Guys, No Dealing Drugs at the Office – I’m Trying to Run a Ponzi Scheme Here

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Lots of entertainment value in the transcripts of Scott Rothstein's deposition, which was taken in December. As you may recall, Rothstein was one of our nation's top Ponzi schemers until the scam came to light in 2009, whereupon he briefly fled to Morocco before deciding to return and plead guilty. See, e.g., "Wanna Buy a Watch? Asks Man With Golden Toilet," Lowering the Bar (Feb. 19, 2010); see also "Scott Rothstein: Why Go to Morocco?" and "Scott Rothstein: Why Come Back From Morocco?" Lowering the Bar (both Feb. 23, 2010). Rothstein's deposition was taken in a case related to his scheme; he is being as candid as possible, he says, because full cooperation is his only chance to not die in prison.

Hence the entertainment value.

All the transcripts are available at the website of plaintiffs' law firm, Conrad & Scherer, but Bloomberg and the Wall Street Journal have been posting some good excerpts. In this one, for example, Rothstein takes offense at being compared to über-Ponzi-schemer Bernie Madoff, even though Madoff Ponzi-schemed 20 to 50 times as much as Rothstein's lame $1.2 billion. Madoff is a scumbag, according to Rothstein, because he hasn't ratted out his partners. "Madoff should have taken me, and I'm proud to say this, as an example as to what you do when you want to do the right thing…. Because if you think he did that by himself, then you don't know anything about how these crimes work." I'm fine with the guy turning on his co-conspirators, I'm just not sure it raises his moral standing.

The better one, though, is the excerpt in which Rothstein says many of his law partners smoked pot in the office, some on a daily basis:

Q: [T]hat wasn’t incorporated in the rock-star lifestyle, using drugs with any of your investors or co-conspirators?

Rothstein: No, actually, never. Actually, I had a lot of opportunities to because there was a lot of marijuana smoking going on in my office, but it wasn’t something — I prefer to drink vodka.

Q: Actually in the office it was going on?

Rothstein: In the office, in the garage, outside the office, I had some partners that couldn’t come to work without smoking pot.

This is a shocking revelation, of course, because most big-firm partners prefer meth. But even worse, Rothstein says that some were actually dealing drugs from the office. This is where Rothstein claims he tried to draw the line:

Rothstein: I actually tried to put a stop to that.

Q: That was one crime you wouldn’t tolerate?

Rothstein: No, no, it’s not that. I didn’t want to draw attention. You don’t want to have marijuana dealing from the middle of your law office because I was running a giant Ponzi scheme out of there.

Q: Did you ever have any of the escorts visit the office?

Rothstein: Yeah. Sure.

Q: You had had prostitutes in the office, but you wouldn’t have pot?

Rothstein: You’re missing the point. The police also were sleeping with my escorts…. Pot, not a great idea in the office, I don’t know why, specifically, it bothered me; … probably because they were actually dealing the pot out of the office while I was in the middle of running a several-hundred-million-dollar Ponzi scheme.

(Emphasis added.) "Hey, guys, could you do me a favor here and not deal drugs out of the office? Your illegal conduct is gonna ruin my giant Ponzi scheme. I'm working my butt off here – can I get just a little cooperation? … No, the whores are fine."

There are almost certainly other gems in these lengthy transcripts, if anybody has time to do the mining.