfeitable property described above. All pursuant to Title 18, United States Code, Section 1963, Title 18, United States Code, Section 982(a)(1) and Title 18, United States Code, Section 981(a)(1)(C) made applicable through Title 28, United States Code, Section 2461; and the procedures outlined at Title 21, United States Code, Section 853. ACTING UNITED STATES ATTORNEY 34 EFTA00223337 Entered on Kai° a_cicet 12/01/2009 Page 35 of 36 Case 0:09-cr-60331-JIC Document 1 STATE UNITED S DISTRICT LtOurn SOUTHERN DISTRICT OF FLORIDA UNITED STATES OF AMERICA CASE NO. CERTIFICATE OF TRIAL ATTORNEY. vs. SCOTT W. ROTHSTEIN Defendant. Superseding Case Information: New Defendant(s) Yes _X__ ___lo Court Division: (saes one) Number of New Defendants Total number of counts . Miami — Key West a— FTI, — WPB _ FTP I do hereby certify that of the indictment, the number of defendants, the number of 1. I have carefully considered the allegationsxities of the Indictm enWnf ormati on attach ed hereto . probable witnesses and the legal comple d on. this statement will be relied up:mofby the Judges of this 2. I am aware that the Information supplie schedu ling crimina l trials under the mandates the Speedy Trial Act, Court in setting their calend ars and Title 28 U.S.G. Section 3161. 3. Interpreter. (Yes or No) List language and/or dialect 4. This case will take n days for the parties to try. below 5. Please check appropriate category and type of offense listed (the& atone) puck onlf OM __X___ Petty 0 to 5 days I Minor II 8 to 10 days Misdem. III 11 to 20 days Felony 21 to 60 days if 61 days and over (Yes or No) Na ___ 6. Has this case been previously filed In this District Court? If yes: Case No. Judge: (Attach copy of dispositive order) (Yes or No) No__ Has a complaint been filed in this matter? If yes: Magistrate Case No. - Related Miscellaneous numbers: Defendant(s) in federal custody as of Defendant(s) in state custody as of District of Rule 20 from the Mn_ Is this a potential death penalty case? (Yes or No) Does this case originate from a matter pendin g in the U.S. Attorneys Office prior to 7. —IL_ No April 1, 2003? _ Yes Does this case originate from a matter pendin g in the U. S. Attorney's Office prior to 8. .X___ . No April 1, 1999? Yes No Yes If yes, was it pending in the Central Region? Does this case originate from a matter pendinX._ g in the Northern Region of the U.S. Attorney's Office prior 9. Yes No to October 14, 2003? — Does this case originate from a matter pendin g In the Narcotics Section (Miami) prior to 10. Yes _X— No May 18, 2003? prior Does this case originate from a matter pendin g in the Central Region of the U.S. Attorney's Office 11. Yes .....X__ . No to September 1, 2007? — EFTA00223338 Case 0:09-cF60331-JIC Document 1 Entered on FLSD Docket 12/01/2009 Page 36 of 36 • UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA PENALTY SHEET Defendant's Name: SCOTT W. ROTHSTEIN Count ti: 1 18 U.S.C. § 1962(d); RICO Conspiracy; * Max.Penalty: 20 years imprisonment, $250,000 fine Count, #: 2 18 U.S.C. § 1956(h); Conspiracy to Commit Money Laundering; * Max,Penalty: 20 years imprisonment, $500,000 fine or twice the value of the property involved in the transaction. Count W: 3 18 U.S.C. § 1349; Conspiracy to Commit Mail Fraud and Wire Fraud; * Max.Penalty: 20 years imprisonment, $250,000 fine Counts #: 4-5 18 U.S.C. §§ 2; 1343; Wire Fraud * Max.Penalty: 20 years imprisonment, $250,000 fine *Refers only to possible term of incarceration, does not include possible fines, restitution, special assessments, parole terms, or forfeitures that may be applicable. EFTA00223339 IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA COMPLEX BUSINESS DIVISION CASE NO. 09 059301 STUART A. ROSENFELDT, individually, and ROTHSTEIN ROSENFELDT ADLER, P.A., a Florida Professional Service Corporation, Plaintiffs, SCOTT W. ROTHSTEIN, Defendant. AMENDED COMPLAINT FOR DISSOLUTION TE POWERS TO STUART A. AND FOR EMERGENCY TRANSFER OF CORPORA APPOINTMENT OF A ROSENFELDT, OR, IN THE ALTERNATIVE, FOR CUSTODIAN OR RECEIVER tein Rosenfeldt Adler, P.A. Plaintiffs, Stuart A. Rosenfeldt, individually, and Roths t Scott W. Rothstein, and allege as (sometimes referred to as the "fum"), file this action agains follows: PRELIMINARY STATEMENT tein Rosenfeldt Adler, P.A. have It is with surprise and sorrow that the attorneys of Roths CEO of the firm, has, according to learned that Scott W. Rothstein, the managing partner and ntial misappropriation of funds assertions of certain investors, allegedly orchestrated a substa name. The investment business from investor mist accounts that made use of the law rum's of interests in structured created and operated by Mr. Rothstein centered around the sale ate the investigation and settlements. Immediate judicial action is being sought to facilit EXHIBIT 4-4 C OFFEY B URLI NOTON 269 BAY H Re DRIV MIAMI, FLORIDA 33133 OFFICE IN THE GROVE, FENIHO Sour" F: Email: www.coffeyburlington.com EFTA00223340 the firm in an appropriate accounting of investor funds and to address the ongoing affairs of feldt. Mr. Rosenfeldt, as manner through the transfer of all corporate powers to Stuart A. Rosen s Mr. Rothstein, is uniquely the firm's President and only other equity holder in the firm beside funds in the firm's trust positioned to wind down the affairs of the firm, to account for all clients. In the alternative, accounts, and, most importantly, to protect the interests of the firm's ian of the firm during its Plaintiffs' equest that the Court appoint Mr. Rosenfeldt as custod appoints a receiver, there is no dissolution or appoint a receiver. In the event that the Court law practice because the dedicated necessity for the receiver to assume any control of the firm's . , of the firm's clients will remain attorneys and staff are continuing to assure that the interests paramount and will be fully prbtected. ize any further damage caused ..Mr. Rosenfeldt and the firm have filed this action to minim . . and staff of the firm are not by Mr. Rothstein, to emphasize that the innocent attorneys protect the best interests of their clients. implicited in this controversy, and, most importantly, to NATURE OF ACTION an accounting pursuant to 1. This is an action for judicial dissolution of the firm and seek transfer of all corporate Florida Statutes Section 607.1430(3). Additionally, Plaintiffs appointment of Plaintiff Rosenfeldt as powers to Plaintiff Rosenfeldt, or, in the alternative, the ant to Florida Statutes Sections custodian of the firm or the appointment of a receiver, pursu 607.1431 and 607.1432. nt authority to 2. Plaintiff Rosenfeldt is the firm's president. He has the inhere inthitethis emergency litigation. CEO. Rothstein, a 3. Defendant Rothstein is thelnifs managing partner and , especially financial matters, charismatic and talented lawyer, has controlled firm management 2 COFFEY B URLINOTON BATSHORE DRIVE MIAMI, FLORIDA 33 I 33 °VINCE IN THE GROVE, PENTHOUSE 2699 SOUTH T: P: Entail: infoecoffayburlingcon.com www.cof eyburlingtoti.com EFTA00223341 to any other attorney at the and has not extended access to core financial matters and records firm. the equity in 4. Plaintiff Rosenfeldt and Defendant Rothstein are the sole owners of the firm. Suite 1650, Fort 5. The firm's principal office is located at 401 East Las Olas Blvd, Lauderdale, FL 33301. pal office is in 6. Venue properly lies with this Court because the fine's princi Broward County. BACKGROUND AND GROUNDS FOR DISSOLUTION . The Firm dant Rothstein in 2002. 7. The firm was founded by Plaintiff Rosenfeldt and Defen employment law, but the 8. The firm's practice was originally focused on labor and intellectual property, corporate law, firm grew rapidly and its practice areas expanded to include actions, mass torts and personal mergers arid acquisitions, real estate, criminal defense, class injury claims, among others. a, New York, and 9. The firm currently has seven offices, with locations in Florid Venezuela, and employs over 70 lawyers. ers, including 10. The firm has an outstanding group of attorneys, staff memb ide, even national reputations, for distinguished former judges, many of whom have statew professional excellence. The Settlement Funding Scheme larities surrounding a 11. Firm lawyers learned in the past few days about irregu ent funding business involved settlement funding business operated by Rothstein. The settlem 3 COFFEY BURLINGTON P UTH BAYSHORE DRIVE MIAMI, FLORIDA 33133 OFFICE IN TIIH Gaon. IDEarrii T: F: 305.858.526 L infoecoffeyburlington.com www.eoffeyburlington.com Email: EFTA00223342 settlements to investors. the purchase of structured legal settlements and the sale of these substantial funds are not properly Various investors have informed the firm that they believe that s undertaken over this past weekend accounted for and are missing. A review of the firm's record law cannot be accounted for, indicates that various funds unrelated to the direct practice of misused by Rothstein who circumstances suggesting that investor money may have been dant Rothstein may have been controlled all such accounts. Some investors allege that Defen to investors. fabricating non-existent structured legal settlements for sale done without any 12. Defendant Rothstein's allegedly improper activities were Rothstein actively endeavored to hide knowledge of the other attorneys at the firm, and, in fact, ago that Plaintiff Rosenfeldt or any of the existence of the scheme. It was not until several days circumstances concerning Defendant the other lawyers at the firm discovered somo of the Rothstein's actions and the alleged improprieties. concerning the 13. The firm's attorneys still have extremely limited knowledge ding expeditiously to undercover the allegation's, and yet, recognize the importance of procee powers to Plaintiff Rosenfeldt, or, in the truth. Thus, the emergency transfer of all corporate feldt as the firm's custodian or the alternative, the emergency appointment of Plaintiff Rosen a preliminary inquiry concerning appointment of a receiver, is critical to undertake at least recommendations to the Court Defendant Rothstein's conduct, and to make appropriate concerning any further investigation. Misuse of the Investor Trust Accounts iffs only recently 14. With respect to the settlement funding scenario, Plaint Rothstein's investor trust accounts and discovered troubling information concerning Defendant ver, it appears that Defendant details simeunding the transactions are still emerging. Howe 4 COFFEY BURLINGTON 2699 SOUTH BAYSHORE DRIVE MIAMI, FLORIDA 33133 OFFICE IN THE GROVE, PENTHOUSE T: P: Email: infoecorfcyburlington.com www.coffeyburlington.com EFTA00223343 or trust accounts, and that the Rothstein may have transferred substantial sums out of the invest feldt, or, in the alternative, the emergency transfer of all corporate powers to Plaintiff Rosen custodian or the appointment of a emergency appointment of Plaintiff Rosenfeldt as the firm's er taking action to recover the receiver, is necessary to account for and, if appropriate, consid missing investor trust account funds. Shareholder Deadlock ed and substantial 15. Defendant Rothstein has declined to resign. despite the assert the law firm. For this reason, among irregularities because be purports to hold a 50% share of g managdment of the firm as it currently others; there is a substantial shareholder deadlock, makin stands impossible. COUNT I (DISSOLUTION) 1-15. 16. Plaintiffs adopt, incorporate, and reallege paragraphs dissolve a corporation in a 17. Under Florida Statute 607.1430, a circuit court may rate affairs is deadlocked and irreparable proceeding by a shareholder if the management of corpo Additionally, a circuit court may injury to the corporation is threatened or being suffered. if a sufficient showing is made with dissolve a corporation having 35 or fewer shareholders s the corporation. resppct to improper or irregular conduct that materially injure ed these two grounds for 18. For the reasons stated herein, Plaintiffs have demonstrat dissolving the firm. and all other such remedies that the WHEREFORE, Plaintiffs demand judgment of dissolution Court finds appropriate. 5 COFFEY BURLINGTON 9 UM MIAMI. FLORIDA 33133 OFFICE IN TIIH OROVH, PHNTNOUSH F:n" www.coffeyburlington.tom EFTA00223344 COUNT II F NFELDT) (TRANSFER OF CORPORATE POWER TO PLAINTIF ROSE 19. Plaintiffs adopt, incorporate, and reallege paragraphs 1-18. proceedings to take any 20. Florida Statute 607.1431(3) permits a court in dissolution located, and carry on the business of action required to preserve the corporate assets wherever the corporation. 's exercise of this 21. For the reasons stated herein, Plaintiffs submit that the Court power over the firm to Plaintiff discretionary power is appropriate to transfer all corporate perform an accounting of the firm's Rosenfeldt to effect the dissolution request in Count I, to to uncover the extent of Defendant assets and liabilities, to undertake all actions necessary engagements, to appoint a chief Rothstein's activities, to wind down the firm's client to Florida Bar Rule 1-3.8, to institute restructuring officer and an inventory attorney pursuant • • . law proceedings, to file assignments for the federal bankruptcy proceedings or other related state actions as may be necessary and appropriate benefits of creditors, and to undertake all such other under law. er all corporate power over the firm to 'WHEREFORE, Plaintiffs demand that the Court transf Plaintiff Rosenfeldt. COUNT M (IN THE ALTE RNAT IVE, APPOINTMENT OF FIRM) PLAINTIFF ROSENFELDT AS CUSTODIAN OF .1lik, 22. Plaintiffs adopt, incorporate, and reallege paragraphs 1-18. t court in a judicial 23. Florida Statutes 607.1431(3) and 607.1432 permit a circui ss and affairs of the dissolving dissolutidn to appoint a custodian to manage the busine corporation. 6 Cort stiv B ORLINGToN 2699 SOUTH PAYSHORE DRIVE MIAMI, FLORIDA 33133 OFFICE IN THE GROVE, PENTHOUSE F: Email: www.coffeyburlington.com EFTA00223345 ative to Counts II and 24. For the reasons stated herein, Plaintiffs request, in the altern of the firm and sole shareholder IV, that the Court appoint Plaintiff Rosenfeldt, the President the dissolution requested in besides Defendant Rothstein, as custodian of the Firm to effect ties, to undertake all actions Count I, to perform an accounting of the firm's assets and liabili ties, to wind down the firm's necessary to uncover the extent of Defendant Rothstein's activi an inventory attorney pursuant to client engagements, to appoint a chief restructuring officer and or other related state law Florida Bar Rule 1-3.8, to institute federal bankruptcy proceedings rs, and to undertake all such other proCeedings, to file assignments for the benefits of credito actions as may be necessary and appropriate under law. the Court appoint lAilIERBF0ita-plaintiffs demand, in the alternative, that COUNT IV RECEIVER) (IN 1HE ALTERNATIVE, APPOINTMENT OF A 25. Plaintiffs adopt, incorporate, and reallege paragraphs 1-18. t court in a judicial 26. Florida Statutes 607.1431(3) and 607.1432 permit a circui the business and affairs of the dissolution to appoint a receiver to wind up and liquidate dissolving corporation. alternative to Counts II and .27. .For the reasons stated herein, Plaintiffs request, in the requested in Count I, perform an III, that the Court appoint a receiver to effect the dissolution all actions necessary to uncover the accounting of the firm's assets and liabilities, undertake all such other actions as may be extent of Defendant Rothstein's activities, and to undertake necessary and appropriate under law. 7 COFFEY B URIANGTON " UTII BAYSHORR DRINK MIAMI, FLORIDA 33133 •OFFICF. in THI4 GROVE. PUNT T: 305.8 58.52 61 www.coffeyburlington.com Email: infoecoffeyburlington.com EFTA00223346 CONCLUSION nt funding and the 28. Defendant Rothstein's conduct in connection with the.settleme Dissolution and the emergency investor trust accounts appears at this point to be extensive. in the alternative, the emergency transfer of all corporate powers to Plaintiff Rosenfeldt, or, or the appointment of receiver, are appointment of Plaintiff Rosenfeldt as the firm's custodian ties, to consider any appropriate critical to uncover the full extent of Defendant Rothstein's activi , and to preserve, protect and action to recover missing proceeds, to protect the fin's clients review the firm's accounts and financial records! Dated this 3rd day of November, 2009. Respectfully submitted, COFFEY BURLINGTON Counsel for Plaintiffs 2699 South Bayshore Drive, Penthouse 33133 SSA feldt attesting to the truthfulness Annexed hereto as Exhibit A is an affidavit from Plaintiff Rosen of the allegations contained herein. 8 COFFEY 13 URLINGTON vs MIAMI, FLORIDA 33133 OFFICF. IN THli Gicova, Pawn ti 26 9 Sovrn B lj • F: www.aoffeyburlIngton.com Email: i EFTA00223347 CERTIFICATE OF SERVICE agreement and consent of I certify that on this 3rd day of November, 2009, with the lea c ect copy of the above Defendant Scott W. Rothstein's counsel, Mark Nuri and foregoing was served via email on Mr. Nurilc, at This 3rd day of November, 2009. 9 COFFEY B uRLINcTorg 2699 SOUTH BAYSHORN DRIVE MIAMI, FLORIDA 33(33 OFVICE IN THE GROVE, PENTHOUSE F: www.coffeyburlingtoo.com Email: EFTA00223348 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No. UNDER SEAL -CIV.MARRA EDWARD MORSE and CAROL MORSE, Plaintiffs. vs. JAN JONES INTERNATIONAL, INC. ailda ICON BY JAN JONES, Defendant. ORDER ON PLAINTIFFS' ORE TENUS MOTION TO SEIZE FURTHER ASSETS AND FOR OTHER RELIEF This cause came before the Court at hearing on March 17, 18, 19 & 20 2009, upon Plaintiffs', EDWARD MORSE and CAROL MORSE (collectively "MORSE"), ore semis Motion to Seize Further Assets and ore few and subsequent written motions for other relief. The Court has eareftilly considered the oral argument of counsel, considered the evidence and witnesses presented at the hearings and being otherwise fully advised in the premises; The COURT FINDS AND ORDERS AS FOLLOWS: I. Defendant, JAN JONES INTERNATIONAL, INC. a/k/a [CON BY JAN JONES end any and all other companies andfot other entities owned or controlled by JONES ("JONES"), arc liable for compensatory damages to MORSE in an amount in excess of 52,000.000.00; 2 Thal JONES is liable to MORSE for punitive damages for fraud, blithe amount of 21,000,000.00 modified from prior order of this court finding liability of 53,000,000.00 in punitive damages; Page 1 of 6 ExHisrr \s EFTA00223349 grant fraudulent activity as demonstrated by 3. The Court specifically finds that JONES' fla provides sufficient legal basis for an clear and convincing evidence by counsel for Morse matter shall be sealed but the record award of such punitive damages. The record on this appellate purposes; upon which this Court has relied shall be attached hereto for of funds clearly belonging to JONES 4. That there is currently in excess of S10,000,000.OQ orders of this and other courts; frozen in various banks in South Florida pursuant to prior stances absent further order of this S. That these funds arc not to be moved under any circum civil and criminal penalties; Court. That movement of these funds shall be punishable by nt to order of this Court, to fund the 6. That these funds are specifically being held, pursua award of damages to MORSE; 7. That these courts have jurisdiction to order same; above, based upon clear and 8. That in addition to the funds set forth in paragraph 4 l's expert witnesses, convincing evidence presented by counsel for MORSE and counse n Islands in JONES has illegally moved funds from the United States to the Cayma violation of federal law. for the purpose of secreting these assets; this regard dearly establishing 9. That the IRS has provided competent testimony in of entitlement ownership of these funds by JONES and clearly establishing a partial right ; by the IRS toe portion of these funds. Such liability shall be less than $5,000,000.00 United States; 10. That this Court has jurisdiction over said assets as they originated in the That the treaties between the United Stales and the Cayman Islands and related governments clearly establishes the right of the United Slates to seize such assets. That a counsel for MORSE has facilitated the contact between the relative governments and as Page 2 of 6 EFTA00223350 result.. this Court has received clear and convincing evidence that such funds will be immediately transferred to the United States; 12. That the Clerk of Court is hereby directed to immediately submit the proper documentation to the appropriate basic of the Cayman Islands to facilitate immediate transfer of these funds. That any issue arising from such transfer shall be immediately reported to this Court; 13. That the evidence presented by counsel for JONES wan inadequate to overcome the findings made by this court bused upon the evidence presented by counsel for MORSE. That counsel for JONES is 'hereby is found to have acted in contumacious disregard for prior orders of Ibis and other courts and thus, h found to be in contempt thereof. Further order regarding same shall follow the evidentiary hearing in this regard to be set by this Conn; U. That MORSE shall be entitled to one-third of any monies collected front counsel for JONES pursuant to said contempt order, if monies are assessed: IS. That this Court has entered an order Retain said assets and has the authority to do so; 16. That JONES' counsel's arguments that this Court lacks such jurisdiction is without merit and frivolous; 17. That the presentation of such evidence by counsel for JONES demonstrates a lack of a good faith basis to prevent same in violation ofFederal Rule of Civil Procedure, 11; 18. That MORSE has demonstrated by clear and convincing evidence, ownership of these funds by JONES, that said funds are hereby frozen and not subject to any activity by JONES or any agent of JONES whether situated here or in the United States: Page 3 of6 EFTA00223351 of satisfying the judgment of this Court lg.That these funds shall be frozen for the purpose against JONES and in MORSE's favor; attorney's trust account the sum of 20. That MORSE shall be required to deposit to their day of March, 2009, $15,000,000.00 no later than l0;00 a.m. tomorrow morning, the 2ffh funds. If such funds arc not so to secure JONES in the event of an illegal seizure of said and the case shalt proceed posted, this order shall be null and void in its entirety according to further order of this Court; and testify, under oath, as to his 21 That counsel for MORSE shall appear before this Court t to action by the Florida Bar; receipt of these funds, under penalty of perjury end subjec E's counsel, made under oath; 22. That based upon argument and representations of MORS to the economy and that such MORSE is suffering from significant financial distress due E; thus, as swiftly as a posting could cause severe and irreparable harm to MORS federal agencies now possible, in a manner that does not interfere with the mission of the ation of the federal herewith involved, however, with the full and unfettered cooper Morse of $15,000,000.00 agencies now involved in this matter, following the posting by ns. all other bond amounts associated with the seizure of the funds located in the Cayma previously posted by MORSE, shall be returned to MORSE as follows: $15,000,000.00 0 posted in two S4.118,757.00 previously posted by MORSE, and the $18,500,000.0 as liason between his clients separate postings by MORSE. MORSE's counsel shall act there be any unnecessary and the federal agencies to expedite return of the funds. Should this Court on an delay in such retum of funds, Counsel for MORSE shall appear before not ht emergency basis to seek whatever assistance is required, and such assistance shall to take all steps necessary to unreasonably withheld. The Clerk of the Courts is ordered Page 4 of 6 EFTA00223352 E in a timely and expedited assist counsel in expediting return of the funds to MORS fashion; Clerk's receipt of said funds herewith being 23. Further, within three (3) business days of the this order, said amount being transferred from the Cayman Islands in compliance with so that this Court can issue approximately $20,000,000.00, shall notify this Cowl of same business days of such order an order as to the division of said funds. Within five (5) be delivered to them via their dividing same, that portion belonging to MORSE shall counsel; to appeal the order of interest and 24. The Court finds that JONES has waived its right court finds that JONES penalties based upon the doctrine of fraud in the inducement. The fact the doctrine that he who is not entitled to equitable relief of any kind based upon the and thus can not recover seeks equity must do equity. JONES has unclean hands anything from MORSE; tly hearing the mailer known as 25. That this Court has jurisdiction over the Court curren ter referred to as MiZNER, referred to in the Court record by number and hereaf MIDNER; any and all bond funds held 26. That this Court orders the Court below (MIZNER) to release s days of the entry of this pursuant to prior order of that court within three (3) busines that same occurs. Should order. Counsel for MORSE shall facilitate same and insure this Court on an emergency there be a delay, counsel for MORSE shall appear before established objectives; basis and seek whatever assistance is needed to achieve the all deadlines in this Order are satisfied 27. Counsel for the parties arc instructed to insure that In a timely fashion, subject to further order of this Court; Page 5 of 6 EFTA00223353 Court have of the Sou thern District of Florida and this 28. That both the Federal Court ed in either venue; and matters and same may bo enforc concurrent jurisdiction over these r 21, 2008, The Freedom of recy Act as amended on Octobe 29. That pursuant to the Bank Sec ction Patriot Act II, The Currency and Foreign Transa Infonhation Act, The United States , the USA on November 11, 2006, USC 5311-5300 Reporting Act of 1970 as amended upon information received judgment of this Court based Patriot Act, Title III and the , the findings hereof, and of and amounts contained herein under oath, this Order, the facts fidence so as not to ding same shall be held in strict con any arid all other matters surroun tal agencies. stigatio n by the appropriate governmen jeopardize any potential inve alties. shall result in civil and criminal pen Violation of this portion of this order m Beach County, Florida this mbers at West Palm Beach, Pal DONE MID ORDERED in Cha 25ie day of March , 2009. KENNETH A. MARRA United Stoics District Judge Copies to: MI counsel of record IRS, Plantation Office FBI, Miami Office Page 6 of 6 EFTA00223354 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No. UNDER SEAL -CIV-NIARRA EDWARD MORSE and CAROL. MORSE. Plaintiffs, vs. JAN JONES INTERNATIONAL, INC. tilkia ICON BY JAN JONES, Defendant. STIPULATED CONFIDENTIALITY ORD ER I. On March 24,2009, this Court entered a detailed Order with regard to its Fina l Findings in this matter ("Final Order"). 2. As a direct result of the nature of a sign ifica nt amount of the evidence presented to this Court prior to the Court entering its Fina l Order, and as a result of the contents of that Final Order, this Court has made a dete rmination that the Final Order itself as well as the evidence leading to same shall be seale d and shall remain confidential, in perpetuity, unless otherwise ordered by this Cou rt or another court of competent jurisdiction as detailed in this Confidentiality Order. 3. All panics to this matter, including all witnesses thereto, are hereby boun d by this Confidentiality Order. 4. Any failure to comply with this Con fidentiality Order by any party or witness shall result in sei.ere consequences. including. without limitation, civil and criminal penalties. Page I of I EFTA00223355 5 Any breach of this Confidentiality Order must be reported to the Court, immediately by the discovering party. Failure to so report same shall result in severe consequences, including, without limitation, civil and criminal penalties. 6. The Final Order of this court dated March 24, 2009 shall be made a part hereof, and shall be incorporated by reference herein. 7. Any failure to comply with this Confidentiality Order or Final Order, must be reported to this court, under seal, and such non compliance shall result in severe consequences to the ha-eaching party. 8. All information relating this Court's Final Order to which any party is given access or which is made available to any party is hereinafter referred to as "Confidential Infommtion." Confidential Information shall include, without limitation, all methods and systems used in this case, names and addresses of customers, technical memoranda, research reports, investigative reports, analyses of any part of this case, all data, documents, and technology, contracts, depositions, notes of depositions, clients notes, clients diaries, lawyers notes, court notes, court orders preceding this order, pleading, all discovery, all email or other electronic communications between any and all parties, witnesses, lawyers, and/or other participating in any way in this matter, proprietary information, historical and projected financial information, acts of fraud, information relating to transfer of funds fraudulent or otherwise, posting of bonds, return of bonds, attorneys fees. operating data and organizational structures, now or hereafter existing or previously developed, or acquired, regardless of whether any such information. data or documents qualify as -trade secrets" under applicable lass, any and all other information related to this or any other related matter (collectively. the "Confidential Information.). Page 2 or IS . EFTA00223356 Because the secrecy of the Confidential Information is critical to this court and its further proceedings which shall also remain confidential until brought public, the parties and witnesses hereto acknowledge and agree that the Confidential Information shall, at all times, be kept in strict confidence by the party and/or witness and same shall not, directly or indirectly, during or after the entry of this order and its execution, except as required by law, with the prior written consent of this court, (a) disclose to any person or entity any Confidential Information without the express written consent of this court which may be withheld In its tole discretion, or (b) use any Confidential Information for the parties own benefit or any other purposes, for the benefit or purposes of any other person or entity or in any manner, whatsoever. If the party or witness is required in any civil or criminal legal proceeding, regulatory proceeding or any similar process to disclose any part of the Confidential Information, such party shall give prompt notice of such request to the Court and the Court shall enter an order as it deems appropriate. Nothing shall be disclosed without same. 9. All Confidential Information, including, without limitation, all copies of all documents and other materials which the parties have received or reviewed or otherwise have knowledge of, shall, at all times, be kept in strict confidence by the party. ICI. The parties have been advised and fully understand the heightened confidentiality requirements relative to this matter, including, among other things, the legal obligations of lawyers to maintain their confidentiality obligations to clients and the parties legal obligation to maintain the confidentiality set forth in this order. Clients are restricted from discussing this matter with any individual or entity other than their respective counsel of record in this matter. The panics have indicated that they . as a result of this action. have Page 3 of I EFTA00223357 access w certain Confidential Information as defined herein. By execution of this order, the parties recognize, acknowledge and confirm their understanding of the confidential nature of the Confidential Information and the damage that would result if any of the Confidential information is disclosed to any Person and the parties understand their obligation to this court and the fact that this court has jurisdiction over them upon execution of this document by their consent thereto. II. Further, because disclosure of any Confidential Information as defined herein would result in severe damage as contemplated by this Court, which would be difficult to quantify, the parties agree that liquidated damages would be a reasonable basis to calculate civil damages caused by a breach and that damages of 51,000,000.00 per each incident of disclosure of Confidential Information by the parties and/or their representatives is agreed to under this Confidentiality Order. Such liquidated damages shall not prevent this Court from assessing additional damages and from moving forward in a criminal proceeding against the party so breaching this Confidentiality Order. 12. Each party hereby represents and warrants that they are not bound by the leans of a confidentiality agreement or other agreement with any third party that would conflict with any of the parties' obligations under this Confidentiality Order. 13. The Parties stipulate that this Stipulated Confidentiality Order is intended to strictly limit and prevent disclosure of information and production of documents compromising the Confidential Information set forth herein and in the Final Ordr dated March 24 2009. 14. It is further acknowledged that each party may be held responsible for any failure on his or her part w comply with the provisions of the Confidentiality Order; and agrees to Pale 4 of IS EFTA00223358 subject htmself or herself to the jurisdiction of this court for the purpose of enforcing this Confidentiality Order. 15. The restrictions set forth in this Confidentiality Order shall apply to any and all documents or other information, whatsoever, designated as "CONFIDENTIAL" by this Court. All information shall be deemed confidential and the parties agree to exercise extreme discretion in protecting same. The Court hereby warns all parties hereto to err on the side of protecting such data. Violation of this order will be dealt with immediately and subject the violator to severe sanctions and penalties. 16. This Agreement shall be binding upon the parties hereto and their respective agents, successors and assigns, and inure to the benefit of the parties and their respective successors and assigns. 17. The parties warrant to each other that they each have full power and authority to execute this Agreement for and on behalf of themselves and/or their respective companies. Parties. as used herein, shall include all persons executing this document as well as their representatives, agents and assigns. 18. Each party placing their signature hereon makes the following attestation: I certify and acknowledge, under penalty of perjury, that I have received a copy of the Stipulated Confidentiality Order (the "Confidentiality Order") which governs the production and use of confidential documents and information produced by the Parties (as defined in the Order) or third parties in this case. I have read and understand the Order and I hereby acknowledge that I am bound by it and agree to abide by it. I further understand that inthrrnation designated as -CONFIDENTIAL" in this case. and any notes, memoranda or other form of information derived from it. Page 5 of 15 EFTA00223359 me to anyone else except in strict accordance may nor be used, copied or disclosed by defense of this litigation upon with the order and then only for the prosecution and proper court order. 'SIGNATURES ON FOLLOWING PAGES' Page 6 of IS EFTA00223360 I' I r•- 72,1 7itt ' ill Me/ f EDWARD J. MORSE STATE couwri ) ed EDWARD J. MORSE who, after BEFORE ME, the undersigned authority, personally appear read the Foregoing document and that it is being duly sworn according to law, deposes and says that he has true and correct under penalty, of perjury. SWORN AND SUBSCRIBED before me thie 7 day oCii rce-C -Ch009. • ISIgnegureeNotary Publk) 1 in f l e; 'r t 17 — (Mot Typ‘ or Signip Cristo :laps, dihritti bl DOLORES DAOUST ;:"s NOlarf Ptitk • Stale or nod* 4 My Corriclulai DriresIke 2A, 2012 TT Commission e 9codedDm* COMA IISSCC" NUMBER/EXPIltATIOXSEA L l'au.e or 15 EFTA00223361 United States Court of Appeals, Eleventh Circuit. Under Seal-Civ-Marra. EDWARD MORSE and CAROL MORSE, Plaintiffs-Appellants, I JAN JONES INTERNATIONAL, INC. a/k/a ICON BY JAN JONES, Defendant-Appellee. In re EDWARD MORSE and CAROL MORSE, Petitioners. Appeal from the United States District Court for the Southern District of Florida (Under Seal- Civ-Marra), Kenneth A. Marra, Judge. PETITIONERS' MOTION FOR EMERGENCY WRIT OF MANDAMUS Petitioners, EDWARD MORSE and CAROL MORSE, by and through their undersigned counsel, file this, their Motion for Emergency Writ of Mandamus and would state as follows: 1. This matter is before this Honorable Court on an Emergency Writ of Mandamus. 2. This mar and the entire file below have been presented to the court as SEALED pursuant to prior ordt-r of the Court below. 3. This matter is pending before the Honorable United States District Court Judge, Kenneth Marra. 4. On March 25, 2009 and on April 23, 2009, Judge Marra entered detailed orders in this matter, copies of which are attached hereto and incorporated by reference herein. 5. _ As set forth in the Orders, Judge Marra ordered that certain specific acts lake place on certain specific dates. Many of these acts involved return of a large sum of money to the .- . Plaintiffs. 1 RalliSTEIN HOSEATF-1.1.11ADLER Las Olas City Centre, 401E- Las Olas Boulevard, Suite 1650, Fon Lauderdale, Florida 3.T301 EFTA00223362 6. Upon receipt of the orders, the undersigned began to put into place all actions necessary to timely comply wittcsaid orders. 7. In hearings held subsequent to the entry of these orders, it became abundantly clear to the undersigned that Judge Marra was in some way uncomfortable with his orders and was either staying the orders or reversing his prior decisions by vacating the orders. 8. However, despite continuous inquiry by the undersigned, counsel was unable to determine what Judge Marra intended to do and how he intended to proceed. 9. A thorough review of the record below which is available to this Court under seal clearly indicates that the undersigned, as counsel for the plaintiff had significant basis for concern based upon comments and ore tenus rulings made by Judge Marra in the court below. 10. Most importantly, as can be seen by the sealed record now before this court, when the undersigned specifically inquired of the Court as to whether he was permitted to move forward with the orders entered on March 25'h and April 23i4 , the courts responses to the undersigned are non-descriptive and completely without guidance at best. . . . 11. When the undersigned inquired of the court below anther and specifically asked the court whether the orderi were stayed, vacated, reversed or in full force and effect, the court clearly replied that the court believes it had made itself clear. 12. Not wanting to violate a court order of a respected district court judge, the undersigned determined that the only course of conduct remaining in order to protect his clients' rights was to file an Emergency Writ of Mandamus with this court 13. It is the position of the Plaintiffs that they have a clear and unwavering legal right to the relief awarded them in the courts orders as set fdrth herein. 2 Paritsre BOSENFELDT ABLER Las Ohs City Centre, 401E- Las Olin Boulevard. Suitt 1650, Fort Lauderdale, Florida 33301 EFTA00223363 14. Moreover, it is without doubt that the undersigned had every right to be concerned •_ • • • . • . • with the ore tens rulings of the court below which post dated the orders in question. 15. As an officer of the court, the undersigned has a direct responsibility to zealously protect the rights of his client. And, as an officer of the court, the undersigned has a direct responsibility to fully and completely obey the orders of court and when, he is given reason to doubt the efficacy of subsequent orders of court that appear to taint the order in question, to attempt to ascertain the validity of said order. That is exactly what the undersigned has done here. 16. Upon determining that the validity of the orders in question were in doubt, and upon determining that he could mot-proceed without further order of a higher court, this Emergency Writ was filed. 17. Plaintiffs have a clear legal right to the relief specifically set forth in the orders in question. 18. The court below had an indisputable duty to act but failed to do so and failed to given the undersigned any guidance. 19. At this stage in the proceedings, the Plaintiffs have no other remedy at law other Than this Writ. 20. If this writ is not entered in Plaintiffs favor, the Plaintiffs will suffer unfair prejudice as a matter of law. Dated this day of RCYllISTEIN R0SENFELDT ADLER Las Olas City Ccntrc, 401E. Las Olas Boatyard, Suite 1650, Fort LaudcvJale. Florid". 33301 EFTA00223364 Respectfully submitted, ROTHSTEIN ROSENFELDT ADLER Counsel for Petitioners Las Olas City Centre 401 E. Las Olas Boulevard Suite 1650 Fort Lauderdale. Florida 33301 Tel: Fax: , Email: By. . Rothstein, Esq. Florida Bar No.: 765880 -- FOR THE FIRM 4 ROTHSTEIN ROSENFELIT ADLER Las Ohs City! Centre, 401E Las Ohs Boulevard, Suite 16,50, Fort Lauderdale, Florida 83501 EFTA00223365 United States Court of Appeals, Eleventh Circuit. Under Soal-Civ-Marra. EDWARD MORSE and CAROL MORSE, Plaintiffs-Appellants, I JAN JONES INTERNATIONAL, INC. a/k/a ICON BY JAN JONES, Defendant- Appellee. In re EDWARD MORSE and CAROL MORSE, Petitioners. August 13, 2009. Appeal from the United States District Court for the Southern District of Florida (Under Seal-Civ-Marra), Kenneth A. Marra, Judge. On Petition for Writ of Mandamus. Before Susan H. Black, Circuit Judge: ORDER ON EMERGENCY WRIT OF MANDAMUS Having reviewed the sealed court file as provided by the Clerk of the Court below (Judge Marra), and having heard argument of counsel in closed proceedings to maintain the integrity of the confidentiality order issued in this matter by the Court below, as well as having hoard directly from Judge Marra and Judge Gerber, we find as follows: Findings of Fact I. The Court below entered orders on March-25, 2009 and April 23, 2009, specifying that certain specific acts were to take place on certain specific dates. Many of these actions involved return of funds rightfully belonging to the Plaintiffs. EFTA00223366 2. Subsequent to the entry of same, Judge Marra, despite his rulings to the contrary, made multiple ore terms rulings on the record which gave counsel for Plaintiff clear room for pause in following said orders. 3. In multiple subsequent hearings, Plaintiffs counsel clearly attempted to ascertain whether the orders stood as entered or whether they had been reversed or stayed. Based upon our full and complete review of the record it became clear that Judge Marra had no intention of proceeding as he previously ordered and was either reversing or staying his prior orders as set forth above. Whichever his intention is not for this Court to decide. We simply review this matter as it is presented to us, to wit: ►awful orders were entered and then vacated or stayed for no clear and convincing reason_and without a stated basis in law or fact. We make no finding whether Judge Marra was correct in his conclusion, but simply that the record lacked the thoroughness and completeness that is mandated when reversing orders of this magnitude. 4. Thus, we find that counsel for Plaintiff properly and timely filed a sealed Emergency Writ of Mandamus with this Court in an attempt to properly protect his clients rights under the order. Conclusions of Law 1. This Court has jurisdiction over this matter pursuant to the laws controlling Writs of Mandamus 2. This matter is properly before this court 3. The findings of Judge Marra in the court below, in the orders dated March 25 and April 23, 2009, are well based in fact and law. EFTA00223367 4. The subsequent ore tenus rulings of Judge Marra are without basis in law or fact. 5. The subsequent ore tenus rulings by Judge Marra fail to provide a sufficient record, as mandated by the rules of town, to allow this court to enter a ruling as to whether Judge Marra had the legal right to stay or reverse his prior order. 6. Plaintiffs writ of mandamus is legally sufficient to allow this court to rule in full on all matters pending before it. Thus, we as a Court with jurisdiction over this matter find as follows: 7. Judge Marra's prior orders are hereby reinstated and remain in full force and effect. To the extent that the later order conflicts with the earlier order, the later order-. shall prevail and control. 8. Judge Marra's concerns regarding protection of the Governments role in this matter are, well founded in both law and fact. We specifically defer further comment on this portion of this matter to maintain the integrity of the governments investigation. 9. As a matter of procedure we note that a confidentiality order remains in full force and effect in this matter. We specifically mandate that our rulings herein shall have no effect, whatsoever, on said order and that same shall remain in full force and effect in perpetuity. We again strongly caution all counsel and mandate that they caution and counsel their respective clients that this matter is governed by a strict confidentiality order that this court hereby holds shall remain in fidl force and effect and which this 'court strongly cautions, contains severe penalfica for any violation of num. EFTA00223368 10. This order and the complete sealed record shall be forwarded to the Department of Treasury, forthwith. The clerk of this court is ordered to expedite same. Sealed instructions shall be provided by this court to the Clerk. 11. The Department of Treasury ii ordered to expeditiously review the materials and then, upon completion of same, shall immediately send a letter to this court advising that such review is complete and that they require nothing further from this court. Upon receipt of same, the clerk of this court shall advise Plaintiffs counsel that his Writ has been granted in full and that he is free to comply fully and completely with Judge Marra's orders. A copy of this order shall then be provided to all counsel ofrecord. 12. This Order shall not be furnished to any counsel of record until such time as the Department of Treasury has completed its review of the sealed record and has forwarded said letter as mandated above this court. This order is self executing and thus, nothing need be brought back before this court on any of these issues. 13. Plaintiffs have a clear legal right to the remedies they are seeking. 14. The court below had an indisputable duty to act but failed to to do so. 15. The plaintiffs have no other remedy available to them in law or equity. 16. If this court does not act, the plaintiffs will suffer irreparable harm and unfair prejudice. DONE AND ORDERED in Chambers, at Atlanta, Georgia, this 31 day of August, 2009. //1V;iC c,nited States A e te Court fudge United States Court of Appeals Eleventh Circuit Copies to: IRS, Plantation Office EFTA00223369 1. FBI, Miami Moe U.S. Dept of Treasury, Washington, D.C. Clerk of Court, United States District Court -1 EFTA00223370