EFTA00724098.pdf

fliSTEIN FALLOUT Bank, hedge fund s included Deep-pocketed defendants added to investors'lawsuit byluileitay ikaraelm.oxe Investors who claim they lost $125 million in Scott Rothstein's Penal schem added a number of bigh•prothe defene dants Thesday to a lawsuit 'getting racer-- . The latest version of the suit names Private Bank. financial are. hedge funds and accountantsadds who - worked for Rothstein. In a second amended complaint flied by Razorback Funding and others, Fort ROTHSTEIN FALLOUT Lauderdale attorney Wiliam Scherer cast his net farther in the $1.2 billion fraud Lawyer adds more::. wt through Rothstein's former law (inn, Rothstein RosenWdt Adler. The 1,329-page complaint filed in Broward Circuit Court sin lists Rothstein defendants to la• wsuit as the load defendant but expands to Coral Gablesbased Gibraltar for allege dly allowing millions of dollars of Rothstein's illicit funds to pass through the bank byJulie Kay, DBR. visas and hedge Mix*: while underlings raised red flags. Investors who claim they The book-lengthcorn- Also named in the new suit are Tracy tatifihlt lost $125 million inScott welntraub. Gary Berkowitz and Brian Fort Lauderdale attorney Wilhite Scherer said plaint filed by attofit ; Leitstein, Fort Lauderdale accountant he would love to ask Scott Rothstein ft he had Rothstein's $12 billion • William Scherer tif.Conrad with Bereafeld Spritzer Shechter & Sheers an exit strategy. Ponzi who worked closely with Rothstein, & Scherer casts a wider net such hedge funds as Platinum Partnand the complaint after being named in other scheme.. • in its quest to recover fluids value Arbitrage Fund and Centurion ers lawsuits and newspaper articl es ing called for depositions by theand be- filed an for victim-investors: The' Structured Growth. attorneys. bank- -We have more defendants and a lot amended ....complaint also offers more more evidence to support the claims Scherer said he hopes this will be the complaint evidence to suhgantiate made eaten" said Scherer of Conradwe final complaint and is hoping as go to trial & in January before Circuit Judge Tuesday;. claimattgainst Scherer Jeffery Gibraltar spokesman Peter Whalen Streit:6dd. adding toplieutenants at his for-, said the Investors' recovery effort Ls 'un- The initia l versio n was Bled last Nov. Scherer high- per law firm sad others. derstandable, But "what is not under- 20. Rothstein was arrested Dec. 1 and standable is attempting to blame Gibraltar accus ed of operating a $1.2 billion Ponat -profile Mid- • The firm dissolved amid . for Mr. Rothgein's misdeeds. The taw scheme that sold phony settlement fi- deep-pocket defendants- • charges that Rothstein ran firm of Rothstein Rosenfeldt Adler main nancing based on forged judicial orders. including Cattaltar Bank, the fraud through the firm,. tamed traditional banking accounts with- The 47-year-old pleaded guilty to five Gibraltar for law firm opossums and, In federal counts Jaa 27 and Ls due to be accountants, finandial ad- SEE STORT,PAGE AI . regard to these accounts. the bank upheld sentenced May 6. all Oils regulatory duties? Scherer announced the new complaint Rothstein invested in the bank. whida at a lunch benefiting the Boys &Girls Club has offices in Miami. Fort Lauderdale, of Fort Lauderdale at which he was the Naples. New York. Ocean Reef and South keynote speaker. Miami. When asked what he. would ask to Bank and senior vice presi- Rothstein first in a deposition. Scherer dent Frank Spinosa. Mother bank for replied, 'What were you thinking? What Rothstein's firm, was sued in a previous was your exit strategy?" He added, "Every version of the complaint. one of these fizudsters lacks an ezdt strat- • The banks allegedly provided lock letters"— a term Sdierer's team believ Scherer also was asked why he be- Rothstein devised — to show to invese- lieves federal prosecutors have not tors to satisfy them that their money was charged anyone besides Rothstein. safe. 'They are building their, case.against A representative of the accountants the low hanging fate he said 'They are said they had not salon the complaint but busy trying politicians. The federal gov- a statement would be forthcoming. It was ernment doesn't have the same resources not received before deadline. we do, with our team of lawyers? In an explosive deposition last month With the new defendants — notably for the law Orm's bankruptcy attorneys. the hedge funds — Scherer said he be- Berkowitz said he regretted not rais- lieves he will find enough money to com- ing more red flags his dealings with pensa victi Rothstein. "Wete havems.added deep-pocket defen• The complaint also listed as defen- dents." he seat I believe there will be dants Seismal. Capital Management, enough deep pockets M fill the hole? Barry Bekkedam, Pearson & Associates Finally. Sch.ter was asked by the and Richard Pearson — all financial well-heeled crowd how they could avoid ad. risers that Scherer and his team allege becoming victims of a Pont scheme. He placed clients in Rothstein Investments. said he Milt have much advice to offer Vahan asked if he alleged the banks besides "keep using your same business and financial advisers committed judgment You know that risk equal of commission or omission. Scherererror s ward. Ws easy to say the investorss re- said, greedy Bus this guy hoodwink are "bona? ed a lot lie said he doubted if any of the defen of people. Ha was good.. He was real dants would be surprised to be named In- Peer • EFTA00724098  WARREN R. TRTZENFELD, P.A. ATTORNEY AT LAW April 16, 2010 Robert D. Craton, Jr. Bunnan,Caitton, Lutttier & Coleman, LIP 303 Bayan Blvd Suite 400 West Palm Beach, FL 33401 RE: Jeffrey Epstein v. Scott Rothstein, et al. Dear Mr. Litton: Enclosed is a copy of the counterclaim I filed as requested in your letter dated March 29, 2010 which has been stayed by the bankruptcy proceeding. You should also know that a declaratory action has been filed in the bankruptcy seeking to void the malpractice policies based upon misrepresentations allegedly made in the insurance application. Due to the bankruptcy filing and the coverage issues, I have not taken any discovery. I have no knowledge with regard to the names mentioned in your letter. I regret I could not be of more assistance to you. Very truly yours, IL TRAZENFELD, P.A. By: Warren IL Trazenfeld, Esq. WRT/hm Enc. CERTIFIED MEDIATOR CERTIFIED IN LEGAL PROFESSIONAL LIABILITY 3225 Aviation Ave., Suite 600, Miami, Florida 33133-4741 Tel 305.860.1100 Fax 305.858.6123 EFTA00724099  IN THE CIRCUIT COURT OF THE 17TH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA Case No: CACE0937836(05) ROTHSTEIN ROSENFELDT ADLER, P.A., a Florida professional Florida Bar No: 317071 Association, Plaintiff(s), VS. WHITNEY EDUCATION GROUP, INC., a Florida corporation AND WHITNEY INFORMATION NETWORK, INC., a Florida corporation, Defendant(s) WHITNEY EDUCATION GROUP, INC., a Florida corporation AND WHITNEY INFORMATION NETWORK, INC., a Florida corporation, Counter-Plaintiffs VS. ROTHSTEIN ROSENFELDT ADLER, P.A., a Florida professional Association, Counter- Defendant / COUNTERCLAIM WARREN R. TRAZENFELD, P.A. TrIalWorka EFTA00724100  Case No: CACE0937836(05) Page 2 of 7 The Defendant/Counter Plaintiffs, Whitney Education Group, Inc., ("WEG") and Whitney Information Network, Inc. ("WIN"), sue Plaintiff/Counter defendant, Rothstein Rosenfeldt Adler, P.A. and states as follows: t. This is an action seeking damages in excess of $15,000.00, exclusive of costs. 2. At all times relevant hereto, the Plaintiff/Counter-Defendant, Rothstein Rosenfeldt Adler, P.A. (the "Law Firm"), was an active professional association doing business in Broward County, Florida. 3. The Law Firm represented to WEG and WIN (collectively referred to herein as "Whitney') that it was qualified to represent Whitney as litigation counsel with regard to claims made by M Barry Strudwick and Susan Weiss and others related to Monterey del Mar, S.A., a Panamanian company ("MDMSA"). 4. Whitney, relying upon the aforesaid representation of the Law Firm, retained the Law Firm to provide legal representation to Whitney. 5. The Law Firm owed a duty to Whitney to exercise that level of skill and care which, in light of all relevant surrounding circumstances, is recognized as acceptable and appropriate by similar and reasonably careful litigation counsel 6. In December 2006, upon the advice of the Law Firm, Whitney filed suit in the United States District Court for the Eastern District of New York (the "New York Litigation") against Weiss for defamation. Weiss filed a counterclaim seeking $2.5 million In compensatory damages and punitive damages in an amount exceeding $7.5 million. WARREN R. TRAZENFELD, P.A. Tr',Marks/ EFTA00724101  Case No: CACE0937836(05) Page 3 of 7 7. On January 31, 2008, Strudwick and Weiss filed suit against Whitney, and others, in Maryland state court for defamation, injurious falsehood, abuse of process, tortlous interference with prospective business advantage, and invasion of privacy. The case was removed to the United States District Court for the District of Maryland. The claims relate to acts and statements surrounding the attempt by Strudwick to develop and sell real property in Costa Rica and Weiss' attempt to seize control of MDMSA. On October 27, 2008, Strudwick and Weiss filed a First Amended Complaint adding Rothstein Rosenfeldt Adler, P.A. and Scott Rothstein as defendants. On January 5, 2009, the lawsuit was removed to the U.S. District Court for the District of Maryland. 8. The claims made against Whitney by Strudwick and Weiss In the Maryland litigation were directly related to the negligent advice provided by the Law Firm, and the actions taken by the Law Firm, which breached its duty to Whitney by: A. Filing the New York Litigation which was frivolous and defamatory. In response to a motion for sanctions in the New York Litigation, Rothstein filed a notice of discontinuance. As a result, the New York Litigation was dismissed by the New York Federal Court on August 2, 2007; B. Authorizing the posting of the complaint from the New York Litigation on the Internet, along with defamatory statements that, among other things, accused Strudwick of being "busted" for "conspiracy, fraud, civil RICO, racketeering and mail fraud" before the New York Litigation was filed; C. Authorizing the distribution of brochures at hotels in Costa Rica, where potential Strudwick customers were known to be staying, which falsely stated WARREN R. TRAZENFELD, P.A. Trle/Yorks/ EFTA00724102  Case No: CACE0937836(05) Page 4 of 7 that Strudwlck had been "busted" for "conspiracy, fraud, civil RICO, racketeering and mail fraud"; D. Sending an e-mail on December 22, 2006 authored by Scott Rothstein on behalf of the Law Firm, a copy of which is attached hereto as Exhibit "A", falsely asserting that he had filed a lawsuit against Strudwick in New York, that he was "setting" Strudwick's video deposition in the New York litigation, which had not yet been filed, "immediately" and that he would immediately take a video tape deposition. Rothstein went on to accuse Strudwick of being involved in "a pattern and practice of illegal activities ... as well as other unlawful business dealings, for the sole purpose of illegal gain" and of lies and deceit." Rothstein further threatened to continue to sue Strudwick "in every available jurisdiction," stating that, unless Strudwick withdrew from "the Monterey project," Rothstein would burden Strudwick with numerous court actions that were "certain to be protracted, expensive and embarrassing." In fact, at the time of the e-mail, the New York Litigation was not filed and could not have been property filed by Rothstein who is not a member of the New York bar; E. Approving the conduct of Michael Caputo and his company in posting and implementing a defamatory Website entitled "BARRYBUSTED.COM" with a URL address of "barrybusted.com". Caputo created the website at the direction of the Law Firm and its affiliated company Rothstein Rosenfeldt Adler Consulting Group. The Website attacks Strudwick's ability and integrity in his business by asking readers, "Are you thinking about investing with Barry Strudwick?" and telling readers that they should "THINK AGAIN." The Website then WARREN R. TRAZENFELD, P.A. TrialWorksl EFTA00724103  Case No: CACE0937836(05) Page 5 of 7 tells readers that "Barry and his partner William Ramirez are being sued in Federal Court in New York for conspiracy, fraud, civil RICO, racketeering and mail fraud"; F. Filing a complaint in the New York Litigation, which was drafted by Rothstein as an authorized agent of the Law Firm, that made defamatory statements concerning Strudwick and Weiss that were posted on the Internet, Including. but not limited to the following: a. Strudwick committed violations of the Racketeering Influence and Corruption Organization Act and falsely states that Strudwick, among others, "used [MDMSA] to commit criminal acts, including extortion, mail fraud and wire fraud; b. Strudwick and his business partner William Ramirez Leon "concocted [a] conspiracy to illegally wrest control of [MDMSA]'; c. Strudwick "agreed and combined with and assisted Susan Weiss ... in obtaining control of [MDMSA] through illegal, Improper and fraudulent means"; d. Strudwick, with his business partner, executed a "fraudulent letter of intent with Susan Weiss to purchase the assets of [MDMSA] despite the fact that Susan Weiss had, and has no authority to sell these assets because she lacked a controlling interest in, and was not duly elected president of Monterey Delmar, S.A."; e. Weiss committed violations of the Racketeering Influence and Corruption Organization Act and that Weiss, among others, "used [MDMSA] to commit criminal acts, including extortion, mail fraud and wire fraud;" f. Strudwick "agreed and combined with and assisted Susan Weiss ... in obtaining control of [MDMSA] through illegal, improper and fraudulent means;" WARREN R. TRAZENFELD, P.A. TilolWorks/ EFTA00724104  Case No: CACE0937836(05) Page 6 of 7 g. Susan Weiss "falsely held herself out as controlling a majority of the shares of [MDMSA). This was and continues to be a blatant lie for the purpose of attempting to seize and maintain her illegal control over [MDMSA)" ; and h. Susan Weiss "staged an illegal shareholders meeting in Panama" which she "had no authority to call" and for which she "unlawfully withheld notice from the true majority of the shareholders, including Whitney in violation of the express mandate of the Operating Agreement of MDMSA and the laws of Panama." 9. As a direct and proximate result of the breathes of the duty owed to Whitney by the Law Firm, Whitney was damaged. Whitney was faced with damages exceeding Thirty Five Million ($35,0000,000) Dollars as a result of the Law Firm's negligence. To minimize the damages caused by the Law Firm, Whitney settled the claims against it for Three Million Eight Hundred Thousand ($3,800,000,00) Dollars. WHEREFORE, Whitney demands judgment for compensatory damages against the Law Firm, for the costs of this action, a jury trial on all issues so triable, pre- judgment interest, attorneys fees for the underlying litigation pursuant to the wrongful act doctrine and for such other and further relief as this Court deems just. WARREN R. TRAZENFELD, P.A. TrWWorksl EFTA00724105  Case No: CACE0937836(05) Page 7 of 7 I HEREBY CERTIFY that a true and correct copy of the above and foregoing was served via facsimile and U.S. mail this ke day of November, 2009 upon all persons on the attached service list. WARREN R. TRAZENFELD, P.A. By: Warren R. Trazenfeld, Esq. Attorney for Defendants/Counter Plaintiffs Bayview Executive Plaza 3225 Aviation Avenue Suite 600 Miami, ' - 41 E-Mail: Telephone: Facsimile: WARREN R. TRAZENFELD, P.A. TrletWorice/ EFTA00724106  Case No: CACE0937836(05) Service List Shawn L. Bicker', Esq Rothstein Rosenfeldt Adler, P.A. Attorney For: Plaintiff 401 East Las Olas Blvd Suite 1650 FL Lau 1 Pho Fax: Herbert Stettin, Esq. Receiver for Rothstein Rosenfeldt Adler 5401 Hammock Drive Coral - 105 Phone: Fax: Kendall Coffey, Esq Coffey Burlington PL Attorney for Plaintiffs 2699 South Bayshore Drive Penthouse Miami, FL 3 Telephone: EFTA00724107 EXHIBIT A EFTA00724108  Pagel of 5 Candles Martin Prom: Scott Rolhatekquothstelnarre•lave.comi Sent: Friday, December 22,2006 6.09 PM To: --Betry-Sendedoir,-ScoltRoMMellf ----- Co: Cad Under; medeo?dittomewtd!bly:M018_ 041.10.bkreri----------------: ' —' lubjeir:Kieereer Dear Mr. Strudwick, As you should be aware via the lawsuit filed in New York against you, Susan Weiss, and your fellow co-conspirators, this firm is senior litigation counsel to the Whitney Group of companies. As you are well aware, you, Susan Weiss, and your co- conspirators, have been involved in a pattern and practice of illegal activities with regard to the above mentioned project, as well as other unlawful business dealings, for the sole purpose of illegal gain and to cause substantial injury to investors other than you and your co-conspirators. Your activities are well documented and are clearly unlawful. As you may or may not be aware, we have been conducting a detailed confidential investigation of you and your co- conspirators for an extended period of time. Our investigation has revealed that you are engaged in activities in direct violation of the banking laws of the United States, in direct violation of the laws of Panama and Costa Rica, and in direct violation of a myriad of other laws of the United States, including, without limitation, the Civil Remedies for Criminal Activities Statute. Further, your actions and inaction, along 1118120613 EFTA00724109  Page 2 of 5 with that of your co-conspirators brings you well within the ambit of the State and Federal Civil Rico statutes. As you should now be aware, the lawsuit against you and your cp.- -- conspil atom now includefriultifire counts implicating all of . you in-a-conspiracy-of-rtnprecedented e...Moreo3ler, will not only continue to add to and amend the lawsuit until such time as all remedies available are exhausted but we intend to pursue you and your co-conspirators in every available jurisdiction. I have been instructed to immediately and vigorously pursue all legal remedies available to bring your activities and those of your co-conspirators to an immediate halt, to bring your activities and those of your co-conspirators to the attention of the appropriate authorities, and to insure that you and your co-conspirators are punished to the full extent of the law. Further, I have been instructed to insure that all shareholders that have suffered injury at your hands and at the hands of your co-conspirators be fully and fairly compensated. Moreover, we have researched the applicable law and your actions dearly mandate the imposition of punitive damages and thus we will be seeking same. Additionally, you are advised that we intend to continue to add defendants to our actions against you and your co- conspirators until we are certain that anyone and everyone involved is a named defendant and thus, held fully accountable for their actions. Our investigation has revealed that information relevant to our 1/18/2008 EFTA00724110  Page 1 of 5 actions against you and your co-conspirators is in your care, custody and/or control. Thus, we hereby demand that you immediately secure, sequester, and preserve all documentation in yourpossessionrcustridy' ild/of EcTrilial related to the above-refereneed-project-ernifyourillEgrd/iflaThrvitilRtilies. — Sightocumentation ihirinclude, without limitation, all records of any type, in any format, whatsoever, whether electronic, handwritten, photographic, voice recorded or otherwise. Such documentation shall include, without limitation, all e-mail, hard drives, pda's, floppy discs, text messages, other forms of recording and/or correspondence, handwritten notes, data of any type regardless of storage mechanism and voice mail. Such documentation shall include, but not be limited to, all communications with any of your co- conspirators, any and all shareholders, any and all persons with knowledge of any of your actions and the actions of your co-conspirators, any and all attorneys including without limitation, Jaime Darenblum, all bank records, ledgers reflecting any monetary transactions, travel logs, passport information, proof of travel documentation, identifies of all co- conspirators, locations of bank accounts, telephone logs, financial transfer logs, corporate records, corporate minutes, and the like. You are advised that you have an absolute obligation pursuant to state and federal law to maintain all records pertaining to the above referenced project that fall within your care, custody or control, in their exact condition without manipulation, as such constitutes evidence in a case against of which you have knowledge. Destruction or manipulation of such I/18/2008 EFTA00724111  Page 4 of 5 evidence/records would constitute spoliation of evidence. Any attempt to alter or destroy any such evidence will be dealt with in the harshest manner available to this _firm throuzh the _. courts-.- — --- PIere bi vised-that we are well aware of your pattern and practice of lies and deceit as it relates to this project and other business transactions. However, unlike the manner in which you were permitted to escape liability for your illegal activities in the past, I have been instructed to pursue you and all your co-conspirators until all remedies available have been achieved. You may rest assured that you will be pursued accordingly. I am planning on setting your deposition immediately. Thus, please have your attorney contact the undersigned immediately to arrange same. If I do not hear from your attorney by Tuesday, I will simply set your deposition unilaterally and pursue your attendance through the courts. Further, you are to immediately cease all contact with anyone related to any of the Whitney companies. All correspondence should be directed to the undersigned and Carl Linder. Finally, I expect you to cease all actions pertaining to the Monterey project. Failure to comply will result in further legal action that is certain to be protracted, expensive and embarrassing. I look forward to meeting you at your deposition. Please I/18/2008 EFTA00724112  Page 5 of 5 advise your attorney that I intend to take the deposition using videotape so that I can use same as is mandated by your actions. 1/18/2008 EFTA00724113