35 former senior attorneys from the defunct Fort Lauderdale firm Rothstein Rosenfeldt Adler are being investigated by the Florida Bar. In November, Scott Rothstein, the firm’s co-founder, was disbarred, then criminally charged with operating a Ponzi scheme involving hundreds of millions of dollars of client and investor funds.

“The Bar is actively investigating and will pursue remedies against anyone who has violated any rules,” said Jessie Diner, president of The Florida Bar board of governors. “This investigation didn’t stop with Scott Rothstein.”

Client trust accounts will be the initial focus of Florida Bar investigators. They will first determine if false representations were made when they were certified, and whether Rothstein’s former colleagues misappropriated money from the accounts.

According to federal prosecutors, Rothstein’s clients were informed they were purchasing blocks of structured settlements from cases involving confidential agreements but the settlements did not exist.

• Rothstein Firm’s Furnishings to be Auctioned
• Records Show Rothstein’s Law Firm Gave More than $6 Million to Non-profits Last Year
• More Details in Rothstein Story – UPDATED
• More Bad News for Scott Rothstein
• Something Amiss at Rothstein Rosenfeldt Adler

U.S. Bankruptcy Judge Raymond B. Ray approved a request last week by the firm’s bankruptcy trustee to allow Fisher Auction to sell everything inside the office, including oriental rugs and some personal effects. Former attorneys at the firm and other employees have already removed their personal items.

Rothstein, who is accused of running a $1.2 billion Ponzi scheme tied to nonexistent settlements through law firm bank accounts, has been jailed since Dec. 1.

The proceeds from the auction will be added to the bankruptcy estate and be used to compensate victims of the alleged fraud.

Among the items that will be auctioned: Queen Anne wing chairs, a Louis XIV tapestry, Oriental rugs and marble-top tables.

• Florida Bar Extends Investigation Beyond Rothstein
• Records Show Rothstein’s Law Firm Gave More than $6 Million to Non-profits Last Year
• More Bad News for Scott Rothstein
• More Details in Rothstein Story – UPDATED
• Morning Roundup

Records show that the bankrupt Rothstein Rosenfeldt Adler firm made these contributions to at least 113 organizations. These documents were part of a filing in U.S. Bankruptcy Court by law the law firm’s trustee, Herbert Stettin.

Rothstein, accused of running a $1.2 billion Ponzi scheme out of his law office, is now sitting in the Federal Detention Center in Miami and at least thirty charities received letters last month warning them to return any money donated by Rothstein’s firm. Charities that do not return the money are at risk of being sued.

Of the money donated, the firm gave $2.5 million to the attorney’s own foundation, the Rothstein Family Foundation, and another $1 million went to the Florida Care Foundation, who have agreed to return the money.

• More Details in Rothstein Story – UPDATED
• Florida Bar Extends Investigation Beyond Rothstein
• Rothstein Firm’s Furnishings to be Auctioned
• More Bad News for Scott Rothstein
• Morning Roundup

Meanwhile, the court has ordered Toronto Dominion Bank to turn over all records related to Rothstein and his firm to the cour appointed receiver.

This is an update to a story we’ve been following for a week. Earlier reports can be found here and here.

• Rothstein Firm’s Furnishings to be Auctioned
• Records Show Rothstein’s Law Firm Gave More than $6 Million to Non-profits Last Year
• More Details in Rothstein Story – UPDATED
• Man Accused of Massive Ponzi Scheme to Remain in Jail to Await Trial
• Morning Roundup

Now we have more details on the alleged misconduct of Rothstein. Rothstein is reported to have set up a side business selling shares in settlements. Investors would buy out structured settlements from clients at a discount and in turn receive payments as the structured settlements resolved over time. The problem is that Rothstein may have been selling shares in fictitious settlements and is alleged to have disappeared with anywhere from $200 to $300 million.

Rothstein has been a major contributor to Republican politics in Florida. Ellyn Bogdanoff, a member of the state legislature who was the biggest benefactor of Rothstein’s donations, said today that she would be returning any political donations from Rothstein.

The firm’s website, rra-law.com is currently blank, and the pages linking to Rothstein are now inactive.

UPDATE:

Rothstein is back in Miami and police have surrounded his firm.

• Records Show Rothstein’s Law Firm Gave More than $6 Million to Non-profits Last Year
• Florida Bar Extends Investigation Beyond Rothstein
• Rothstein Firm’s Furnishings to be Auctioned
• More Bad News for Scott Rothstein
• Something Amiss at Rothstein Rosenfeldt Adler

Rothstein’s lawyer says that Rothstein has not fled the country but has gone away to clear his head and will be back at the end of the week. The firm is open for business today but there is some speculation that it will not survive.

UPDATE: Stuart Rosenfeldt, co founder of the firm, has asked the court to dissolve the firm and and appoint a receiver to handle the firm’s finances.

• More Details in Rothstein Story – UPDATED
• Florida Bar Extends Investigation Beyond Rothstein
• Rothstein Firm’s Furnishings to be Auctioned
• Records Show Rothstein’s Law Firm Gave More than $6 Million to Non-profits Last Year
• More Bad News for Scott Rothstein