Scott Rothstein: Why Come Back From Morocco?

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Back to the Scott Rothstein story.  Last time, we discussed why Rothstein fled to Morocco specifically.  I guess ultimately the answer depends on whether you believe it was a coincidence that not long before the fleeing started, he assigned somebody a research project involving countries that did not have extradition treaties with the United States.  If you don't believe that was a coincidence, the more difficult question is probably: Once safely in Morocco, why the hell did he come back?  I don't think there is a clear answer to this, either, but here are some possibilities.

First, it may not have been all that safe in sunny Morocco.  This is hearsay, but one report suggested that "investors in Morocco" had given Rothstein $85 million, and assuming they now realize they are not getting that money back, he might have needed to extradite himself from Morocco on the double.  But this report describes Rothstein as being "as happy as ever" during his time in Morocco.  Hard to believe he was that way all the time, as his life collapsed, but he didn't act hunted.

Second, as the Wall Street Journal noted, Rothstein's partner Stuart Rosenfeldt has claimed that in an email from Morocco, Rothstein listed his options as suicide, life on the run or life in prison, and that Rosenfeldt urged him to "choose life."  Maybe so, but maybe he didn't mean life in prison, the prospect of which might convince Rothstein to cut a deal.

I'm a Monitor Lizard, #1 on the Search Result for "Exotic Reptile." So Suck It, Komodo Dragon.Which is what he did, and that is not good for a lot of people.  For example, recent bankruptcy filings allege that all three named partners engaged in "curious and circuitous movement of law firm funds over the past few years."  These included borrowing millions from the firm and then paying that money back to the firm, themselves, their wives, and various third parties.  The filings also allege Rosenfeldt himself spent an awful lot of money — no golden toilets, apparently, but he did put $1 million on his firm-issued American Express card for charges including 72 pieces of jewelry for his wife, home furnishings, clothes, vacations, restaurant meals, and an undisclosed number of "exotic reptiles."  (Maybe this is why the expense reports I submit for my exotic reptiles keep getting rejected.)

Rosenfeldt's attorney said these allegations would "prove to be overstatements."

So, third, Rothstein may have a lot to chat about, and maybe having seen Morocco, he decided he might be able to cut a deal good enough to at least make prison reasonable in comparison to that hellhole.  Under the plea bargain, prosecutors agreed to recommend a sentence reduction and more lenient prison conditions in exchange for cooperation.  As a result, he is expected to get about 30 years rather than the 100 he faces.  (Bernie Madoff did not cooperate, and got 150 years.)  Still, 30 years is 30 years.

Fourth, Rothstein has maintained that he chose to come back, plead, and help authorities collect stolen assets, because he decided to "do the right thing."  I guess that is not impossible.

Finally, since I don't really like any of the above explanations, I am going to go with this one: with him in jail, the feds wouldn't feel obligated to go after his wife.  As noted above, all the partners gave lavish gifts — and lots and lots of cash — to their wives, and it is hard to imagine that they did not at least suspect something.  But the same was true of Ruth Madoff, who has also not been charged.  I am guessing that so long as the primary fraudster is behind bars, prosecutors are probably satisfied.

I haven't been able to find a better answer than that, so my guess is that Rothstein came back to the U.S. in order to make sure his wife stayed out of jail.  And that's nice, at least.

On the other hand, maybe he just really hates Moroccan food.

Link: Miami Herald (Feb. 12)
Link: Bob Norman's chat with Scott Rothstein (Nov. 2009)