Summary: A list of five lawyers who got caught operating major Ponzi schemes.
The Pharm Bro, Martin Shrekli, made headlines at the end of 2015 for his Ponzi scheme arrest, and HBO is releasing a Bernie Madoff biopic this year. But it’s not just finance guys who are capable of fraud. Lawyers can get in on the action too.
The following is a list of devious lawyers who were charged with running huge Ponzi Schemes.
Charles Bennett
In October of 2015, former lawyer Charles Bennett pleaded guilty in Manhattan federal court to securities and wire fraud. For five years, he ran a $5 million Ponzi scheme, and he confessed to the crime in a detailed suicide note. Bennett had tried to commit suicide in 2014 by jumping into the Hudson River. He was rescued, and authorities later found his suicide note in his hotel room. In an act of extreme misfortune, his suicide note contained a detailed confession of his crime, and he was subsequently arrested. For the full story: https://www.jdjournal.com/2015/10/30/lawyer-who-confessed-to-ponzi-scheme-in-suicide-note-pleads-guilty-to-fraud/
New York authorities rescue Charles Bennett from the Hudson River in 2014. Photo courtesy of NY Daily News.
Michael McNerney and Anthony Livoti Jr.
Michael McNerney and Anthony Livoti Jr. were two well-respected Fort Lauderdale, Florida lawyers before they were indicted in 2009 in a $1 billion Ponzi scheme known as Mutual Benefits. Mutual Benefits bought life insurance policies from the terminally ill, the elderly, and people with AIDS. It made money if the policyholder died ahead of schedule or on time, but–GASP–science prolonged the lives of many people, thus destroying their icky business model. The company eventually started paying premiums with money from new investors to keep the venture afloat. For the full story: https://www.jdjournal.com/2009/01/25/more-notable-lawyers-involved-in-more-ponzi-schemes/
The men of Mutual Benefits. Michael McNerney is to the left of con man Joel Steinger (center, blue tie). Photo courtesy of Broward Palm Beach.
Scott Rothstein
In 2010, Scott Rothstein of Florida was sentenced to 50 years in prison for operating a $1.2 billion Ponzi scheme. Rothstein’s scheme involved selling investors discounted stakes in settlements of sexual-harassment and whistleblower lawsuits. He promised investors the full proceeds once the cases were settled. Instead he used the money from new investors to pay back old ones. He also used the money he made from his scheme to fund his 70-attorney law firm, Rothstein Rosenfeldt Adler
Arthur G. Nadel
In 2009, Arthur G. Nadel turned himself in to the authorities after being on the run for two weeks. The disbarred attorney-turned-financial manager was accused of running a $200 million Ponzi scheme. Nadel who was in his 70s when the shit hit the fan was disbarred in the 1980s because he allegedly stole client escrow funds. The idea that anyone would give that guy money to manage is beyond me, but they ended up paying for it, I guess. For the full story: https://www.jdjournal.com/2009/01/28/disbarred-attorney-caught-in-madoff-web/
