Rothstein Charged in Ponzi Scheme

Posted by Jason | Posted in Government | Posted on 02-12-2009

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I’m not going to defend this guy, but the whole story of the government convicting someone of a ponzi scheme is so ironic.

Federal prosecutors filed criminal charges against Scott Rothstein, accusing the once prominent Florida lawyer of running a $1.2 billion Ponzi scheme.

Mr. Rothstein, who pleaded not guilty in court Tuesday, faces five felony counts, including wire fraud and federal racketeering. He allegedly sold stakes in fictitious settlements he claimed his firm had struck in employment disputes, such as sexual harassment and whistleblower claims, according to the U.S. attorney’s office in Miami.

Prosecutors allege that Mr. Rothstein was aided by conspirators who weren’t identified in the government’s filing.

Mr. Rothstein allegedly used funds from new investors to pay back previous investors

via Rothstein Charged in Ponzi Scheme – WSJ.com.

Isn’t the government supposed to prevent this type of thing from happening? Of course, the government cannot protect you from anything. It can only come in after a crime has been committed and play hero of the day. The problem is because the government involves itself so much in our lives, people assume it is going to protect them. They then are less skeptical about investments and many other decisions. Because the government wrote a law against something, they think they don’t have to worry. As is always the case, they are dead wrong. It’s no different than not owning a gun, because you think the police can save you. Criminals don’t obey laws, and believing the government is your protector only leaves you defenseless.

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