A federal appeals court said that funds held in bank accounts of convicted Ponzi schemer Scott Rothstein’s bankrupt law firm can’t be forfeited to the government, Bloomberg News reported yesterday. The money in the law firm accounts, mixed with receipts from clients at the time Rothstein was charged, isn’t subject to forfeiture, the Atlanta-based U.S. Court of Appeals said today, reversing the lower court and handing a victory to the trustee of the law firm’s chapter 11 proceeding. The funds are so intermingled that it’s difficult to determine which money is from the Ponzi scheme and which is from the legitimate business of now-defunct Rothstein, Rosenfeldt & Adler PA, the Fort Lauderdale, Florida-based firm which included billings from 70 attorneys, the court ruled. Rothstein is serving a 50-year sentence for selling investors stakes in sex- and employment-discrimination cases that turned out to be non-existent. The scheme imploded in the fall of 2009. He pleaded guilty to five counts of money laundering, fraud and racketeering in 2010.
