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Rothstein firm COO charged with money-laundering conspiracy - South Florida Criminal Defense Attorney Robert W. Stickney
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Rothstein firm COO charged with money-laundering conspiracy

Rothstein firm COO charged with money-laundering conspiracy

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Scott Rothstein’s right-hand woman at his Fort Lauderdale law firm — chief operating officer Debra Villegas — helped her boss fabricate legal settlements that he sold to wealthy investors, boosting his $1.2 billion Ponzi scheme until its sudden collapse last October, prosecutors said Tuesday.

Villegas, charged with a single count of money-laundering conspiracy, becomes the first alleged co-conspirator named in Rothstein’s investment racket, the largest financial fraud in South Florida history. He pleaded guilty to racketeering charges in January.

Prosecutors charged Villegas, 42, with scheming with Rothstein to siphon Ponzi proceeds from investors’ trust accounts at Toronto Dominion Bank and Gibraltar Bank “to convert the money to the use and benefit of members of the conspiracy.”

Rothstein allegedly rewarded Villegas — accused of forging the names of “fictitious plaintiffs and defendants on the purported confidential settlement agreements” — by buying her a house in Weston and a 2009 Maserati Granturismo Coup. Prosecutors are seeking to seize those assets as well as $1.2 million that Villegas pocketed from the alleged scam, according to a criminal information filed in Fort Lauderdale federal court.

Villegas also made large political donations in her name with proceeds from the Ponzi scheme, according to sources familiar with the case, but she has not been charged with any campaign finance law violations.

Villegas is expected to plead guilty to the single money laundering count, which carries a sentence of up to 10 years in prison.

She has been cooperating with the ongoing federal investigation, said her attorney, Robert Stickney, who declined further comment.

Other former employees of the bankrupt 70-attorney Rothstein Rosenfeldt Adler law firm are also expected to face charges, sources said.

Among those under scrutiny: name partners Stuart Rosenfeldt and Russell Adler; another senior partner, Steven Lippman; chief financial officer Irene Stay; and general counsel David Boden. Attorneys for those ex-RRA employees have denied that their clients did anything wrong.

Rothstein, 47, pleaded guilty in January to five charges of conspiracy, racketeering, money-laundering and wire fraud for duping wealthy investors over the past four years by selling them bogus civil settlements based on sexual harassment and whistle-blower complaints.

He could be sent to prison for up to 100 years at his sentencing in June — though his assistance in an FBI sting operation that recently took down an accused Italian mafia figure from Miami Beach could help reduce his incarceration.

Villegas rose from being a paralegal with no college degree to serving as the top operating officer at Rothstein’s firm, where he described her to colleagues as his second-in-command. Rothstein paid her more than $120,000 a year.

Villegas had been a curious figure at the law firm even before Rothstein’s scheme crashed in late October. Her best friend, RRA lawyer Melissa Britt Lewis, was slain in March 2008. Villegas ‘ estranged husband, Tony Villegas , a train conductor, was charged and is being held at the Broward County jail.

One month after the slaying, Rothstein bought Villegas the 2,600-square-foot Weston home for $475,000, court records show. Using a corporation called WAWW4 for the purchase, he deeded the property to her for $100 last July. WAWW4 stood for What a Wonderful World.

In October, just days before RRA imploded, Villegas took out a $100,000 mortgage on the home at 380 Carrington Dr., court records show. Federal prosecutors have moved to seize the Weston property and other Rothstein assets, saying they were purchased with proceeds from the Ponzi scheme.

Villegas was among several law firm employees who gave substantial contributions to state and federal politicians at Rothstein’s direction. Prosecutors have said Rothstein’s bundling of donations was tied to employee bonuses.

Campaign finance records show Villegas donated more than $43,000 to the McCain-Palin 2008 presidential ticket, the Rudy Giuliani GOP primary run for president that year, Gov. Charlie Crist’s bid for the Republican U.S. Senate nomination, as well as the campaigns of former Florida Sen. Mel Martinez and Sen. Arlen Specter, D-Pa.

Villegas has not spoken publicly since news of Rothstein’s scam surfaced over Halloween weekend after he fled to Morocco. But she was recognized as one of Rothstein’s closest confidantes.

Villegas first worked with Rothstein in the 1990s, when the Nova Southeastern University law graduate had his own firm specializing in labor and employment litigation. Villegas followed him to another firm, Phillips, Eisinger, Koss, Rothstein & Rosenfeldt, where they both worked from 1999 to 2001. The next year, Villegas followed Rothstein yet again when he left to establish a firm with Rosenfeldt.

Court records from her divorce petition filed in 2007 show she was earning $124,635 a year as RRA’s chief operating officer.

At RRA, her office was inside Rothstein’s secured inner sanctum behind a locked door, where visitors had to announce themselves through an intercom. When federal agents raided the law firm in November, they took records from Villegas ‘ office.

E-mails that Rothstein wrote to his staff last year show that Villegas was part of the circle that protected him.

In one e-mail in October, he reminded the firm’s lawyers that Villegas was his “second in command.”


Villegas also had a close financial relationship with Rothstein. Court records from the divorce case show that he paid for her couch and bedroom set, along with her two water bikes. Records also show that her employer — though it doesn’t identify who — gave her a Rolex watch and a Brietling watch. Rothstein was a fan of luxury watches.

Read the full Miami herald article at its original location here.