Top Five Things Overheard During Broward County Ethics Training

31 May

The Broward County Commission is spending the day with ethics experts today as part of morality training mandated by voters in the new ethics code.

Stacy Ritter, Ilene Lieberman and the rest of the bunch will learn from the likes of former State Supreme Court Justice Gerald Kogan, new Broward Ethics Czar John Scott, municipal attorney Sam Goren (say what?), and other ethics champions.

Here are a few of the more curious comments overheard during the training:

5. But I use my married name when I lobby cities in my district for developers.  That way it doesn’t count.

4. My campaign isn’t allowed to pay my husband’s lobbying office phone bills? Nonsense.

3. Ron Book is my daughter …. (slap) he’s my sister … (slap) he’s my sister, my daughter … (slap) he’s my sister and my daughter!

2. You don’t understand, it was a very old golf cart.

1. But the Florida Commission on Ethics said I could!

Broward Health: Deeper Into The Federal Investigation

31 May

The federal investigation into doctors contracts at the North Broward Hospital District — aka Broward Health — has been a long time coming.

The investigation by the Department of Health and Human Services is looking into whether America’s sixth largest public health system has violated federal Stark laws, or anti-kickback statutes.

Those laws are in place to guard against health agencies hiring doctors at inflated rates in order to reap excessive profits from those doctors’ referrals. The law effectively aims to keep competition alive and guard against excessive and unnecessary treatments.

The evidence against the district — which collects $200 million from the property tax rolls — has been mounting. As my former colleague Thomas Francis reported in 2009, NBHD’s former general counsel, Marc Goldstone, wrote a memo to board members saying the district would be hard-pressed to defend itself against allegations that it was violating the Stark law.

Another strike against the district — it has for a long time blatantly overpaid many of its favored doctors. Long-time NBHD critic John De Groot, who investigated the agency while he worked with the Florida Attorney General’s Office, has determined that the district loses an average of $413,000 on each doctor contract, a loss of about $20 million a year. Of course, they can afford to do that what with all those free tax dollars and all.

Why would a health system created to treat indigent patients that fall through the cracks be trying to take over the health care market? That may be the biggest problem of all. Broward Health wants to be an empire. It wants to take over the market and, unlike private and non-profit facilities, it has hundreds of millions of tax dollars to help it achieve that. With five hospitals under its banner, including flagship Broward General, it’s a market monster — and indigent patients have become a footnote.

More on this as it comes in. Here’s the list of doctors the feds have subpoenaed NBHD for contracts and other information:

Julian Berman, Arnoux Blanchard, William Burke, George Caldwell, Dominic Carreira, Michael Chizner, Yira De La Paz, Carl Gill, Kevin Kessler, Sein Lwin, Archana Maini, John McAuliffe, Violet Atanasoski-McCormick, Matthew Moretti D.O., Monisola Oni, Randell Powell, Amy Relkin, Hector Rodriguez-Cortes, Rudolph Roskos, John Rozanski, Ashok Sharma, Amos Stoll, Neil Tucker, Israel Wiznitzker, Erol Yoldas, Shazia Zafar, North Broward Othopedic Associates.

Sunday Post: Karma Catches Up With Kusnick

29 May

Veteran attorney Howard Kusnick is scheduled to surrender for his part in the epic Scott Rothstein fraud on Tuesday at the federal courthouse.

Kusnick, left, with his son, far right, and a friend

The former lobbyist and political player is alleged to have used his attorney status to help Rothstein orchestrate a $57 million scam on prominent car dealer Ed Morse involving a civil lawsuit. To help trick the Morse family into turning over millions of dollars, Kusnick posed as an attorney for a third party whom he didn’t represent at all. Amazingly, Kusnick even sent the Morses a signed letter to further the ruse.

The Morse money was used to pay off previous investors in Rothstein’s billion-dollar Ponzi scheme. While Kusnick claims he had no idea about the Ponzi, he has cooperated with federal officials and has cknowledged committing the audacious crime against the Morse family. Here’s a brief statement issued by his attorney, Miami’s Kendall Coffey:

“Although Howard Kusnick was completely unaware of Rothstein’s Ponzi scheme, he accepts full responsibility for the wrongful actions he took. Howard is deeply remorseful and apologizes to all concerned, including his family from whom he has withheld the truth about his wrongdoing.”

Of all the lawyers close to Rothstein, none worked with him longer than Kusnick. The two men formed a law firm together in Sunrise two decades ago. Kusnick & Rothstein was in business from 1991 through 1998, years during which Rothstein was a workaday employment lawyer living in a middle-class home in Plantation with his first wife. Kusnick was higher-profile at the time, representing garbage companies and playing an active role in the politics of Sunrise.

But if you listen to what people are saying about Kusnick, you might think he helped teach Rothstein a lot of his dirty tricks. Former Sun-Sentinel political columnist Buddy Nevins calls Kusnick a lying “piece of slime” and Sunrise Commissioner Sheila Alu, who is also a state prosecutor, says flatly that Kusnick is “evil.”

Alu

Alu has good reason to say such a thing. When she challenged the garbage contract held by Kusnick’s employer, All Service Refuse, the attorney went on a campaign to intimidate and smear her in the press. He even hired a private detective to track her who ran her off the road and circled her home at odd hours.

“He pulled my divorce file and sent to reporters, he had a private investigator follow me,” Alu told me. “Kusnick intimidated and harassed me. He is the person I blame for everything that happened to me at that time.”

Alu says that Kusnick had a major impact on her life, ironically in positive fashion. The fight with Kusnick and All-Service prompted Alu to contact the FBI, which in turn recruited her to help in the agency’s anti-corruption efforts.

“In a way Kusnick is the one who made me what I am today,” she says. “I had a choice either to be afraid or to fight back and I decided to fight back.”

Kusnick, however, has chosen not to fight back against the feds, likely a wise move. With the fraud charge, it seems he’s finally paying for his deceit — and the price may extend beyond his legal problems. The mention of his family in the official Kusnick statement is telling. I’ve always found it interesting how some financial predators maintain a seemingly loving and devoted family life. In Kusnick’s case he’d started a sports agency called Double Diamond Sports Management with his son that has signed several legitimate baseball players. Last year, Kusnick sued a top prospect, Kellin Deglan, the 22nd pick in the 2010 draft, claiming Deglan failed to pay a $50,000 commission to Double Diamond when he signed with the Texas Ranger for $1 million.

The status of that suit today isn’t known, but you can imagine that Deglan might be one of the many people breathing a sigh of relief at the news of Kusnick’s impending criminal conviction. That Kusnick has had 18 months to continue to practice law since Rothstein’s implosion provides yet more evidence that the Florida Bar — where Kusnick, like Rothstein, has served as an official — is a sad and hopeless institution.

The fallout of this case may even extend to Kusnick’s physical health. A source told me Kusnick suffered a heart attack last week, just as news about his impending arrest began to percolate in the media. I asked attorney Coffey about it. “I can’t comment on that,” said Coffey, who represented the Rothstein Rosenfeldt Adler firm after the Ponzi implosion. “I’m not authorized to do so by the family.”

When asked if Kusnick was in the hospital, Coffey said simply, “He’s going to be okay.”

And justice will finally be served.

“He should have been arrested a long time ago because he’s an evil person that will do anything to anyone to make money,” Alu says. “Kusnick and Rothstein deserve each other.”

How The Computer Guys Helped Rothstein Pull Off The Ponzi

27 May

William Corte, pictured at left with attorney Alvin Entin, was a just tech guy at a law firm.

With the punch of some computer keys, he became a small but crucial part of one of the largest frauds ever committed in South Florida.

Corte, 38, was a computer expert at the Rothstein Rosenfeldt Adler law firm, working for head IT guy Curtis Renie. In early 2009, Scott Rothstein came to Corte and Renie, also 38, and asked them to complete an unusual task: Make an exact copy of the official TD Bank site. For their work Rothstein offered each man a bonus of $5,000, according to court documents.

Both Corte and Renie, who are being charged with conspiracy to commit wire fraud, said yes to the unusual — and obviously shady — job.

“He knew something was wrong,” Entin told me. “But he didn’t know the purpose of it. … They were told if they wouldn’t do it, he would get someone from outside [the RRA firm] to do it.”

But it wasn’t just creating the fake website that Rothstein wanted Renie and Corte to do — he also asked them to create fake individual trust accounts.

But there were, of course, glitches. The real TD site had a stock ticker, but it didn’t work on the fake site. The address bar in the web browser had a Rothstein-related file name, and the accounts? Well they didn’t work when the preordained password was typed in, the feds say.

So Rothstein had the pair fix the site. Corte adjusted the site so that any password punched in would give someone access to the accounts. Renie manually updated the stock ticker to make it appear that it was live. And Corte simply eliminated the problematic address bar.

Up until the Ponzi scheme imploded in October 2009, the pair would modify the trust accounts to show whatever figures Rothstein demanded. They even included incoming and outgoing wire transfers — all of them of course fabricated.

And towards the end, they modified the fake bank website to indicate that Rothstein held between $300 million and $1.1 billion in the account. That bit of fraud helped Rothstein raise another $35 million for the scheme, the feds allege.

When Rothstein fled the country, Renie and Corte tried to hide their tracks, according to court documents. Renie deleted the fake webpage from the RRA server and deleted all emails he had regarding the site. Both Renie and Corte also uninstalled the Dreamweaver computer program they used to help create the site.

But as they should have known, there were electronic footprints left behind — and enough evidence to force them to come to the federal table and cooperate.

Feds: Club Man Caputi Posed As Rothstein Banker, Plaintiff In Ponzi Scheme

27 May

The U.S. Attorney’s Office has issued a press release providing some details of the case against four former associates of Scott Rothstein — and they help explain how how the disbarred lawyer was able to pull off his billion-dollar Ponzi scheme.

He did it with a little help from his friend — and employees.

The most explosive revelation: Former Cafe Iguana owner Stephen Caputi, 53, assisted Rothstein in his Ponzi scheme by posing as both a banker and a plaintiff in Rothstein’s structured settlement scam to help dupe investors into believing the scam was legitimate. From the release:

Caputi the chameleon

The Information against Stephen Caputi alleges that Caputi at times acted as both a purported banker and plaintiff during meetings with potential investors. For example, the Information alleges that Caputi, posing as an official from TD Bank, provided investors with fraudulent bank statements that reflected purported balances of trust accounts at TD Bank. In this way, Caputi lulled the investors into believing that the account balances were sufficient to fund their investments. On another occasion, Caputi posed as a plaintiff during a meeting with potential investors who had requested to meet with plaintiffs. Caputi pretended to be a plaintiff who had purportedly executed a $10,000,000 settlement agreement, thus raising potential investors’ confidence in the deal.

Ted Morse, left, Rothstein and Dan Marino before the implosion

Now get this: Caputi and Rothstein met with investors at a TD Ameritrade branch in Weston. Apparently bank officials allowed Rothstein to use a conference room inside the bank. There’s no indication that those officials knew Caputi was posing as one their own, but the setting must have done wonders for Caputi’s credibility.

was a partner with Caputi in the Cafe Iguana nightclub, which was seized by the feds and is now on the sales block (minimum bid: $1.4 million). Caputi also traveled to Morocco to meet with Rothstein after the Ponzi schemer fled the country in October 2009. Rothstein wired $1 million in Caputi’s name to a Moroccan bank as well. Caputi, along with fellow arrestee William Corte, are now free on bond of $100,000 apiece.

Former Rothstein law partner Howard Kusnick, who is expected to surrender next week, is alleged to have duped two RRA clients by claiming they had won a settlement in their case when in fact there was no settlement and their money had already been used to pay off previous investors in the Ponzi scheme. While the press release doesn’t mention the clients’ names, the charges are believed to related to prominent car dealer Ed Morse, who was allegedly duped out of $57 million of dollars by Rothstein in an elaborate lawsuit scam. At the time, Rothstein was supposedly best friends with Ed Morse’s son, Ted Morse.

To read more about 58-year-old Kusnick’s involvement with Rothstein, click here.

And finally we have the two IT guys at RRA, Curtis Renie and William Corte, who are alleged to have helped Rothstein pull off the billion-dollar Ponzi by fabricating a TD Ameritrade website Rothstein showed to investors to dupe them into believing the money was in the bank. How much money?

1.1 billion dollars.

“On one occasion, the defendants modified the phony TD Bank web site to reflect that RRA held between $300 million and $1.1 billion on deposit at TD Bank,” prosecutors wrote in the press release. “In fact, however, no such funds were in the accounts. The false account balances were shown to investors to induce them to invest into the fraudulent investment scheme.”

Both Caputi and Corte surrendered to marshals this morning and are expected to have their first appearance in court at 11 a.m. Kusnick and Renie are sheduled to surrender next week. All four are cooperating with federal authorities and are expected to plead guilty to conspiracy to commit wire fraud charges. This is expected to be just the first wave of arrests after the sentencing of Rothstein, who was hit with 50 years in prison, and his right-hand woman Debra Villegas, who was sentenced to ten years in prison for her involvement.

“The FBI will continue to unravel the remaining web of fraudulent schemes created by Scott Rothstein.  One thing is clear, Rothstein was able to deceive investors because of the participation by others,” Miami FBI chief John V. Gillies said in the press release. “We will shine a light on every aspect of this fraud.  Like Rothstein, those who chose greed over integrity will also have a price to pay.”

More coming.

Breaking: Rothstein Associates Surrender To Feds

27 May

Two former associates of Ponzi schemer Scott Rothstein are being charged with fraud in federal court today, while two others are set to be charged next week.

The first to turn himself in at the federal courthouse this morning was Rothstein friend and cohort Stephen Caputi, the owner of the now defunct Cafe Igauna nightclub in Pembroke Pines. Caputi, accompanied by his lawyer, Hy Shapiro of Miami, was calm and collected as he prepared to turn himself in to federal marshals just after 8 a.m.

“Hope you got my good side,” he said with a smile as a guard shot his security photo near the door.

Next came former Rothstein Rosenfedlt Adler law firm internet technology employee William Corte, who has admitted to fabricating a TD Ameritrade website for Rothstein that the former lawyer used to dupe investors, according to Corte’s attorney, Alvin Entin. Corte walked into the courthouse silently and didn’t respond to any of my questions. Entin then emerged from the courthouse and explained his client’s case.

UPDATED: Being charged next week will be Curtis Renie, who was Corte’s boss and headed RRA’s IT department, said Entin. And the fourth man expected to be charged next week as well is former Rothstein law partner Howard Kusnick, according to Entin. Kusnick is a long-time associate of Rothstein who acknowledged in court last year that he expected to be indicted by the feds.

All four will plead guilty and are cooperating with prosecutors and the FBI in the Rothstein investigation, which is continuing and is expected to involve many more arrests. Check for footage and additional coverage on Local 10 — reporter Roger Lohse remains at the courthouse and will have a complete and exclusive report on the TV side.

More coming.

Rothstein Partner Lands On Feet With Garbage Company

26 May

While talk of coming arrests today haunt many former law partners of Ponzi schemer Scott Rothstein, at least one of them has landed a big job.

Smith

Grant Smith, who was named assistant managing partner of the doomed Rothstein Rosenfeldt Adler firm just 27 days before it imploded, is now general counsel and chief administrative officer of Choice Environmental Services, a garbage company headquartered in Fort Lauderdale.

On Monday Smith, the son of former Congressman Larry Smith, made his return to government activity with a visit to Broward County Commissioner Stacy Ritter’s office to lobby her on an agenda item at this week’s meeting regarding waste disposal in the county.

His bio on the Choice website does not mention his years with RRA. Smith, who was Rothstein’s chief lobbyist, has never been tied to any wrongdoing connected to the firm. He also cooperated with RRA bankruptcy trustees longer than any other of the defunct firm’s employees.

— With Broward Health, the more that things change, the more things seem to stay the same. The Sentinel’s is reporting that the federal government has subpoenaed records from the tax-assisted public health system regarding 27 physician contracts, including those of prominent — and controversial — heart doctor Michael Chizner. The newspaper reports that the agents affiliated with the inspector general of the Department of Health and Human Services are looking for violations of federal kick-back laws. The district has been dogged by allegations of cronyism and waste for years. It was the subject of a longstanding federal investigation last decade that led to a prison sentence of former CFO Patricia Mahaney on an embezzlement conviction. After numerous investigative newspaper reports, former Gov. Jeb Bush axed top management at the taxing district and removed all but one of the seven members of its board.

— Well that Heat comeback was one of the best you’ll ever see. People are talking about the Chicago meltdown, but that was an otherworldly burst of points by two players at the end of the game. Wade, who honestly had been playing the worst basketball I’ve ever seen him play, keyed it wand LeBron did what he’s been doing all playoffs — he finished. The two best teams in the NBA are going to the finals, with Game 1 coming Tuesday in Miami. Barkley’s already picked the Mavs (surprise). I got the Heat in six.