Scott Rothstein has been taken into federal custody and will be charged today by federal authorities, according to widespread media reports.

The Miami Herald and CBS4 News showed video of Rothstein being walked into the FBI’s offices in North Miami on Tuesday morning.

Rothstein, once the chairman and CEO of a 70-lawyer firm, has been under investigation since returning from Morocco on November 3. He had fled the country while investors in his fake lawsuit-settlement scheme demanded money back.

Part of the image that Rothstein cultivated was that of a mafia-like kingpin. He wore zoot suits, employed a squad of security guards, and prominently displayed a book called Assassins by his desk.

Although the image fits with the emerging story of his $1 billion Ponzi scheme, is it real? This is one of the questions federal agents investigating him are likely trying to answer. Did Rothstein use the mob and mob mystique, or did the mob use Rothstein?

“People like Rothstein have been bilking the American public in the name of organized crime for some time,” said Bruce Bagley, chairman of the international studies department at the University of Miami. “Whatever else he was, Rothstein was the front man in a very complex scheme.”

Rothstein’s attorney, Marc Nurik, dismissed the idea that his client fostered a mobster image or had any connections to the mob.

“He’s a kid from the Bronx that made good. He liked to dress well,” Nurik said. “To suggest that makes him a kingpin or organized-crime figure would turn dressing well into a membership in the mob.”

The Image

Rothstein’s choice of business and personal associates included cigar sellers, jewelry-store owners, vodka makers, and nightclub and strip-club owners. He also had several associates and people on staff who were either convicted of a crime or had direct ties to criminal cases:

• Rothstein hired former Broward County Sheriff Ken Jenne right after he served his jail sentence.
• Rothstein friend Ovadia Levy is the son of Shimon Levy, who was identified in media reports as having ties to Israeli organized crime. Shimon Levy was a business partner to Zvika Yuz, who was shot in his Mercedes-Benz outside the Sea Club Ocean Resort on Fort Lauderdale’s beach in May 1997.
• The Business Journal was first to report that Rothstein’s biggest investor, George G. Levin of the Banyon funds, ran a company called GGL or Classic Motor Carriages that was charged with fraud in the mid-1990s. GGL pleaded guilty to wire fraud.
• In a recent lawsuit filed by investors, Levin’s business manager, Frank Preve, was identified as a convicted felon in a financial fraud. The lawsuit, handled by attorney William Scherer, alleged that Preve worked at Rothstein’s firm, Rothstein Rosenfeldt Adler, but Levin denies that.
• Rothstein’s firm was representing the Cheetah strip club in Hallandale Beach after it was shut down following a police raid.
• These details are adding up, Bagley said, to paint a picture of someone who was at least courting the image of a kingpin.