- Associated Press - Wednesday, July 29, 2015

FORT LAUDERDALE, Fla. (AP) - An investment adviser on Wednesday become the latest of more than two dozen people to plead guilty in the $1.2 billion Ponzi scheme operated by disbarred attorney Scott Rothstein that collapsed more than five years ago.

Michael Szafranski, 37, pleaded guilty in Fort Lauderdale federal court to a single wire fraud conspiracy charge, which carries a maximum five-year prison sentence but under federal guidelines - and because of Szafranski’s cooperation against others in the scheme - he’s likely to get three years or less.

U.S. District Judge William Dimitrouleas set sentencing for Oct. 21.

“It’s up to me to decide what a sufficient and just sentence is, do you understand that Mr. Szafranski?,” Dimitrouleas asked.

“Yes, your honor,” Szafranski replied.

Prosecutors say Szafranski lured investors - some of them members of his own synagogue - to Rothstein through a variety of deceptions, including assurances he reviewed confidential legal settlements that did not actually exist. Rothstein’s scam was based on offering investors high returns for putting their money into settlements that turned out to be fake.

“In fact, there were no plaintiffs and there were no confidential settlement agreements,” said Assistant U.S. Attorney Lawrence LaVecchio.

The charge against Szafranski is based on a $555,000 loss suffered by one investor and her family, according to court documents. Most investors have gotten their money back through seizure and sale of Rothstein assets and other means.

More than two dozen other people have been convicted in the Rothstein scam, operated out of his former Fort Lauderdale law office until its October 2009 collapse. Rothstein himself is serving a 50-year prison sentence after pleading guilty, but his sentence could eventually be reduced because of his cooperation in investigating others.

Although more people could still face charges, the lone remaining defendant for now is former TD Bank executive Frank Spinosa who is scheduled for trial in October. Rothstein and his law firm had 38 accounts at TD Bank.

Prosecutors say Rothstein used Spinosa to assure investors their money was safe and lure them into investing in more of the phony settlements. Among other things, according to a grand jury indictment, Spinosa signed so-called “lock letters” assuring seven groups of investors that payments from trust accounts was earmarked only for them - inducing them to invest more than $250 million in the fraudulent settlements.

Spinosa has pleaded not guilty to wire fraud and conspiracy charges and is free on $250,000 bail.


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