Latest sentencing in $1.2B Scott Rothstein Ponzi scheme

Five years after a South Florida lawyer went to prison for running a $1.2 billion Ponzi scheme, his financial adviser faced his own sentencing.

In 2010, Scott Rothstein, an attorney with Rothstein Rosenfeldt Adler in Fort Lauderdale was sentenced to 50 years in prison for wire fraud, money laundering and racketeering. His financial adviser, Michael Szafranski, is the latest of more than two dozen people attached to the Ponzi scheme who have been convicted.

Mr. Szafranski was given a two-and-a-half year prison sentence Monday after pleading guilty to wire fraud. His lawyer did not immediately respond to a request for comment.

According to local news sources, Mr. Szafranski paid restitution of $6.5 million five years ago to the victims through the trustee handling the bankruptcy of Mr. Rothstein’s law firm.

His Form ADV shows he has not been a registered investment adviser since 2010. The Financial Industry Regulatory Authority’s BrokerCheck shows Mr. Szafranski received a final regulatory notice in 2008 for failing to file his Form ADVs for 2004, 2005 and 2006.

Mr. Rothstein was accused of selling discounted stakes in fake settlements of sexual-harassment and whistleblower lawsuits, according to a June 2010 Bloomberg article. He allegedly created fake settlement papers, bank statements and personal guarantees with co-conspirators.

Also involved in the case was TD Bank regional vice president, Frank Spinosa, who pleaded guilty earlier this year. The SEC charged he had made a “series of material misstatements and omissions to investors to continue the fraudulent scheme.”